Abstract

Contractual Disputes are common in construction industry. Areas of contractual disputes in infrastructure projects often include schedule performance, payment, quality of works and variations. Dispute resolution processes provide platform for parties to assert their entitlements. However, if not promptly, effectively and consensually resolved, disputes often result into poor relationship between contracting parties, compromise of quality and scope, poor cash flows, suspension/abandonment of works and even termination of contracts. Effective dispute resolution process should take into consideration the commercial and environmental factorsthat preserve relationships for future business opportunities. Dispute resolution processes should also be aliveto contractual provisions and enabling legal and regulatory frameworks within which the investment operates. For success ad continuity of investment, dispute resolution methods should lend themselves to the dynamics of business strategy and contract operational environment. This study set out to examine the influence of Business Strategy on resolution of contractual disputes in road construction projects in Kenya, and to determine theinfluence of Contract Operational Environment on resolving contractual disputes in road construction projectsin Kenya. A correlation design with descriptive statistics; mode, mean and standard deviation were used for theanalysis data collected from senior monitoring and evaluation staff of the contracting parties. ANOVA and Regression models were deployed for inferential analysis. Qualitative information was organized into themes and triangulated with quantitative data for an in-depth interpretation of results. The study found that business strategy has a weak positive correlation with resolution of contractual disputes (r = 0.165, p = 0.01) whilecontract operational environment has a near moderate but positive relationship with resolution of contractualdisputes (r = 0.305, p = 0.01). However, regression analyses established that there is significant interveningand moderating influence of business strategy and contract operational environment on resolution ofcontractual disputes respectively.

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