Construction Project Management and Legal Issues
Expert-defined terms from the Graduate Certificate in Construction Law and Dispute Resolution course at London School of Business and Administration. Free to read, free to share, paired with a globally recognised certification pathway.
**Adversarialism** #
An approach to dispute resolution where parties involved take entrenched positions and fight for their rights using litigation or arbitration. This approach is often costly, time-consuming, and can damage relationships.
**Alternative Dispute Resolution (ADR)** #
Methods used to resolve disputes outside of litigation or arbitration, such as mediation, negotiation, or collaborative law. ADR is generally less expensive, quicker, and less adversarial than traditional dispute resolution methods.
**Arbitration** #
A process where a neutral third party, called an arbitrator, hears evidence and makes a binding decision in a dispute. Arbitration is often faster and less formal than litigation, but can still be costly.
**Back #
to-back contract**: A contract where the completion of one contract is linked to the start of another, creating a continuous chain of contracts. This type of contract can be useful in construction projects, but can also create risks if one contract is delayed or terminated.
**Bond** #
A financial guarantee that ensures a contractor will complete a construction project according to the contract terms. If the contractor fails to do so, the bond guarantees that the project owner will be compensated.
**Building Information Modeling (BIM)** #
A digital tool used in construction project management that creates a 3D model of a building, allowing for better visualization, coordination, and collaboration among stakeholders.
**Claim** #
A demand for payment or compensation made by a party in a construction project. Claims can arise from various issues, such as delays, changes in scope, or defective work.
**Commissioning** #
The process of ensuring that a building or facility is designed, constructed, and operated in accordance with the owner's requirements. Commissioning can help identify and resolve issues before they become major problems.
**Construction Manager at Risk (CMR)** #
A project delivery method where the construction manager is responsible for both the design and construction phases of a project, and is paid a fixed fee. The CMR method can help control costs and ensure quality.
**Contingency plan** #
A plan that outlines how to respond to unexpected events or circumstances that may arise during a construction project. Contingency plans can help minimize delays and costs.
**Contract** #
A legally binding agreement between two or more parties that outlines the terms and conditions of a construction project.
**Design #
bid-build**: A traditional project delivery method where the design and construction phases are separate, and the project owner contracts with a designer and a contractor separately.
**Design #
build**: A project delivery method where the designer and contractor are part of the same entity, allowing for better coordination and collaboration.
**Dispute Resolution Board (DRB)** #
A panel of neutral experts who provide binding decisions on disputes that arise during a construction project. DRBs can help resolve disputes quickly and cost-effectively.
**Earned Value Analysis (EVA)** #
A project management technique used to measure project performance by comparing the value of work completed to the planned value of work.
**Force Majeure** #
An unforeseeable event or circumstance that prevents a party from fulfilling its contractual obligations, such as a natural disaster or war.
**Golden Triangle of Construction** #
The three main factors that influence construction projects: cost, time, and quality. Balancing these factors is critical to the success of a project.
**Guaranteed Maximum Price (GMP)** #
A type of contract where the contractor guarantees that the project will not exceed a certain price. GMP contracts can help control costs and reduce risk for the project owner.
**Indemnification** #
A provision in a contract where one party agrees to compensate the other party for any losses or damages incurred.
**Integrated Project Delivery (IPD)** #
A project delivery method where all stakeholders, including the owner, designer, and contractor, work together as a team from the beginning of the project. IPD can help improve collaboration, communication, and project outcomes.
**Lien** #
A legal claim against a property for unpaid debts or fees related to a construction project.
**Liquidated Damages** #
A predetermined amount of money that a party agrees to pay in the event of a breach of contract. Liquidated damages can help provide certainty and reduce litigation costs.
**Mediation** #
A process where a neutral third party, called a mediator, facilitates communication and negotiation between parties in a dispute. The mediator does not make decisions, but helps the parties reach a mutually acceptable agreement.
**Negotiation** #
A process where parties in a dispute communicate and bargain with each other to reach a mutually acceptable agreement.
**Notice of Commencement** #
A document filed by the project owner at the beginning of a construction project, notifying all parties of the start of the project.
**Notice of Termination** #
A document filed by the project owner or contractor to terminate a construction contract.
**Payment Bond** #
A bond that guarantees payment to subcontractors, laborers, and material suppliers for work completed on a construction project.
**Performance Bond** #
A bond that guarantees the contractor will complete the construction project according to the contract terms.
**Request for Information (RFI)** #
A formal request for clarification or information about a construction project, typically submitted by the contractor to the project owner or designer.
**Request for Proposal (RFP)** #
A document issued by the project owner to solicit bids from contractors for a construction project.
**Request for Quotation (RFQ)** #
A document issued by the project owner to solicit price quotes from contractors for a construction project.
**Scope of Work** #
A detailed description of the work to be performed on a construction project, including the specific tasks, materials, and standards to be used.
**Standing Start** #
A project delivery method where the project owner selects multiple contractors to bid on a project, and then selects the contractor with the best proposal.
**Subcontract** #
A contract between a contractor and a subcontractor, outlining the terms and conditions of the subcontractor's work on a construction project.
**Subcontractor** #
A company or individual hired by a contractor to perform specific tasks or work on a construction project.
**Surety Bond** #
A bond issued by a surety company that guarantees the performance of a contractor on a construction project.
**Time and Materials Contract** #
A contract where the contractor is paid based on the time and materials used for a construction project.
**Variation** #
A change to the original scope of work on a construction project, typically requiring a change order.
**Warranty** #
A guarantee or promise made by the contractor to the project owner, outlining the terms and conditions of any repairs or replacements needed after the completion of a construction project.
**Work Order** #
A document issued by the project owner to the contractor, outlining specific tasks or work to be performed on a construction project.
**Wrap #
up Insurance Program**: An insurance program that covers all parties involved in a construction project, including the project owner, contractor, and subcontractors. Wrap-up insurance programs can help reduce insurance costs and improve risk management.