Construction Claims

Some construction contracts distinguish between a “claim” and a “dispute” as distinct phases within the overall dispute resolution procedure. In these contracts, a claim represents a formal assertion by one party seeking additional compensation, time extension, or other contractual relief. A dispute arises only if that claim is rejected, partially rejected, or ignored, and the claiming party then refuses to accept this outcome. Claims are not adversarial unless and until they escalate into disputes. Once a claim has escalated into a dispute, the contractual procedure may require it to be submitted to a Dispute Adjudication Board (DAB), which is an independent expert (or panel of experts) appointed at the start of the project. The decision of the DAB may be advisory or binding in the interim pending final resolution through arbitration or litigation.