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No. 6 2005

© Publishing House of Poznan University of Technology, PoznaĔ 2005 ISSN 1642-9303

Sigitas MITKUS

Vilnius Gediminas Technical University

GRAPHICAL RISK AND LIABILITY ALLOCATION

MODELS IN CONSTRUCTION CONTRACTS

The allocation of risk and liability between parties as regards the construction contracts is one of the main functions of such contracts. When performing construction works, many risks are incurred. The article deals with the following risks: the risk of construction product defects and the risk of appearance of additional works.

The new Civil Code of the Republic of Lithuania effective since 1 July 2001 contains much stricter regulations concerning the issues of risk allocation and liability. The aim of this article is to analyse how risk is allocated between parties to a construction contract in the case of a fixed price contract depending on the behaviour of the contracting parties and taking account of the CC provisions.

The article suggests analysing the alternatives of risk and liability allocation between contract parties by developing trees of risk and liability allocation. The article presents trees of the risk of construction product defects and the risk of additional works.

Key words: risk allocation, construction contract, graphical models.

1. INTRODUCTION

One of the main purposes of construction contracts is to clearly allocate risk and liability, comprehensibly and unambiguously. Otherwise, arguments, including legal ones, between contract parties are inevitable. And it always leads to additional costs incurred by both parties [8].

The aim of this article is to analyse the allocation of risk and liability between the participants of the construction process (the contractor and the client) when implementing construction projects, to analyse any constraints when allocating risks and liabilities provided for in the Civil Code of the Republic of Lithuania (hereinafter referred to as the CC) [3] and other effective legal

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regulatory acts of the Republic of Lithuania, to what extent the liability and risk allocation depends on the terms and conditions of the construction contract and the behaviour of the parties to the construction contract when implementing the construction project.

Adequate and reasonable allocation of risk and liability in construction contracts makes the construction process more efficient, and a reasonable price is set in calls for construction contract bids. For example, C. Charoenngam and C.-Y. Yeh have found [2] that in East Asian countries if the client sets such contract conditions in public procurement procedures for construction works contracts when the greater part of the risk and liability is transferred to the contractor, the contract value increases dramatically. Significant price increases due to inadequate risk and liability allocation between the client and the contractor were also observed in the USA and Canada [11]. The allocation of risk and liability between the contractor and the client has direct impact on the costs of construction projects [5]. When transferring the risks of performing construction works from the client to the contractor, two scenarios undesirable for the client are possible [10]:

1. seeking to insure themselves from risk consequences, the contractor increases the bid price;

2. the contractor does not increase the bid price and in case of risk materialisation has financial problems.

Both scenarios mentioned are not desirable for the contractor. In the former case they will pay a higher price, and in the latter situation they would have to implement the construction project cooperating with the partner experiencing financial problems, which also threatens the success of the project.

The risk is particularly high when the subject of the construction contract is complex constructions. If the risk is materialised during the construction process, it has great impact on the costs, duration and quality of the construction project. On the other hand, it is impossible to avoid all risks when executing construction contracts. Most often, it can only be distributed between the parties and managed [7]. Risk costs are always assumed by one or both contracting parties.

When implementing construction projects, it is not unusual that disagreements and disputes concerning liability arise. It is possible to eliminate such ambiguities and disputes by setting the terms and conditions of liability allocation between the contracting parties in a construction contract as clearly as possible. S.C. Ward, C.B. Chapman and B. Curtis [10] consider that with a view to proper distribution of risks between the parties to construction contracts, the following two conditions are crucial:

1. trust between the contracting parties;

2. clear mutual understanding of all possible risks and their possible impact. General terms and conditions of a construction contract with regard to the risk and liability allocation is the most important part of the construction contract

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documentation. For example, contract conditions providing for the contractor’s liability for risks that are totally independent of the parties or vice versa constitute a potential source of claims and arguments in many construction projects [5].

The above scholarly works focus on the agreement between the parties to the construction contract (the contractor and the client) on the risk and liability allocation. Those works do not analyse the impact of legal norms regulating construction contracts on the risk and liability allocation.

