Ryan, E C (1998) Devising contract terms in construction contracts to produce efficient performance. In: Hughes, W (ed.) Proceedings of 14th Annual ARCOM Conference, 9-11 September 1998, Reading, UK.
Abstract
The substance of contract terms has a major influence on the performance by the parties to a construction project. Analysing risk has become an important pursuit in project management and its significance is not questioned since the financial consequence of project uncertainties can be very high. It has been proposed by some sources that a balanced risk allocation in a construction contract will produce improved satisfaction of the parties to construction contracts. This paper reviews this concept and challenges some of the claims made by merely allocating risk. The research involved an examination of the theories of organizational economics and their relevance in devising contract terms with the aim of producing a model which would increase the efficiency of contract performance. Although the attributes produced in new institution economics have been examined previously they have restricted their analysis to organizational governance. The paper gives clear indication that the same attributes can be used in producing a more efficient contract.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | contract terms; information; transaction cost; risk |
| Index terms: | transaction cost, organizational economics, project management, efficiency, project uncertainty, construction project, satisfaction, contract term, risk allocation, construction contract, governance |
| Subjects: | financial risk, economics, business, project delivery, contractual condition, financial analysis, contract type, project management theory and practice, performance management, production management |
| Topics: | Organizational Design, Contract Administration, Governance, Procurement, Project Management, Cost Management, Quality Management |
| Descriptive scope: | 3 PCT |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here