Contractual Dispute in Construction Projects: A Quantitative Analysis of Causes and Resolutions

Chin, Tze Rou (2025) Contractual Dispute in Construction Projects: A Quantitative Analysis of Causes and Resolutions. Final Year Project (Bachelor), Tunku Abdul Rahman University of Management and Technology.

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Abstract

Contractual disputes are a significant challenge in the Malaysian construction industry, often resulting in project delays, cost overruns, and strained relationships. This study investigates the primary causes of these disputes, evaluates the effectiveness of different dispute resolution mechanisms, and examines their impact on project outcomes, such as cost control and schedule adherence. Using a quantitative approach, structured questionnaires were distributed to construction professionals, including contractors, consultants, and developers. The findings reveal that payment delays, ambiguities in contract documents, and project scope variations are the most common causes of disputes, with payment issues having the most disruptive effect on project timelines and contractor cash flow. Among dispute resolution mechanisms, adjudication proved to be the most effective for resolving payment disputes swiftly, while mediation was noted for maintaining business relationships. Arbitration and litigation, although useful for complex disputes, were perceived as costly and time-consuming. The research highlights the importance of timely and strategic use of alternative dispute resolution (ADR) methods, particularly adjudication and mediation, to mitigate negative impacts on project performance. Recommendations include clearer contract terms, proactive stakeholder engagement, and broader use of ADR mechanisms to improve dispute management and project outcomes in the Malaysian construction industry.