Legal issues

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.

Legal Issues in ebusiness
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.

Types of Legal Risks