COMMON CAUSES OF CLAIMS
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Questions and Answers

What defines extra work claims in a construction context?

  • Routine tasks included in the contract
  • Requests for tasks that were not originally stated in the contract (correct)
  • Changes in project timing due to weather conditions
  • Tasks delegated to subcontractors before the contract signing

What typically leads to contractual claims?

  • Oral agreements made during meetings
  • Detailed and clear contracts
  • Agreed modifications documented between parties
  • Poorly written contracts (correct)

What constitutes a different site condition claim?

  • Normal variations that occur during the construction process
  • Physical aspects that materially differ from contracted documents (correct)
  • Standard project risks identified in the contract
  • Weather-related issues altering construction schedules

Which of the following is NOT a potential cause of contractual claims?

<p>Explicit project timelines (C)</p> Signup and view all the answers

Which of the following claims arises from additional requests after construction has commenced?

<p>Extra work claims (D)</p> Signup and view all the answers

What is a built environment claim?

<p>A request for compensation for damages due to contractual obligations (B)</p> Signup and view all the answers

Which of the following is a common cause of claims in construction contracts?

<p>Insufficient communication among parties (A)</p> Signup and view all the answers

How can early settlement of claims benefit project relationships?

<p>It reduces strained relationships and financial repercussions (D)</p> Signup and view all the answers

What happens when one party fails to fulfill a contractual obligation?

<p>It may result in legal action or a change order (C)</p> Signup and view all the answers

What is the primary aim of distinguishing between claims and change orders?

<p>To identify sources and causes of claims (C)</p> Signup and view all the answers

What is a key aspect of the claim impact criteria?

<p>Scope of work changes (C)</p> Signup and view all the answers

When does the greatest opportunity to prevent claims occur in a construction project?

<p>Once tender documents are finalized and the contract is awarded (D)</p> Signup and view all the answers

Which of the following is NOT a potential consequence of a claim in construction?

<p>Guaranteed project delay (A)</p> Signup and view all the answers

What is a Claim in the context of a contract?

<p>A request for damages due to another party's failure to fulfill obligations. (B)</p> Signup and view all the answers

What is the primary purpose of a Change Order?

<p>To document approved changes in contract items. (D)</p> Signup and view all the answers

What are common causes of claims in contract management?

<p>Delays, unforeseen circumstances, and insufficient information. (D)</p> Signup and view all the answers

How are most claims typically settled?

<p>By negotiation or dispute resolution. (D)</p> Signup and view all the answers

What role might a Claim Review Board (CRB) have in contract disputes?

<p>To help introduce consistency and fairness in reviewing claims. (B)</p> Signup and view all the answers

What factor does NOT contribute to the causes of claims?

<p>Changes in project budget. (D)</p> Signup and view all the answers

What is NOT a characteristic used to classify claims?

<p>Timeframe of project completion. (B)</p> Signup and view all the answers

Which statement best describes the term 'Change Order'?

<p>A documented agreement on changes in contract specifications. (C)</p> Signup and view all the answers

What is the primary function of the Change Control Board (CCB)?

<p>Evaluating and assessing proposed changes (B)</p> Signup and view all the answers

Which statement accurately describes change orders in relation to claims?

<p>Some contracts impose stricter deadlines on change orders than on claims. (D)</p> Signup and view all the answers

What might be one of the claim impact criteria relevant to the Avo scenario?

<p>Impact on project stakeholders (C)</p> Signup and view all the answers

Which of the following is NOT a characteristic of change orders?

<p>Claim substitution (D)</p> Signup and view all the answers

How do time deadlines typically apply to change orders?

<p>They are not normally subjected to the same deadlines as claims. (D)</p> Signup and view all the answers

What is characteristic of time-barred clauses?

<p>They can limit the time frame to file a claim. (C)</p> Signup and view all the answers

When it comes to change orders, which statement is true?

<p>Their evaluation may vary depending on contract provisions. (C)</p> Signup and view all the answers

Which of the following best describes a built environment change order?

<p>A mutual agreement to add or subtract work from a contract. (A)</p> Signup and view all the answers

What leads to differences in pricing at the final stage of construction?

<p>Differences in material pricing (A)</p> Signup and view all the answers

What circumstance typically causes acceleration claims to arise?

<p>Owner-directed acceleration (B)</p> Signup and view all the answers

In cases of damage claims, who is generally held responsible for the site?

<p>The contractor (C)</p> Signup and view all the answers

What is a possible outcome when added work occurs during construction?

<p>Difference in pricing (C)</p> Signup and view all the answers

Who is obligated to compensate for additional costs due to delays?

<p>The party responsible for the slowdown (C)</p> Signup and view all the answers

What common issue can lead to damage claims during construction?

<p>Fault of the owner or safety issues (A)</p> Signup and view all the answers

What typically happens during acceleration claims?

<p>The project must be completed within an agreed time frame (D)</p> Signup and view all the answers

Which of the following is NOT typically involved in measuring claims differences?