The costs of construction works are influenced by various factors. Some factors exclusively depend on the contractor implementing the construction project while others are closely related to the sociocultural, economic, technical and political environment of the project location (global risk factors) [1].

The new Civil Code of the Republic of Lithuania effective since 1 July 2001 contains much stricter regulations concerning the issues of risk allocation and liability. The CC norms normally regulate the above issues by applying imperative legal norms. For that reason the aforementioned risk and liability issues are, to a great extent, conditioned by the CC legal norms and the contracting parties cannot change those provisions by mutual agreement. This is why this article focuses mainly on the legal aspects of the risk and liability allocation.

The aim of this article is to analyse how risk is allocated between parties to a construction contract in the case of a fixed price contract depending on the behaviour of the contracting parties and taking account of the CC provisions. It is universally assumed that fixed price contracts are most appropriate when the risk of price increase is low [4]. Although high risk usually exists when implementing construction projects (executing construction contracts), fixed value contracts are still quite common.

The fact of drawing a fixed price construction contract cannot be interpreted in such a manner that the contract value may be changed by no means. When executing construction contracts (including fixed value contracts), there may be such situations when the value of the construction object increases significantly independent of the contractor’s will, and the latter did not and could not foresee such a price increase. Such cases include force-majeure circumstances, modifications to the construction design project, major changes on the markets of construction products and labour force as well as the appearance of unforeseen additional works.

2. ALLOCATION OF RISK AND LIABILITY FOR UNFORESEEN ADDITIONAL WORKS

The main cases of the occurrence of additional unforeseen works when executing construction contracts are as follows:

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1. it becomes clear that more works provided for in the construction contract need to be performed. This could happen both because of the designer’s mistakes and because such an increase in the extent of works could not have been foreseen. For example, the contractor must dig a foundation pit in accordance with the contract. However when digging it, it appeared that the ground suitable for the foundation is deeper than expected and the foundation must therefore be laid deeper, which leads to more ground, concrete and other works;

2. it becomes clear that additional works not provided for in the construction contract need to be performed. For example, when digging the foundation pit, it becomes clear that the ground contains solid rock and in order to remove it demolition works are necessary. In such a case demolition works would be those unforeseen additional works.

The above cases essentially change the balance of contractual obligations of the contracting parties making it more difficult for the contractor to fulfil the contract than for the client). Depriving the contractor of the right to demand to increase the construction contract value in such a case would contradict the principles of honesty, fairness and reason. Cases when the construction contractor is entitled to demand to modify the contract value can be established by performing the analysis of the CC and the possible behaviour of the contracting parties.

The variants of distributing the risk of price increases are given in Fig. 1. The need for additional works must first be identified by the contractor (Fig. 1, 1-2). The case when the contractor does not notice that they are performing some works not provided for in the contract is not likely and one may even say that it is absurd. However, even if such a situation takes place, the client is entitled not to pay for the additionally performed works but the contractor has the right to dismantle the works performed (if it is possible without damaging other works provided for in the contract and accepted by the client).

Paragraph 4 of Art. 6.684 of the CC makes an imperative provision that “the contractor having discovered, in the course of the construction, the work which is not indicated in the technical construction regulations and necessitates fulfilment of additional work and increase the price of the contract concerned, they shall be obliged to inform the client accordingly”. Therefore further situation depends on the contractor’s behaviour. Two alternative behaviours are possible in such a case:

1. the contractor informs the client about unforeseen works (Fig. 1, 2-3).

2. the contractor does not inform the client about unforeseen works (Fig. 1, 2-10). It is the contractor’s duty to inform the client about any unforeseen works identified as provided in paragraph 4 of Art. 6.684 of the CC. If the contractor fails to inform the client of the above circumstances (Fig. 1, 2-10), they are deemed to have breached the imperative legal regulatory norm of the CC and

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lose their right to demand from the client to pay them for such additional works. In such a case the demand to pay for the works not provided for in the contract would also contradict the legal principles of honesty, reason and fairness. However, paragraph 5 of Art. 6.684 of the CC also makes a provision concerning an exception from this rule – the contractor having performed additional works not provided for in the construction contract loses the right to demand “payment from the client for the additional work fulfilled and claim compensation of damages incurred unless they prove that the necessity for immediate actions was in the interests of the client while the suspension of work might have brought about perishing or damaging of the construction object”.

Having regard to the above circumstances, it may be concluded that if the contractor performs any works not provided for in the contract, two ways of distributing risk and liability are possible:

1. the contractor manages to prove that the necessity for immediate actions (the performance of unforeseen construction works) was in the interests of the client while the suspension of work might have brought about perishing or damaging of the construction object (Fig. 1 , 10-11);

2. the contractor fails to provide evidence of the aforementioned circumstances. The obligation to provide evidence in this case is assumed by the contractor. The analysis of the above CC legal norm shows that the contractor would fulfil their obligation to provide evidence if they manage to prove two significant circumstances:

1. the immediate actions were in the interests of the client. It would be logical to consider that the performance of the unforeseen construction works is in the client’s interests in case the risk of the construction object perishing or being damaged is assumed by the client. Paragraph 1 of Art. 6.682 of the CC provides that “the risk of accidental perishing or damage of the object of construction or a part thereof shall be borne by the contractor until its acceptance by the client”. Therefore, the unforeseen additional works performed should be deemed performed in the client’s interests if they are performed with a view to protecting the object accepted by the client or a part thereof from perishing or damage;

2. the suspension of the additional unforeseen works might have brought about perishing or damaging of the construction object. In practice that means that the contractor is to prove that it was an emergency situation. For example, an unexpected flood undermined the foundation of the building under construction and seeking to avoid the fall of the building the foundation was to be reinforced immediately. After this is proved (Fig. 1, 10-11), the entire risk relating to the increase of the construction value is transferred to the client, and they must reimburse the contractor for all the expenses incurred in relation with the additional works.

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If the contractor fails to prove the above circumstances, they bear the entire risk relating to the increase of the construction value and the client is not obliged to reimburse the contractor for the expenses incurred. The following alternatives are possible in such a case:the client does not pay for the performance of unforeseen construction works and uses the results of such works. Such a situation is possible, for example, when the contractor performs the ground demolition works not provided for in the contract, and the client refuses to pay for them although they afterwards accept the foundation constructed in the foundation pit created by such demolition works;

1. the client pays for the additional works performed according to the principle of good will;

2. the client does not pay for the additional works performed and the contractor dismantles the works performed. Such an alternative of the contractor’s behaviour is possible only if the works performed can be dismantled without damaging other works already performed and accepted by the client. For example, building a pavement required more laying of paving tiles than provided for in the project. In such a case the contractor may dismantle the paving tiles laid and take them away.

If the contractor informs the client about unforeseen works (Fig. 1, 2-3), two alternative situations are possible depending on the client’s behaviour: 1. the contractor receives a reply to the notification (Fig. 1, 3-4);

2. the contractor does not receive a reply to the notification (Fig. 1, 3-5). The contractor’s reply (Fig. 1, 3-4) may be twofold: positive (Fig. 1, 3-15) or negative (Fig. 1, 3-16). In case of a positive reply all costs of the additional works are covered by the client.

In case of a negative reply the client is certainly not obliged to pay for the additional works. Additional works were not provided for in the construction contract, and thus nobody is entitled to make the constructor to purchase the works nor provided for in the contract. In such a case the contractor should continue the construction works without performing any unforeseen additional works.

A peculiar situation would arise if it is impossible to continue the construction without performing such additional works. In such a case the contractor has the right to terminate the construction contract. However, that would lead to the question whether the client is to reimburse the construction contractor for possible losses incurred because of the contract termination.

