Construction Projects are complex and high stakes. These Projects carry numerous risk elements, including but not limited to Scope of Works (SOW), Design Philosophy, Site Conditions, Weather, Interface Matrix, and express or implied contractual provisions. To effectively mitigate or (alleviate) these associated risks, Contract serves as the ultimate guide as it defines the rights, responsibilities, and obligations of Parties involved, establishing the framework for risk allocation, payment structures, timelines, and dispute resolution. Without a clear understanding of these contractual provisions, Projects are susceptible to mismanagement, cost overruns, delays, and legal disputes.
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    Once the CAD presentation has been reviewed and discussed with the key personnel, it should be distributed to all the Project departments. Each discipline must thoroughly understand the Contract requirements for their scope of work and become familiar with the Contract procedures.

    Engineering team can identify & advise on the technical risks.

    Procurement team can identify & advise on long lead items and market trends for suppliers/subcontractors.

    Construction managers can evaluate & advise on actual site conditions.

    Planning team can advise on critical items/activities for the Project.

    Quality and Safety team can evaluate stringent requirements to be followed at Site.

    Logistics team can identify risks on the supply chain.

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    Why is contract awareness important in construction projects?

    Construction projects are complex and carry significant risks. A clear understanding of the contract helps mitigate risks, avoid mismanagement, and reduce the likelihood of delays, cost overruns, and disputes.

    What is a Contract Appreciation Document (CAD)?

    The CAD is a summary prepared by the Project Contract Manager outlining key contractual provisions. It helps align the project execution team with the terms of the signed contract and highlights potential risks, obligations, and critical clauses.

    Who should be involved in the contract review meeting?

    The project site team, especially those responsible for execution—engineering, procurement, planning, construction, quality, safety, and logistics—should be involved. This ensures that knowledge is transferred from the team that negotiated the contract.

    What key elements should be included in the CAD presentation?
    • Full contract and tender documents
    • Order of priority of contract documents
    • Project milestones
    • Payment terms and submission requirements
    • Obligations of both parties
    • Change management procedures
    • Notice requirements
    • Onerous or high-risk contract clauses
    • Handover requirements
    • Dispute resolution mechanisms
    What is the order of priority of documents, and why does it matter?

    This determines which document takes precedence in case of conflicting terms. It’s crucial for resolving ambiguities and ensuring proper contractual interpretation.

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