Abstract
In the construction industry, effective contractual risk management is critical to the success and resilience of projects in avoiding the soaring construction disputes. However, construction contract risks are inevitable for the contracting parties due to the complexity of the Standard Forms of Contract (SFoC). This study investigates and compares risk management approaches across three widely used construction contracts: NEC4, JCT Design and Build 2016, and FIDIC Yellow Book 2017, focusing on contractor-specific risks. Through a comprehensive analysis of contract clauses, industry practices, and existing literature, this paper identifies key commonalities and differences in how these contracts handle various risk categories including financial, schedule, compliance, and legal risks.
The findings reveal NEC contracts emphasize collaborative and flexible risk-sharing through early warning systems, while JCT contracts adopt a more rigid, structured approach that prioritizes clear, predefined processes. FIDIC contracts, on the other hand, strike a balance by providing structured yet adaptable frameworks for managing unforeseen risks. By synthesizing these insights, the study proposes a unified risk management approach that combines the strengths of each contract type, with a view to improve risk mitigation and project outcomes for contractors. This unified risk approach may serve as a guide for construction professionals seeking to adopt more resilient and effective risk management practices in diverse project environments.
The findings reveal NEC contracts emphasize collaborative and flexible risk-sharing through early warning systems, while JCT contracts adopt a more rigid, structured approach that prioritizes clear, predefined processes. FIDIC contracts, on the other hand, strike a balance by providing structured yet adaptable frameworks for managing unforeseen risks. By synthesizing these insights, the study proposes a unified risk management approach that combines the strengths of each contract type, with a view to improve risk mitigation and project outcomes for contractors. This unified risk approach may serve as a guide for construction professionals seeking to adopt more resilient and effective risk management practices in diverse project environments.
| Original language | English |
|---|---|
| Publication status | Published - 23 May 2025 |
| Event | CIB World Building Congress 2025 - Purdue University, West Lafayette , United States Duration: 19 May 2025 → 23 May 2025 https://wbc2025.cibworld.org/ |
Conference
| Conference | CIB World Building Congress 2025 |
|---|---|
| Abbreviated title | WBC2025 |
| Country/Territory | United States |
| City | West Lafayette |
| Period | 19/05/25 → 23/05/25 |
| Other | The CIB World Building Congress is held every three years, with the purpose for building and construction experts across the world, both in and outside the CIB community, to come together to discuss, learn and exchange their expertise in the built environment. In 2025 Purdue University will host the 23rd CIB World Building Congress 2025 at its campus in West Lafayette, Indiana, USA, from 19-23 May 2025. The theme of the conference is Sustainable built environment – the role of the construction community in meeting the UN SDGs. We look forward to welcoming all CIB members, industry representatives, early career researchers and student chapters, and other delegates to THE event in the global construction calendar. |
| Internet address |
Keywords
- Construction Contracts
- Contractor Risk
- Unified Risk Framework
