Contractual structure

The project participants referred to in the previous section enter into a series of contracts in relation to the project which define their rights and obligations. 

The contractual structure for the project tends to involve a chain of contracts which starts at the top with the project owner, and then goes downwards to the contractor, and then further downwards to the sub-contractors and suppliers.

As participants contract only with the organisations above and below them in the chain, it can mean that participants working on a project may be working side by side with other participants with which they have no contract.  This can cause complications.

The chart below shows a relatively simple “construct only” contractual structure with only 13 project participants.  However, on large and complex projects, there may be over 100 participants in the contractual structure.