Attitude on conflict-initiating issues related to undesirable events and contractual responsibility preference by choice-based conjoint analysis

Abstract

The objectives of this study are to develop knowledge for the analysis of contract clauses related to undesirable events and also for decisions on the allocation of responsibilities to contracting parties. To demonstrate that the knowledge gained from this study can be applied to analyze contract clauses, the standard contract of Thai government was analyzed. A list of 223 issues related to undesirable events that may initiate conflict was synthesized from document studies. The level of importance of each issue was determined from the probability of conflict arising from each issue, which was, in turn, calculated from the data from a survey on the attitudes of the construction industry towards that issue. The proportion of people in the construction industry who preferred each alternative in the questionnaire was also calculated. An appropriate approach for writing contract clauses was determined from the alternative that the majority of the population in the industry preferred. The data necessary for making decision on the allocation of responsibilities for each effect of undesirable events to the contracting parties was also synthesized in this study. These data are the attitude of contracting parties towards the assignment of responsibilities for each effect of undesirable events and the risk premium that the contractor would like to request and the extra cost that the employer is willing to pay for if the contractor is assigned as being responsible for the effect. Choice-based conjoint analysis, which is the combination of statistical techniques and methods originally designed for marketing research, is creatively applied in synthesizing these data. The application of choice-based conjoint analysis as performed in this study is a new innovation in the process of synthesizing the data necessary for the consideration of responsibility allocation