Fair settlement of contractual claims requires cooperation and communication between the parties. It also requires the contract to provide a clear statement of risks and a mechanism for dealing fairly with associated cost and time effects. A significant proportion of claims in the construction industry relates to the incidence of delays, disruptions and other variations which have cost and time implications. Existing project models fail to reflect the interactive link between cost and time in construction contracts. This failure leads to an unsystematic evaluation of the effects of change, and frequently, to bitter disputes. There is an urgent need for a simple model integrating time and cost within the contract so that the cost and time effects of variations, delays and disruptions can be systematically and objectively analysed.