<p>Owner's project financing (A)</p> Signup and view all the answers

Which claim category is defined as claims arising from breaches specified in the contract?

<p>Contractual claim (C)</p> Signup and view all the answers

What is characteristic of an extra-contractual claim?

<p>Arises from moral grounds (B)</p> Signup and view all the answers

In the context of claims, what does the term 'ex gratia claim' imply?

<p>A claim filed for moral reasons (C)</p> Signup and view all the answers

Which claim category would involve delays caused by the contracted entity in completing their work?

<p>Breach of time frame claim (A)</p> Signup and view all the answers

What is a defining factor in proving a breach of time frame claim?

<p>There must be evidence showing fault (B)</p> Signup and view all the answers

Which scenario best represents a contractual claim?

<p>A property owner claims damages for late work completion as per contract terms (A)</p> Signup and view all the answers

What allows an owner to recover damages from delays according to the claim categories?

<p>Proven fault by the contracted entity (C)</p> Signup and view all the answers

Which of the following is NOT true about ex gratia claims?

<p>They have a legal foundation in contract law (A)</p> Signup and view all the answers

Flashcards

What is a claim?

A formal request for additional compensation, often due to unforeseen circumstances or changes in the project.

What is a change order?

An official document that changes the original contract terms, often adding work or time, and impacts all parties involved.

What are sources of claims?

Claims can arise from various sources, including design errors, unforeseen site conditions, delays due to weather, and more.

What impact do claims have?

A claim typically impacts the project's scope by requiring additional work, increases the time needed for completion, and can lead to financial losses for one or both parties.

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When is the best time to prevent claims?

Preventing claims starts before the contract is finalized. This includes careful planning, clear communication, and thorough risk assessments.

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What are the risks of unresolved claims?

A claim can lead to disputes and legal action if not resolved properly, causing strained relationships between parties involved.

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Why is early claim settlement beneficial?

Resolving claims promptly can reduce tensions and financial repercussions, promoting a healthier project environment.

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What situations trigger claims?

Claims are often triggered by events that disrupt the planned project execution, such as changes in regulations, unexpected delays, or unforeseen site conditions.

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Claim Impact Criteria

Criteria used to determine the validity of a claim, often involving factors like the nature of the claim, the impact on the project, and the evidence presented.

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Time-barred Clauses

This type of clause in a contract specifies a deadline for submitting a claim.

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Built Environment Change Order

The agreement between two parties to modify the project scope by adding, subtracting, or changing the sequence of work.

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Change Order Deadlines

Change orders are typically not subject to the same strict deadlines as claims, as they are less complex.

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Change Control Board (CCB)

A formal process within project management where a group or team evaluates and decides whether to approve or reject proposed changes.

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Claims

Formal requests made to amend a contract due to unforeseen circumstances.

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Change Orders

Formal changes made to the project scope, which may involve modifications to the contract.

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Change Order vs. Claim

Change orders and claims are distinct processes.

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Change Review Board (CRB)

A group responsible for reviewing and approving proposed changes to a project contract.

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Causes of Claims

Delays or changes in the project plan, unforeseen circumstances, insufficient information, and conflicts between parties can all trigger claims.

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Claim Resolution

Claims are often resolved through negotiation between the parties involved, but formal dispute resolution processes can be used if necessary.

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Classifying Claims

Claims can be categorized based on the parties involved, the nature of the rights being claimed, the legal basis for the claim, and the specific characteristics of the claim.

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Claims Cause Research

A method for addressing claims by analyzing factors contributing to the claim. Common methods include surveys, interviews, and data analysis.

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Extra Work Claims

Additional work not defined in the original contract. This can be tasks the owner requests after the project has started.

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Contractual Claims

Disagreements regarding responsibility or liability not clearly outlined in the contract. Often arises from poorly written contract terms.

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Different Site Conditions Claims

When the site differs significantly from what was detailed in the contract or is unusual for that type of project.

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How to prevent Claims?

Preventing claims starts before the contract is signed. Thorough planning and clear communication are key steps.

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Extra-contractual Claims

Claims not explicitly mentioned in the contract but arise from breaches, which can be either stated or implied.

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Ex Gratia Claims

Claims with no legal basis in the contract but are filed on moral grounds. The party making the claim believes they have a right to compensation.

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Extension of Time Claim

A type of claim where the owner seeks compensation for delays caused by the contracted entity in completing their work.

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Breach of Time Frame

A situation where the contracted entity fails to deliver work within the contractually specified time frame, leading to potential owner claims.

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Claim Categories

Claims fall into three categories: contractual, extra-contractual, and ex gratia. Each category has its own legal foundation.

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What are claims?

Claims are formal requests for additional compensation often due to unforeseen circumstances or changes in the projct.

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Price and Measurement Difference Claim

This type of claim emerges from disagreements about the final project cost, especially due to variations in material pricing between the contractor and the owner.

