Comment: Risk Allocation Norms of Civil Construction Contracts in Ethiopia

Abstract

Risk is any uncertainty in an industry including the construction sector. Claims and disputes arise when risks occur in construction projects. This comment discusses risk allocation under Ethiopian construction law and examines risks in civil construction contracts.  The comment highlights the gaps in risk allocation norms under the standard format of construction contract that was issued by the Ethiopian Ministry of Work and Urban Development (MoWUD) in 1994. I argue that MoWUD’s principles of risk allocation should be updated so that they can include employer insurance and embody provisions that adequately regulate legal risks which can arise from amendment of laws. 

Key terms

Risk; Civil construction contract; FIDIC; MOWUD format; Employer; Contractor Agency; Compensation;  Indemnity; Agent;  Principal