Allocation Of Risk In Construction Contracts

"Ensuring that risks are owned or jointly owned by the party or parties best able to manage and bear them, and understanding how they intend to handle them, is key to delivering value for money and successful outcomes."

Construction Playbook, September 2022

The benefits of getting the allocation of risk correct in a construction contract are invaluable.

In the context of any commercial contract for work in which the external (and sometimes internal) influences pose considerable risk in themselves, proceeding without a proper consideration of the allocation of risk at the outset can spell cost and confusion (and costly confusion) when those influences rear their heads.

Types of risk