EFFECT OF CONTRACTUAL RISKS ON BUILDING CONTRACTS IN ABUJA, NIGERIA

Abstract

Construction project activities are carried out by different parties and each of the activities has its risk which results in cumulated associated risk for the project under different circumstances. They are mostly influence to contractual risks which occur as a function of contract provisions and clauses. This study aims to examine the effect of contractual risks on building contracts with a view to suggesting strategies for minimizing the likelihood of occurrence of the risks factors. In order to achieve this aim, 35 potential risk factors were identified from standard form of contracts. Data were collected through questionnaires distributed to consulting and construction firms in Abuja. Analysis of data was using Mean Item Score and T- test. The observed P value of 0.458 was greater than 0.05. Findings revealed that there is no significant difference between the perception of consulting and construction firms on the level of awareness of the contractual risk factors. It was concluded that Contractor and consultant have adequate knowledge of risk and their sources in building contract. The study however recommended that risk management should be integrated into project management processes to improve building contract in Abuja.