SALONGA, KENJI NICOLAI M.

Formative Assessment no. 6

 What is construction dispute?

o Combination of environmental and behavioral factors
o Long term transactions with high complexity
o Impossible to resolve every aspect

 What are the most common causes of construction disputes in the Philippines?
One of the most common causes are the hierarchy of the workers in the project,
since some consider themselves as above from the others, conflicts arise. This could
be because of lack in communication, unreliable workers, etc.

 How do you resolve construction disputes?

There should be a negotiation between the two parties, this will attempt to reach
a just and satisfactory resolution between themselves before moving on to other
means. If there is still no visible solution, a third party will be involved to solve the
conflict.

 What is a construction bond?

o also known as a contractor license bond, is a required bond for a construction
project. A contractor is required to have construction bonds for nearly all
government and public works projects.
o is a type of surety bond used by investors in construction projects.
o managing the construction work states he can complete the job according to the
contractual policy

 What is the advantage of issuing a bond as collateral?

o A collateral trust bond is a bond that is secured by a financial asset.
o The value of the collateral is periodically reassessed to make sure it still matches
the value initially pledged.
o This kind of bond is considered safer than an unsecured bond; however, the
tradeoff with greater safety is a lower yield and therefore lower payout.

 Some studies have claimed digitalization can be the key towards ending issues of
disputes on construction projects. What is your take on this, considering that
SALONGA, KENJI NICOLAI M.

dispute arises from diverse areas of construction project delivery and from
different construction participants?
o There are some key factors on why digitalization can help in this situations, since
communication can solve most of the construction issues, through social media,
and messaging apps can help, with constant update of the construction, problems
and misunderstood factors can be solve easily.

Sample Lawsuit

P68-million estafa suit filed vs domestic Okada contractor

FINMAT International Resources Inc. faces a lawsuit after a construction

supplier Golden Mile Enterprises for not fulfilling its responsibility. FINMAT failed to
settle the payment on builing materials amounting to P68 Million during the
contruction of a resort and casino in Paranaque. In 2016, Finmat tapped the services
of GME for the supply and application of the epoxy-injection project worth P2.7
million.

Several project followed and the total amounted to P60 Million. In this case
FINMAT, has already seen this coming since they already did this more than once,
this cannot be solved in a mere converstion so the opposing company filed an estafa
to FINMAT, since what it did is unlawful.

References:

o https://www.lexology.com/library/detail.aspx?g=3c05af6b-1733-4e2b-a552-
108163ba9319
o http://constructionexec.com/article/six-tips-for-successfully-resolving-construction-
disputes
o https://businessmirror.com.ph/2019/02/12/p68-million-estafa-suit-filed-vs-
domestic-okada-contractor/