The process of dealing with contractual risk falls into three stages which are identifying, analysing and responding the risk. Project managers should evaluate and lead their team members in every stages to minimize the risks that will be facing by his/her companies and project in the future.
In a first stage, project managers should identifying the risks that will face by his/her company (project) in future, by preparing a risk checklist. This checklist will promoting a discussion with a project team members about those risk that may be important on a project. Identification of risk must be associated to a clear statement of the client’s priorities for a project. For example, if the timing of the project is critical, the severity of time-related …show more content…
According to Bertinelli (1985), it must be understood and appreciated that any attempt to burden the other party with risks which are inevitable and unpredictable is not a solution … contractors should therefore avoid participating in tenders where conditions impose too many unpredictable or excessively unbalanced risks, or undefined responsibilities. The transfer of risk is accomplished through appropriate wording in the clauses of a contract. It is absolutely fundamental to any study of building contracts to understand that contractual clauses are proposed to transfer risks. To appreciate the extent to which they do this, it is necessary a project manager to understand what the legal situation would be with and without the relevant …show more content…
JCT 98 clause 25 (IFC 98: 2) states that the contractor to be entitled to an extension of time in the event of exceptionally adverse weather. However, clause 26 (IFC 98: 4) does not offer the contractor any entitlement to financial compensation in this event. The overall result, therefore, showing that this particular risk is shared by the employer and the contractor. Differently stated in GC/Works/1, clause 36(2)(e) which specifically excludes an extension of time for bad weather. Under this form of contract, therefore, the effects of the weather are totally at the risk of the contractor, although the guidance notes point out that the employer’s basic contract period should be considered with an allowance for weather conditions (Property Advisors to the Civil Estate 1998b:
In a first stage, project managers should identifying the risks that will face by his/her company (project) in future, by preparing a risk checklist. This checklist will promoting a discussion with a project team members about those risk that may be important on a project. Identification of risk must be associated to a clear statement of the client’s priorities for a project. For example, if the timing of the project is critical, the severity of time-related …show more content…
According to Bertinelli (1985), it must be understood and appreciated that any attempt to burden the other party with risks which are inevitable and unpredictable is not a solution … contractors should therefore avoid participating in tenders where conditions impose too many unpredictable or excessively unbalanced risks, or undefined responsibilities. The transfer of risk is accomplished through appropriate wording in the clauses of a contract. It is absolutely fundamental to any study of building contracts to understand that contractual clauses are proposed to transfer risks. To appreciate the extent to which they do this, it is necessary a project manager to understand what the legal situation would be with and without the relevant …show more content…
JCT 98 clause 25 (IFC 98: 2) states that the contractor to be entitled to an extension of time in the event of exceptionally adverse weather. However, clause 26 (IFC 98: 4) does not offer the contractor any entitlement to financial compensation in this event. The overall result, therefore, showing that this particular risk is shared by the employer and the contractor. Differently stated in GC/Works/1, clause 36(2)(e) which specifically excludes an extension of time for bad weather. Under this form of contract, therefore, the effects of the weather are totally at the risk of the contractor, although the guidance notes point out that the employer’s basic contract period should be considered with an allowance for weather conditions (Property Advisors to the Civil Estate 1998b: