Empirical Study of the Serverity of Loss and Expense Claims on Buildings Contracts in Nigeria

Abstract

Claims for loss and /or expense is characteristic of most building contracts in Nigeria irrespective of their size and scope; and often defeats project objectives of time, cost and functionality by leading to their time and cost overrun. This study aims at minimizing the negative effect of loss and /or expense claims by providing an information database on the severity of impact of individual claim clauses on building contracts administered with the Standard Conditions. The method of study was a descriptive survey research and the study population involved 120 construction industry professionals comprising Architects, Quantity Surveyors and Engineers with practice in Rivers, Abia and Imo states, all in Southern Nigeria. The research instrument involved a well structured questionnaire.. Data obtained were presented, analyzed and interpreted using the percentage and index methods, while test reliability and significance were conducted by means of Kendall’s Correlation Coefficient and Pearson’s Chi-Square statistic respectively. The result of the study shows that the higher a claim’s percentage agreement factor, the higher the rank orders of claim and the greater the severity of impact on contract strategy. The study concludes that of the fourteen loss and/or expense clauses in the Standard Conditions, claim clauses 11(6), 1, 11(4), 12, 24, 31, 23 and 27 ranked most in descending order of severity. The study recommends a comprehensive pre-contract study by project participants in order to minimize loss and /or expense claims.

Keywords: Loss, Expense, Claims, Severity, Contract, Strategy