This study was conducted during the period from January to April 2018. The method of the study was literature survey from different sources. The purpose of the study was to investigate the causes and effects of disputes on construction projects. The disputes in construction projects are inevitable throughout the world. However, the extent of disputes is more in developing countries like Nepal as compared to others. The study found that disputes are increasing in the construction industries due to its uncertainty, complexity, and involvement of different categories of project participants. The lack of information in the construction industries leads to many disputes during the construction process. Disputes predominantly arise from complexity and magnitude of works, multiple prime contracting parties, poorly prepared contract documents, inadequate planning, financial issues and communicating problem. If disputes are not resolved promptly, then it tends to drag on, escalate and can cause project delays, lead to claims, require litigation proceedings for resolution and ultimately destroy business relationships. Ultimately, it may degrade the quality of the work.
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