INADEQUACY OF CURRENT CONTRACTUAL FORMULA IN RESOLVING DISPUTES OVER VALUATION OF VARIATION

Abstract

Variations are an inevitable aspect of a construction project but they can also be detrimental to the progress of the project. They can impact the time, cost and completion of the construction project. Therefore, variations need to be properly managed and administered through construction contracts. There are several aspect of variation disputes. This study looks into the most prevalent variation dispute which is the dispute over the valuation of variation. Considering how the cash flow is the lifeblood of every construction project, the valuation of variations if not properly carried out, can be damaging to the outcome of the project. If it is not handled efficiently, it can lead to inaccurate cost reconciliation or bad prediction of project profit. The study evaluates the adequacy of the existing contractual formulae in assisting to resolve the conflict of valuation through the use of case law. Case law is used to provide insights on how the Court proposed solutions to resolve the conflict between the parties over the valuation process.