The CC does not provide an answer to this question. Therefore, if this issue is not discussed in the contract either, the principles of justice, reason and honesty stipulated in the CC must be followed. In practice the following situations and cases of applying such principles may be possible:

1. the client uses the occurrence of the unforeseen additional works as a prerequisite for the termination of the construction contract. It may be

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considered that the client has behaved so if, for example, the additional unforeseen works were of small volume and not costly and the client having terminated the contract with the construction contractor later enters into a contract with another contractor. In such a case the client should reimburse the construction contractor for the losses incurred because of the contract termination, which would be in line with the aforementioned legal principles; 2. the additional unforeseen works constitute the real reason for terminating the

entire construction project. Such a situation is possible if the unforeseen additional works are of big volume, very expensive and in case of terminating the construction contract the client suspends the construction works for an unlimited period. In accordance with the previously mentioned legal principles, in such a case the client is not obliged to reimburse the contractor for the losses relating to the contract termination.

If within the period set in the contract, and if no period is set in the contract, within a reasonable term the contractor does not receive a reply to their notification (Fig. 1, 3-5), two alternative situations are possible depending on the contractor’s behaviour:

1. the contractor suspends the construction works (Fig. 1, 5-6); 2. the contractor continues the construction works (Fig. 1, 5-7).

The right to suspend the construction works (Fig. 1, 5-6) is provided for in paragraph 4 of Art. 6.684 of the CC. The term of suspending the construction works is not limited by the CC. In case the contractor exercises their right to suspend the construction works, two situations are possible depending on the client’s behaviour:

1. the client manages to prove that the additional construction works were not necessary to perform (Fig. 1, 6-13);

2. the client fails to prove that the additional construction works were not necessary to perform (Fig. 1, 6-14).

In the former case (Fig. 1, 6-13) all the losses incurred by the contractor because of the suspension of the construction works are borne by the construction contractor. In such a case the contractor must continue the construction works omitting (not performing) any allegedly unforeseen works. In the latter case (Fig. 1, 6-14) the client must reimburse the contractor for all the losses incurred because of the suspension of the construction works. In this case the client must also provide directions concerning the performance of the additional works. Depending on the client’s directions, the construction works are continued or the construction contract is terminated. Such a conclusion concerning the contract termination may be made because the client cannot demand from the contractor to perform the works provided for in the contract and the client cannot prove that the construction works may be continued without performing the above construction works.

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If the contractor continues construction works and performs the works not provided for in the contract (Fig. 1, 5-7) despite the fact that they have not received the client’s reply to their notification about the need for performing additional construction works not provided for in the contract, two situations are possible:

1. the contractor manages to prove that the necessity for immediate actions (the performance of unforeseen construction works) was in the interests of the client while the suspension of work might have brought about perishing or damaging of the construction object (Fig. 1, 7-8);

2. the contractor fails to prove that the necessity for immediate actions (the performance of unforeseen construction works) was in the interests of the client while the suspension of work might have brought about perishing or damaging of the construction object (Fig. 1, 7-9).

These two situations are similar to those provided for in Fig.1, 10-11 and 10-12. The appearance of additional works not provided for in the contract may also be conditioned by subjective reasons such as changed needs of the client, which may cause them to amend the contract documentation and include additional works not provided for in the initial draft of the contract. Paragraph 1 of Art. 6.685 of the CC provides for the client’s right to unilaterally amend the contractual documentation and make provisions for additional works but only given the following conditions:

1. the value of such additional works does not exceed the amount equal to fifteen percent of the total value of the construction works provided for in the contract;

2. the amendments introduced do not alter the nature of the construction works provided for in the contract.

If at least one of the above conditions is not fulfilled, the client may introduce amendments to the contractual documentation only with the contractor’s consent. However, the above provision of the CC is a common dispositional condition of a construction contract, and the parties to the contract may change this contract condition on the basis of mutual agreement.

3. RISK AND LIABILITY ALLOCATION FOR THE BUILDING PRODUCT DEFECTS

3.1. Allocation of risk and liability when building products are supplied by the client

Paragraph 1 of Art. 6.686 of the CC provides for a dispositional norm providing for a common condition of a construction contract that the duty relating to the provision of materials, equipment, components and other structures of construction works is borne by the contractor unless the

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construction contract attributes this duty to the client. This means that the contractor must provide building products for the construction in two cases: 1. when this is provided for in the construction contract;

2. when the issue of providing building products is not discussed in the construction contract.

