Construction contract Essay Example | Topics and Well Written Essays - 500 words

Construction contract - Essay Example 3 contract gives special emphasis to creating a spirit of mutual trust and cooperation between the parties of the contract and this has been added as the first clause of all NEC3 contracts, giving it a legal value. Another major difference between NEC3 and other forms of contract is the ability of NEC3 to warn the parties of contract about possible risks like increase in cost, delay in completion etc making possible the assessments of risks and timely mitigation through mutual consultation. Under the clause 61.3 the contractor is bound to notify the project manager about any compensation event within 8 weeks otherwise the burden of compensation will lie on the contractor, this clause is partly in conflict with prevention principle and can create legal complexities. NEC3 contract ensures risk management during the very beginning of contract through distribution of responsibilities and creating a ‘legally bound’ mutual trust. By creating an atmosphere of trust and cooperation and through proper documentation NEC3 contract removes the communication deficit between parties of the contract which is a very common reason behind the failure of various projects. The JCT05 or the FIDIC cont ract are more detailed as compared to NEC3 however the simplicity offered by NEC3 is the key to better understanding and grasp by all parties of contract and thus ensuring a collaborative, efficient and good management of the