The hype for e-business in the construction industry is now over. With industry players already embracing the change, many are now shifting their focus towards the impact, or non-impact, that e-business has left
in their businesses. e-Business applications in the construction industry are poised for restructuring as industry players have recognized that e-business will re-intermediate existing market relations, disrupting some
and driving new efficiency in others, therefore the focus in the next era should on restructuring tasks.
Despite predictions about the success of e-business in construction and how it could change the construction industry, the industry is still struggling with e-business applications. Indeed, the adoption by the construction industry of e-business applications and IT in general has been sluggish but steady. The industry should now be concerned with the readiness for the next phase of e-business implementation; a phase that will involve many more players than the innovators and early adopters.
The question of how much value e-business can add to construction operations has been studied in numerous works. The need for legally binding e-contracts in construction applications have been noted. More importantly, the link between the existence of quality legal rules for regulating e-business and the amount of e-business revenue has been established. It has been shown that quality legal rules and enforcement are ‘significantly and positively’ associated with e-business revenues. It is also documented that, if and where a legally binding e-collaboration and e-business system is established in construction projects, the utilization of such a system increases noticeably.
As such, the identification and analysis of e-construction legal risks, coupled with the incorporation of the legal dimension in programming e-business tools can radically improve the utilization of e-business in construction and significantly improve the trust and confidence of the industry in e-business.
There is a gap, however, in the current literature regarding the specific legal risks related to electronic commerce in construction. This chapter attempts to fill this gap by providing a comprehensive analysis of those legal risks.