Question

Risk allocation associated with performing a contract is typically accomplished by attaching an event, known as a _____, which must occur before a particular performance obligation is triggered.

Answer 1

Answer: condition

Explanation: while most business owners understand risks as a part of the construction process that cannot be eliminated, risk allocation helps with identifying such risks and determining how and to what extent they should be shared in an efficient way. Risk allocation is typically accomplished by attaching some event that must occur before a particular performance obligation is triggered. This event is called a condition which is of two types—condition precedent (an event that must occur before performance under a contract is due) and a condition subsequent (an event that occurs after the performance under the contract and discharges the parties obligations).

Answer 2

Condition

Step-by-step explanation:

Risk allocation is the process of recognising risk and determining how and to what extent they should be shared. A lot of owners understand that risk is an essential part of the construction process and cannot be removed.

Risk allocation can occur in any situation where more than one party is responsible for the implementation of a project. Making sure that every risk is identified and managed is a very good practice in any project.