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Building Sustainability into Contracts

Change and Dispute Management in Construction

 

STUDENT PAPER

By Guilhem Hervé

SKEMA Business School

Lille, France

 



ABSTRACT

Sustainability is at the heart of many discussions nowadays, as human activities are subject to evolution in order to reduce negative impacts over our resources and leave to next generations a sane planet and society. Sustainability encompasses many topics as it is a global vision. Therefore, this paper is developed to analyze and identify the best practices and methods to foster sustainability through dispute management and change, with a focus on the construction area, subject to many disputes. In this context, the author will compare the different existing methods for dispute resolution and identify state of the art practices to build sustainability into contracts. Based on this analysis, the author recommends the use of the combination of mediation and arbitration as the best method and suggests a number of key practices. These practices highlight the importance of a proactive approach in contract management.

Key words: Sustainability, Change, Dispute, Resolution, Construction, Contracts

INTRODUCTION

With the objective to reduce the negative impacts of human activities over our resources, sustainable development imposed itself as unavoidable in every business. As a global strategy, it should be introduced in every part of a business in order to maximize sustainability, which makes it a key part to integrate into contracts. Indeed, in order to integrate sustainability into an organization or a business, the agreement of parties is an essential step to manage. Building sustainability into contracts could thus have an important positive impact for businesses and society in general. We consider here sustainability as the ability to last and continue indefinitely by causing no damage to the resources of the project.

Construction is one of the areas most impacted by this change while having to manage contracts in every project. Construction companies, having an important impact on environment, are now widely integrating sustainable practices into their processes in order to align with the need of our society and to communicate their will to contribute to the necessary change mankind needs to undertake. Nevertheless, contracts issues are widespread and statistics show that the number of disputes is not decreasing and tend to be a recurrent issue in nowadays contract management for construction, which is jeopardizing contracts efficiency and sustainability. A better management of disputes could enable contractors to avoid time and money consuming disputes, resulting in positive impacts on the business.

In this paper, we will focus especially on the dispute management in construction contracts and aim to identify the best existing practices in order to build sustainability into contracts. In this perspective, we will compare the various methods of dispute management in different sources of contract content and bring into light the best practices for a sustainable contract. The result should encompass a number of good practices that will help contractors introduce or develop sustainability in contracts while improving dispute management in a more sustainable way.

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To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director, at [email protected]



About the Author


Guilhem Hervé

SKEMA Business School
Lille, France

 


Guilhem Hervé
is a MSc student in SKEMA Business School, majoring in Project and Programme Management and Business Development (PPMBD). He is also studying engineering in the Graduate Engineering School Centrale Lille in a Masters program, majorimg in Strategy and Management of Organizations. In 2017, he worked for Thales, a French multinational company designing electrical systems for aerospace, defense and security as enterprise architect assistant in Velizy, France.

He is highly motivated by environmental and sustainable issues. He lives in Lille, France now, and can be contacted at [email protected]