Paraphrasing Some Paragraphs
Construction Claim can be defined as a request by either party to the contract, usually the Contractor, for compensation for damages caused by failure of the other party to fulfill his part of obligations as specified in the contract. The compensation is usually in the form of the additional payment or an extension of time (EOT).
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Construction claims are measured by many project participants to be one of the most worrying and unpleasant events of a project. The high competition has forced contractors to submit projects with minimum profits in order to stay in business. This has placed an added burden on contractors to construct increasingly sophisticated and risky projects with less resources and profits. Under these circumstances, it is not shocking that the number of claims within the construction industry continues to increase.
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Construction claims are found in almost every construction project. It is the seeking of consideration or change by one of the parties involved in the construction process. Nowadays, the greatly increasing volume of claims is the result of the rising complexity of the projects and the price structure of the construction industry.
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Minimizing and avoiding construction claims and disputes requires understanding the contractual terms and clauses early on while identifying and understanding the causes of the claims. When one party believes that the other party has not met the contractual obligations or expectations and that they deserve monetary and/or time compensation, they may submit a claim.
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Knowledge of the different construction claim types Table allows owners to recognize potential claims situations. This recognition can protect the owners from incurring losses and assist in recovering compensation. In addition to that, Construction claim affect the interests of many stakeholders in connection with big investments because they are reducing the profits.
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In order to deal with or control the claims effectively, parties should establish good construction claim management processes in their organizations. The major issues in claims and disputes are identification of issues and the party responsible for the claims, and determining the time and cost impact of the claim. The party raising the claim has to notify the claims once they have been identified. Further, it is responsibility of the party raising the claim to verify the facts. Depending on the decision of the other party against which the claim is made, the claim may be settled amicably or it may take the form of dispute.
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