How does Cost / Price Escalation calculated in Construction:- Contract terms and conditions play a crucial role in proper and timely execution of works, preventing and resolving disputes arising thereto. Conditions of contract guide the involved parties regarding their rights, obligations, responsibilities and procedures to be followed. Irrespective of all the provisions in the contract document, claims are raised on a construction site. Claims generally arise when one party to the contract suffers a detriment for which that party needs to be compensated by the other party. It may be defined as a legitimate request for additional compensation on account of a change in the scope of project. Possibility of escalation over the period of execution of project leads to claim for escalation amount in addition to the base cost. Claims when not properly sorted lead to disputes. Normally the method of Escalation whether applicable / not applicable will be clearly mentioned in Contract Docum...
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