Construction dispute and contract incompleteness in Nigeria construction industry

Abstract

This study identifies that the underlying root cause of construction disputes is contract incompleteness caused by bounded rationality and uncertainty. Using the relative importance index (RII) and confirmatory factor analysis(CFA) from SEM AMOS, this study examines the occurrence likelihood and significant effect on dispute occurrence in the contract incompleteness minefield (ambiguity of contract document (AOD), deficiency of contract document (DOD), inconsistency of contract document (IOD), and defectiveness of contract document (CDD)), and the manifestation of opportunism (violation of commitment (VOC), forced renegotiation (FRC), evasion of obligations (EOB), and refusal to adapt to change (RAC)). A large-scale survey of 350 professionals from the Nigerian construction industry was conducted. The RII result of the highly ranked minefield of the manifestation of contract incompleteness shows the interrelationship between contract incompleteness and dispute occurrence. Likewise, the CFA result significantly affects contract incompleteness on dispute occurrence. Therefore, the need to minimise contract incompleteness in the Nigerian construction industry becomes a pertinent issue to reduce dispute occurrence.