Zaghloul, R S (2005) Risk allocation in contracts: How to improve the process. PhD thesis, University of Calgary, Canada.
Abstract
Recent research and industry experts have indicated that inappropriate risk allocation through disclaimer clauses in contracts is a significant reason for increasing the total cost of a project. Most literature and studies on this topic suggest solutions for the symptoms to the problem but they do not address the root cause. Furthermore, most of these studies are in industries other than construction. However, those in construction do not go beyond single case studies or formulas and advice, which are based on having been more successful in practice, rather than a careful empirical research. The objectives of this research were to test the current practice of risk allocation in the construction industry, uncover the rationale behind inappropriate risk allocation through the use of disclaimer clauses, and identify methods by which to overcome this rationale and improve the whole process. Thus, this research was based on a quantitative-qualitative triangulation methodology approach, consisting of three phases in parallel with the literature review. Phase one of this research was a quantitative section based on a mail-out survey across Canada. Phase two was a qualitative section based on a Modified Delphi questionnaire with a panel of experts. Phase three was a qualitative Modified Grounded Theory interviews based on the results that were analysed from the previous phases. The results of this research identified that using disclaimer clauses to allocate risks is a common industry practice, validated the amount of premiums attached to the five most common disclaimer clauses in construction contracts, uncovered the rationale of using disclaimer clauses to allocate risks and recognized the relationship between trust and better risk allocation process in construction contracts. Additionally, this research presented a unique view which is based on empirical research that proposes a risk allocation framework based on trust relationships between the contracting parties to improve general business environment and reduce the total project costs in the Canadian construction industry.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Uncontrolled Keywords: | trust; grounded theory; Canada; case study; project cost; interview |
| Index terms: | case study, grounded theory, contracting party, Canada, risk allocation, construction contract, construction industry, interview, literature review, project cost, survey, methodology, questionnaire, disclaimer, triangulation |
| Subjects: | economics, research methods, theoretical framing, financial risk, contractual condition, Geography, industry analysis, research design and methodology, contract type, data collection methods, practitioner, data analysis and analytics |
| Topics: | Contract Administration, Cost Management, Research Practice, Roles and Professions, Geographical Context, Procurement |
| Descriptive scope: | 5 PCTEA |
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