The duty relating to the provision of building products is borne by the client only in case it is directly provided for in the construction contract. Undoubtedly, the parties may agree that a part of the building materials are to be provided by the contractor, and the remaining part – by the client. Depending on who provides building materials, the issues of distributing risk and liability for construction defects are dealt with differently.

The alternatives of liability for inadequate quality of construction works because of the use of defected building materials are shown in the liability alternative formation tree (Fig. 2).

When building materials are provided by the client (Fig. 2, 1-2), two alternative cases are possible:

1. building materials are without defects (Fig. 2, 2-12); 2. building materials are with defects (Fig. 2, 2-3).

When building materials are without defects, no construction defects directly caused by poor quality of building materials may appear, and thus no liability for the above problem can exist. Undoubtedly, construction defects may appear for other reasons (violations of the construction technology, etc.). In such cases liability arises on different grounds.

When building materials are with defects (Fig. 2, 2-3), two alternative cases are possible:

1. the contractor notices the shortcomings (Fig. 2, 3-5);

2. the contractor does not notice the shortcomings (Fig. 2, 3-4).

If the contractor does not notice any defects of building materials, the general provision of paragraph 1 of Art. 6.686 of the CC that the party that must provide building materials and equipment is liable for defects should apply.

The issue of risk and liability should be solved in a somewhat different manner if the contractor notices the shortcomings of the building materials. In such a case the CC obliges the contractor to warn the client thereof (paragraph 1 of Art. 6.659 of the CC) and to demand to replace the building materials of poor quality with suitable ones. Depending on the contractor’s behaviour two alternatives are possible in such a case:

1. the contractor demands to replace them (Fig. 2, 5-6);

2. the contractor does not demand to replace them (Fig. 2, 5-7).

Paragraph 3 of Art. 6.686 of the CC provides for the contractor’s duty to terminate the contract if the client refuses to replace the building materials in which defects have been identified. This leads to the conclusion that to demand to replace the defective building materials is the contractor’s obligation. When

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interpreting this provision of the CC, it may be concluded that the contractor cannot use the defective building materials even in case the client demands that. This provision of the CC can be explained by the fact that the contractor is a construction professional and cannot perform work in such a manner that later the result of such work would be inadequate and would constitute a threat to its user or third parties.

Having regard to the above circumstances, it may be concluded that in case the contractor uses the building materials with identified (noticed) defects provided by the client, the overall liability for the building defects is borne by the contractor. Such liability arises in case the contractor notices or as a professional should have noticed such defects. In accordance with the principles of reason and honesty the contractor’s liability should not arise if the contractor has not and could not notice such defects of building materials (conformity certificates and test protocols were presented together with the building materials, it was impossible to identify defects visually or using other available means, etc.).

When the contractor demands to replace poor-quality building materials, two alternatives are possible:

1. the client replaces the defective building materials (Fig. 2, 6-8);

2. the client does not replace the defective building materials (Fig. 2, 6-9); After the poor-quality building materials are replaced with good ones, the question of liability is dropped.

If the client does not replace the defective building materials with good-quality building materials, the contractor may behave in two ways:

1. the contractor terminates the contract (Fig. 2, 9-10);

2. the contractor does not terminate the contract (Fig. 2, 9-11).

In the former case the contractor fulfils the imperative requirement provided for in the CC. The contract termination by the contractor causes legal consequences provided for in Art. 6.686, Art. 6.221 and Art. 6.222 of the CC. The contract termination relieves both parties from the obligation to execute the contract. In such a case the client must fully pay for the works performed prior to the contract termination. As in this case construction works are not performed using poor-quality materials, no liability-related issues arise.

If the contractor does not terminate the contract, the overall liability for construction defects is borne by them as they continued the construction works in spite of the imperative provision set out in paragraph 3 of Art. 6.686 of the CC demanding to terminate the contract in such a case.

