SUCCESS RATE AND IMPLICATIONS OF CONTRACTUAL CLAIMS DECISIONS ON CONTRACTORS IN SOUTH AFRICA

Abstract

Contractual claims are essential issues and normally disputed because they cause losses if the contractual claims fail to be honoured. The completion of projects can be best without any arising contractual claims by the contractors. However, this appears to be too ideal and almost impossible. Contractual claims have connotations of time and monies, which are to be honoured by the client to the contractor as a payment or compensation for the incurred cost. This article established the success rate or extent to which contractual claims were honoured and the implications of the client’s decisions on contractual claims that were not honoured. The questionnaire was distributed to professionals involved in the administration of contractual claims in projects. Descriptive analysis was used to analyse data. Findings revealed that most contractual claims were honoured in full when they were small in numbers, and when contractual claims increase, the success rate also decreased. The findings further indicated that most projects ended in cost and time overruns due to clients’ decisions on contractual claims. It is expected that the findings of this research will help construction stakeholders to avoid the main causes of contractual claims, and thus increasing the chances of contractual claims being honoured and improving the overall performance of construction projects concerning minimized delays and cost overruns.