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Added Work Claim

An added work claim arises because the project scope grows, leading to unexpected costs.

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Acceleration Claim

This claim occurs when the owner demands the project finish faster, forcing the contractor to incur extra expenses.

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What triggers an acceleration claim?

Acceleration claims are triggered by the owner's request for a faster project completion, even if there were delays.

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Damage Claim

These claims arise from damages that occur during the project, either caused by the owner or safety issues.

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Why are damage claims rare?

Damage claims are uncommon because contractors usually bear responsibility for site safety.

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Who pays for delays?

The party who caused the delay is obligated to compensate for the additional costs incurred due to the delay.

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What are common sources of claims?

Claims can stem from discrepancies in material pricing, added work, acceleration requests, and damages.

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Study Notes

Construction Contract and Risk Management

  • Common Causes of Claims: Claims in construction projects often arise due to delays, changes, unforeseen circumstances, insufficient information, and other work-related conflicts.
  • Objectives: Key objectives of the course include reviewing common claim causes, distinguishing claims and change orders, identifying sources and causes of claims, and recognizing various claim types.
  • Claims in the Built Environment: Effective claim resolution is vital to prevent strained relationships and financial repercussions.
  • Claims vs. Change Orders: Claims are requests for compensation due to contractual obligations not fulfilled, while change orders are agreed adjustments to the project scope.
  • Built Environment Claim Definition: A claim is a formal request for compensation due to a party's failure to meet contractual obligations, potentially leading to legal action or a change order.
  • Claim Impact Criteria: Key impact factors of claims include scope of work changes, increased time and expenses, and added recovery costs.
  • Claim Deadlines: Time deadlines and time-barred clauses are significant elements of claims management.
  • Built Environment Change Order Definition: A change order is mutual agreement between involved parties to alter the project scope (sequence, addition, or subtraction of tasks). It isn't a replacement for a claim.
  • Change Order Deadlines: Change orders typically aren't subject to the same deadlines as claims. Some contracts might have no deadlines, while others have stricter deadlines for change orders versus claims. The Change Control Board (CCB) assesses proposed changes, evaluates their impact, and decides whether to accept or reject them.
  • Summary of Claim vs. Change Order: A claim is a formal request for compensation, while a change order is a mutual agreement to adjust scope.

Claim Review Board

  • Reflect on the Avocet Island Initiative: The discussion explores how a Change Review Board (CRB) might affect the Avocet Island project.

Causes and Sources of Claims

  • Claims Cause Research: Many construction claims are settled through negotiation, dispute resolution processes, and claims research.
  • Causes of Claims: Typical causes include delays, unforeseen circumstances, insufficient information, and other work-related conflicts (disputes).

Classifying Claims

  • Classifying Claims: Claims can be categorized as contractual, extra-contractual, or ex gratia, based on their origin and the parties involved. Other categories include issues relating to rights claimed, legal basis, and claim characteristics.

Claim Categories

  • Claim Categories: Key claim categories covered include contractual claims, extra-contractual claims, ex gratia claims, extension of time claims, and breach of time frame claims.
  • Payment-Related Claims: Common forms of payment-related claims include non-payment, delayed payment, deductions from bills without explanation, and delays in payment security and maintenance deposit.

Change Claims

  • Change Claims: Project changes, revisions involving the scope of work, and additional work can lead to change claims.

Delay Claims

  • Delay Claims: Delays arising from unforeseen circumstances impact project timelines. Proving these delays can be challenging, particularly in large-scale projects.

Extra Work Claims

  • Extra Work Claims: Claims typically happen if a project involves additional work not stated in the initial contract, after construction starts.

Contractual Claims

  • Contractual Claims: Disputes over responsibilities, liabilities not in documents, or poorly written contracts can lead to contractual claims.

Different Site Conditions Claims

  • Different Site Conditions Claims: Unexpected site conditions that differ from the initial contract documentation can lead to site condition claims.

Differences in Pricing and Measuring Claims

  • Pricing and Measuring Claims: Disputes over measurement and pricing discrepancies during the project's final stages occur in pricing and measuring claims.

Acceleration Claims

  • Acceleration Claims: Owner-directed acceleration can create disputes and lead to claims regarding the required speed to complete projects in agreed on time frames.

Damage Claims

  • Damage Claims: Damage claims typically occur if the owner is at fault or safety issues arise. Contractors are usually held accountable for site safety and damages in most situations.

Contract Termination Claims

  • Contract Termination Claims: Claims arise if a contract is terminated early (either by the owner or contractor) before all contractual obligations are fulfilled.

Documentation and Data Analysis

  • Documentation and Data Analysis: Identifying, documenting, and analyzing data, highlighting problem areas, and maintaining records are vital for handling claims effectively.

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Construction Contract And Risk Management PDF

Description

Test your knowledge on construction claims, including extra work claims, different site condition claims, and the implications of change orders. Explore common causes of contractual claims and understand how effective claim management can enhance project relationships.

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