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3.2. Allocation of risk and liability when building products are supplied by the contractor

When building materials are provided by the contractor (Fig. 2, 1-13) also two alternatives are possible:

1. building materials come without defects (Fig. 2, 13-14); 2. building materials come with defects (Fig. 2, 13-15).

Like in the case when building materials are provided by the client, if such building materials come without defects, no construction defects directly caused by poor quality of building materials may appear, and thus no liability for the above problem can exist.

If the contractor uses the defective building materials, there may be two situations conditioning the allocation of risk and liability between the parties: 1. the client notices the shortcomings of building materials (Fig. 2, 15-16); 2. the client does not notice the shortcomings of building materials (Fig. 2,

15-21).

Paragraph 2 of Art. 6.689 of the CC makes a provision that the client having detected any deviations from the contract terms and conditions that may worsen the quality of the construction works or other drawbacks must immediately inform the contractor thereof. Having failed to inform about the drawbacks noticed, the client loses the right to refer to them in the future. The systematic and logical analysis of the above paragraph of the CC Article allows stating that to inform the contractor of the defects noticed in the building materials is the client’s duty. Legal consequences of the failure to fulfil that duty are reflected in the inability to refer to those circumstances in the future as well as when solving the issues relating to the liability for inadequate quality of the construction subject. Therefore, the question of liability when the client notices defects of building materials depends on the client’s behaviour:

1. the client informs the contractor about the defective building materials (Fig. 2, 16-18);

2. the client does not inform the contractor about the defective building materials (Fig. 2, 16-17).

If the client does not inform the contractor about the defective building materials, they are deemed to have failed to perform their duty provided for in paragraph 2 of Art. 6.689 of the CC and lose the right to refer to those circumstances in the future, which implies that the overall liability for inadequate quality of the construction object is borne by the client.

The above conclusion may be made only when the defects of building materials are noticed by the client but are not known to the contractor. If the contractor provides poor-quality materials, of which they are aware, they must also be liable for the construction defects caused by that, i.e. such a situation leads to joint liability of the client and the contractor.

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Such a conclusion may be drawn based on the following provisions of the CC:

1. Paragraph 2 of Art. 6.686 of the CC: “the party whose duty is to provide the construction with materials and equipment shall be liable for the defects ..”; 2. Provision of paragraph 4 of Art. 6.689 of the CC that if the contractor

improperly fulfils the contract, they shall have no right to rely on the fact that the client failed to effectuate control and supervision of the construction work, except in the cases where the duty of the client to perform such control and supervision is established by the law or contract (the mandatory nature of the technical control and supervision is provided for in the Construction Law).

If the client informs the contractor about the defective building materials, the liability issue depends on the contractor’s behaviour:

1. the contractor replaces the building materials with adequate-quality building products (Fig. 2, 18-19);

2. the contractor does not replace the building materials with adequate-quality building products (Fig. 2, 18-20);

After the poor-quality building materials are replaced with good ones, the question of liability is dropped. If, after the client informs about the defected building materials the contractor does not replace them, i.e. intentionally uses poor-quality materials for the construction works, the overall liability for the poor quality of the construction object is borne by the contractor.

The last situation to be discussed is when the contractor provides poor-quality building materials and the client does not notice that (Fig. 2, 15-21). In such a case, in accordance with the general rule, the risk and liability for the quality of construction works must be borne by the construction contractor. Such a conclusion may be drawn based on the provision of paragraph 2 of Art. 6.686 of the CC: “the party whose duty is to provide the construction with materials and equipment shall be liable for the defects thereof which render those materials and equipment impossible to be used without worsening the quality of the construction work unless it is proved that the impossibility of the use of those materials and equipment arose through circumstances for which the other party is liable”. Besides, paragraph 1 of Art. 6.689 of the CC provides for the client’s right to control and supervise the process and quality of the construction works performed but not the duty to do so.

The latter case, undoubtedly, leads to the question whether the client really did not notice defects of building materials because it determines which party is liable for the quality of the construction works. Naturally, in such a case the client would, by all means, be interested to insist that they have not noticed any defects of building materials and refer to the provision of paragraph 1 of Art. 6.689 of the CC that the control of the construction works is not their duty but only a right.

