Claims and Dispute Resolution

Managing the claims process: where claims come from, how contract types and delivery methods drive claim frequency, intervention points for early resolution, change orders versus claims, prevention through Front End Planning, Dispute Review Boards, documentation and communication, and the dispute resolution techniques.

5 minutes 5 Questions

In the PMI Construction Professional (PMI-CP) framework, Claims and Dispute Resolution covers how project professionals in the built environment prevent, manage, and resolve disagreements over contract terms, scope, time, and cost. Construction projects involve many stakeholders, complex contracts,…

Concepts covered
Problem Areas That Generate ClaimsClaim Documentation and Contemporaneous RecordsNotice Requirements and Time BarsThe Claims Process and Key Intervention PointsChange Orders Versus ClaimsEarly Resolution of ClaimsClaims Prevention Through Front End PlanningDispute Review BoardsThe Risk Framework as Claims ReductionSelecting a Dispute Resolution TechniqueNegotiation and Mediation of DisputesLessons Learned and Historical Claims DataContract Types and Claim FrequencyDelivery Methods and Claim FrequencyRoot Cause Analysis of ClaimsAdjudication, Arbitration and LitigationDelay, Disruption and Acceleration ClaimsQuantifying Claim Cost and Time ImpactsCommunication Practices That Prevent Disputes
Test mode:
Start practice test

PMI-CP - Claims and Dispute Resolution Example Questions

Test your knowledge of Claims and Dispute Resolution

Question 1

Under a lump-sum contract, the owner issues a change order for relocated mechanical risers, and both parties agree on the direct cost. The change order form states that the adjustment is full compensation for all direct, indirect and time impacts unless an exception is written on the form. The contractor's project manager suspects the work will delay the critical path, but the schedule analysis is still incomplete. What should the project manager do?

Correct Answer: Sign for the agreed direct cost, write in a time-impact exception, and serve claim notice

Signing for the agreed direct cost while writing a time-impact exception on the form, and serving claim notice, secures payment for the settled work and keeps the unresolved delay entitlement alive.
Signing the form as issued triggers the full-compensation release, so a later delay request would likely be barred. Holding the form unsigned stalls payment and the relationship over cost that is already agreed. Returning the form and claiming everything turns a settled item into a dispute and wastes the agreement already reached.
Key concept: reservation of rights and avoiding accord-and-satisfaction waivers in change order administration, combined with timely claim notice.

Question 2

During foundation works, a contractor gives timely notice of a claim for extra dewatering after hitting an unforeseen underground spring. The owner's project manager is tempted to defer all claims until substantial completion so the team is not distracted. The contract's dispute ladder begins with site-level negotiation. Which action should the project manager take?

Correct Answer: Hold a site-level meeting with the contractor now to review facts and settle

Holding a site-level meeting now is correct because the contract's dispute ladder starts with negotiation at site level. Resolving a timely claim early, while the facts are fresh, keeps small issues from escalating and protects cost and schedule.
Logging the notice and waiting until the final account defers resolution, lets the issue fester and invites bigger disputes later. Referring the claim to the Dispute Review Board after completion skips the first rung of the ladder and wrongly delays action. Asking the designer for a report first may help gather facts, but it should not hold up the talks the contract requires.
Key concept: early, tiered claims resolution through the contractual dispute ladder.

Question 3

An adjudicator's decision awards a contractor 1,240,000 for a disputed variation. The adjudicator's own reasoning values the items at 1,024,000, so the award contains a transposition error. The contract's adjudication rules let either party ask the adjudicator to correct clerical or arithmetic slips within five days of the decision, and three days have passed. The owner accepts the rest of the decision. Which remedy best fits the owner's position?

Correct Answer: Request the adjudicator's correction of the figure under the slip rule

Asking the adjudicator to correct the figure under the slip rule is right because the error is a clear transposition that conflicts with the adjudicator's own reasoning, and the five-day correction window is still open.
Serving a notice of dissatisfaction and going to arbitration is disproportionate when the owner accepts the rest of the decision and a quick contractual fix exists. Paying only the figure in the reasoning means unilaterally refusing to comply with a binding award. Paying the full award and recovering the excess later ties up cash for no reason and ignores the available correction mechanism.
Key concept: using the slip rule to correct clerical or arithmetic errors in an adjudication decision.

More Claims and Dispute Resolution questions
282 questions (total)
Practice 100 questions
One session at a time, always new questions