The interests of buyers differ considerably from those of sellers. For instance, buyers want a low price while sellers want a high price, but are these disagreements over price accommodated by market forces? Conflict is present in many transactions across the economy. Conflicts may arise when buying or selling a car, agreeing wages to be paid or negotiating an exit from the European Union. The different parties have different interests, and disputes are common. In construction projects, disputes arise for a number of specific reasons. For example, according to Sithole (2016), disputes can arise over contractual issues, management problems, disagreements between people, disputes over payment or quality, issues arising out of design problems and issues of communication and misunderstanding.

No construction contract can possibly predict all the problems that may arise in the course of a project. In one sense, these disputes are all symptoms of a central conflict underlying all commercial relationships between the actors in any production process; in the case of construction projects, for example, disagreements between contractors, subcontractors, developers and suppliers. These issues certainly form the specific details of many disputes that arise on site, where contractors and clients may continue working together on the production process even when they are in dispute. This is in contrast to many other industries, such as manufacturing, where production takes place prior to the client purchasing the finished product and where disagreements can be resolved without affecting the customer directly – with the exception of internal disputes between management and the workforce, when strikes may delay delivery of the finished product.

To resolve the many disputes that arise in the construction industry, there are a number of ways of dealing with them, including arbitration, adjudication and mediation, all designed to avoid the expense of litigation in court, which is seen as a costly last resort. Before going to the expense of litigation arbitrators, adjudicators or mediators may be appointed as a means of resolving matters more speedily and at lower cost than using the formal legal system.

One of the underlying sources of conflict in the construction supply chain is the result of disagreement over the share of the overall price charged in return for the risk, effort and reward for undertaking particular tasks by the various parties involved.