SOME DISPUTES RELATING TO VARIATION

Abstract

Variations within a contract are significantly a main source of dispute arising in the construction industry. Academic contributions have long acknowledged variation as a major problem in contract management. Usually disputed variations have a major impact on payments. In practice, variation and its disputes are often delayed until the end of the contract when the accounts are being finalized. Unresolved disputes delay the settlement of final payments which consequently have adverse effects on the contractual parties. Areas of disputes in variations can result from valuation of variations, the choice of procurement methods, improper documentations and the interests of the respective parties involved. The forms of dispute resolution method for settling the differences are important in order to reach an agreement quickly, effectively and amicably. This research presents the findings of some of the disputes in variations from three public sector projects handled by a Consultant Company, using the PSSCOC 4th edition, 2005. Documents and interviews results for three case studies are analyzed to investigate some of the disputes arising from variations, the ways to resolve them as well as to test the hypothesis: “Delay in resolving a dispute due to variation orders would necessarily escalate the magnitude of a dispute”. The whole study concludes with proposed practical measures and recommendations in a bid to minimize and/or avoid disputes in variations.