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Solving the question whether the client has noticed defects of building materials, it is necessary to rely not only on the previously quoted provisions of the CC but also the Law on Construction as well as regulatory bylaws also setting out the client’s duties to control the construction process, including the quality of building materials.

Paragraph 1 of Art. 16 of the Construction Law makes a provision for the client’s duty to appoint construction supervisors who must perform the technical supervision of the construction. Point 1 of paragraph 2 of Art. 16 of the Construction Law makes a provision that the construction supervisor appointed by the client must “control the quality of construction materials and equipment used for the construction and forbid to use them if they do not comply with the construction design project, regulatory technical documentation, regulatory construction safety and purpose documents as well as if no documents certifying the quality of the construction materials are presented”. This means that the client performs the technical supervision of the construction through the appointed technical supervisors of the construction process.

4. CONCLUSIONS

Adequate and reasonable allocation of risk and liability in construction contracts has great impact on the value, quality and efficiency of the construction project. The allocation of risks and liabilities between the parties to construction contracts depends on the terms and conditions of the contract, behaviour of the parties to the construction contract, the CC and legal norms stipulated in other sources than the Construction Law.

The allocation of risk and liability between parties to construction contracts can be analysed when drawing trees of the risk and liability allocation variants.

The article presents trees of variants of the risk and liability allocation for unforeseen additional works and defects of construction materials.

REFERENCES

1. Baloi D., Price A. D.: Modeling global risk factors affecting construction cost performance. International Journal of Project Management 21(2003) 261-69.

2. Charoenngam C., Yeh C.-Y.: Contractual risk and liability sharing in hydropower construction. International Journal of Project Management, 1999, Vol. 17, No.1, 29-37.

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3. Civil code of the republic of Lithuania. (In Lithuanian). Valstybes zinios 2000 No. 74-2262.

4. Gransberg D., Ellicot M.: Best-value contracting criteria. Cost engineering, 1997, 39(6):31-4.

5. Jannadia O. M. et al.: Contractual methods for dispute avoidance and resolution (DAR). International Journal of Project Management, 2000, Vol 18, 41-49.

6. Kozek J., Hebberd C.: Contracts: Share the risk. Journal of construction Engineering and management, 1998, 111(2):356-61.

7. O’Reilly M.: Civil engineering construction contracts, London, Thomas Telford Publication, 1996.

8. Owners guide to saving money by risk allocation. American Consulting Engineers Council and Associated General Contractors of America, Washington 1991.

9. Turney J. R., Simister S. J.: Project contract management and a theory of organization. International Journal of Project management 19 (2001) 457-64.

10. Ward S.C., Chapman C.B., Curtis B.: On the allocation of risk in construction projects. International Journal of Project Management. 1991, Vol 9, 140-147.

11. Zaghloul R., Hartman F.: Construction contracts: the cost of mistrust. International Journal of Project Management, 2003, Vol 21, 419-424.

S. Mitkus

GRAFICZNY MODEL PODZIAàU RYZYKA

I ODPOWIEDZIALNOĝCI W UMOWACH BUDOWLANYCH

S t r e s z c z e n i e

Jedną z podstawowych funkcji umowy o roboty budowlane jest podziaá ryzyka i odpowiedzialnoĞci miĊdzy stronami umowy. W artykule omówiono ryzyko wykonania dodatkowych, nieprzewidzianych robót budowlanych oraz defektów produktów budowlanych. Ustalono, Īe podstawowymi czynnikami warunkującymi podziaá ryzyka i odpowiedzialnoĞci są warunki umowy o roboty budowlane, normy prawne (szczególnie nowego, waĪnego od 1 lipca 2002 roku kodeksu cywilnego Republiki Litewskiej) oraz zachowanie stron umowy. Kwestia podziaáu ryzyka i odpowiedzialnoĞci jest w artykule omawiana z uwzglĊdnieniem wymienionych czynników poprzez tworzenie modeli graficznych – drzew podziaáu ryzyka i odpowiedzialnoĞci.

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