Risk misallocation has been a topic of discussion in the extent literature for some time now. The literature points out that risk management is the key to ensuring that optimal risk allocation is achieved. While the focus on risk allocation has been about the party best suited to carry a given risk, the issue of how misallocation occurs is rarely dealt with. This paper modeled how risk misallocation can result from contract practice. This was done through a literature review and 15 purposive heterogeneous semi-structured interviews conducted with clients, project managers, architects, engineers and quantity surveyors in the Zambian building sector. The derived model suggests that misallocation could result from inappropriate selection of risk mitigation mechanisms provided for in the contract, poor selection of contracts and use of inappropriate procurement routes. These findings advance knowledge that necessitates the allocation of risk appropriately as the areas of contract practice and risk management are rarely researched with regards to risk misallocation.
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