Construction Claims and Expert Services

Unforeseen and differing ground conditions provide a major risk to contractors. Ground conditions are not limited to the geological properties of the ground but may also include physical obstructions, such as underground utilities. The risks associated with underground utilities can be just as great and with consequences as severe as geological conditions. Despite the clarity of the allocation of risks associated with unforeseen and differing ground conditions provided by standard forms of contract, and despite the parties’ contractual positions being well established, unforeseen and differing ground conditions are still the single most common source of dispute within the construction industry. This article provides an overview on how construction contracts address the risks of unforeseen and differing ground conditions and the approaches commonly adopted to manage these risks.

Unforeseen and differing ground conditions are a major risk in construction projects. Once the allocation of the risk of the ground conditions is determined, how are any changes in those ground conditions proven? The common law provides that contractors should satisfy themselves regarding ground conditions prior to entering into a contract. But to what extent can this be achieved, when the tender period is short and it is impractical, if not impossible, to carry out extensive or any site investigations? This article provides an overview on the difficulties associated with how construction contracts deal with identifying and proving differing ground conditions.

It is generally considered that the party who has best control over the information of the ground conditions is the party best placed to control and bear the risk. However, the parties are reluctant to spend money on detailed site investigations. In preparing tenders and planning methods of construction, contractors are often solely reliant upon the (limited) information provided by the Employer. This article addresses the general obligations of the Employer and the Contractor in providing and obtaining information of underground site conditions during the tender stage. .

Before the advent of GBRs, ground data was traditionally represented within contracts by limited geotechnical data and utility layout drawings provided by the Employer. Tenderers generally relied upon the accuracy of the data provided in determining anticipated ground conditions. Historically, the parties’ different interpretations of the ground data, and the uncertainty of the risk allocation between the parties, led to disputes. Has the introduction of GBRs reduced the incidence of disputes regarding ground conditions?