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?

Explicit project timelines Signup and view all the answers

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

Extra work claims Signup and view all the answers

What is a built environment claim?

A request for compensation for damages due to contractual obligations Signup and view all the answers

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

Insufficient communication among parties Signup and view all the answers

How can early settlement of claims benefit project relationships?

It reduces strained relationships and financial repercussions Signup and view all the answers

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

It may result in legal action or a change order Signup and view all the answers

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

To identify sources and causes of claims Signup and view all the answers

What is a key aspect of the claim impact criteria?

Scope of work changes Signup and view all the answers

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

Once tender documents are finalized and the contract is awarded Signup and view all the answers

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

Guaranteed project delay Signup and view all the answers

What is a Claim in the context of a contract?

A request for damages due to another party's failure to fulfill obligations. Signup and view all the answers

What is the primary purpose of a Change Order?

To document approved changes in contract items. Signup and view all the answers

What are common causes of claims in contract management?

Delays, unforeseen circumstances, and insufficient information. Signup and view all the answers

How are most claims typically settled?

By negotiation or dispute resolution. Signup and view all the answers

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

To help introduce consistency and fairness in reviewing claims. Signup and view all the answers

What factor does NOT contribute to the causes of claims?

Changes in project budget. Signup and view all the answers

What is NOT a characteristic used to classify claims?

Timeframe of project completion. Signup and view all the answers

Which statement best describes the term 'Change Order'?

A documented agreement on changes in contract specifications. Signup and view all the answers

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

Evaluating and assessing proposed changes Signup and view all the answers

Which statement accurately describes change orders in relation to claims?

Some contracts impose stricter deadlines on change orders than on claims. Signup and view all the answers

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

Impact on project stakeholders Signup and view all the answers

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

Claim substitution Signup and view all the answers

How do time deadlines typically apply to change orders?

They are not normally subjected to the same deadlines as claims. Signup and view all the answers

What is characteristic of time-barred clauses?

They can limit the time frame to file a claim. Signup and view all the answers

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

Their evaluation may vary depending on contract provisions. Signup and view all the answers

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

A mutual agreement to add or subtract work from a contract. Signup and view all the answers

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

Differences in material pricing Signup and view all the answers

What circumstance typically causes acceleration claims to arise?

Owner-directed acceleration Signup and view all the answers

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

The contractor Signup and view all the answers

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

Difference in pricing Signup and view all the answers

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

The party responsible for the slowdown Signup and view all the answers

What common issue can lead to damage claims during construction?

Fault of the owner or safety issues Signup and view all the answers

What typically happens during acceleration claims?

The project must be completed within an agreed time frame Signup and view all the answers

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

Owner's project financing Signup and view all the answers

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

Contractual claim Signup and view all the answers

What is characteristic of an extra-contractual claim?

Arises from moral grounds Signup and view all the answers

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

A claim filed for moral reasons Signup and view all the answers

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

Breach of time frame claim Signup and view all the answers

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

There must be evidence showing fault Signup and view all the answers

Which scenario best represents a contractual claim?

A property owner claims damages for late work completion as per contract terms Signup and view all the answers

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

Proven fault by the contracted entity Signup and view all the answers

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

They have a legal foundation in contract law Signup and view all the answers

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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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.