Construction industry is a major player in economy of any countries by generating employmentrnand wealth to the nations through its forward and backward linkages with other sectors. Howeverrnmany projects in developing countries experienced extremely high cost overrun, time slippage andrnlow quality. Problems of conditions of contract in the construction sector is one of the contributingrnfactor among other things. As a result domestic construction management and contractrnadministration practices lack the necessary quality to meet its standards.rnIn this respect, this study tries to identify shortfalls of the local construction conditions of contractrnin Ethiopia and to find out provisions that have negative implication for the development of thernsector. The research focuses on provisions related to Engineerâ€™s power, duty and responsibility;rnprice adjustment; termination; claim substantiation and dispute settlement procedures; conformityrnof selected clauses with Ethiopian law; understandability of contract forms and the practice ofrnconstruction management in general and contract administration in particular.rnThe data collection method integrated questionnaire survey, interview and desk study. Samples forrnthe study have been randomly selected from a clustered group of public employers, domesticrnconsultants, and domestic contractors who are actively participating on construction works. In thisrnthesis, a descriptive and inferential statistical analysis method has been used. Interpretation andrndiscussions were made on the basis of results from the analysis.rnThe study covered some selected contract provisions that have an implication to deprive therndevelopment of the construction sector. Accordingly the research comes up with the followingrnconclusions. To begin with the price adjustment clauses are not sufficient to compensate therncurrent soaring prices. Besides, termination is not exercised as per the contract provisions where asrnclaim substantiation and dispute resolution lack a balance of risk favoring the employer in mostrncases. In addition, another finding reveal that the civil procedure code Art. 315(2) hindersrnarbitration practices for administrative contracts. Some concepts such as experienced contractorrnneed to be expressed in a more clear and concise manner to reduce subjectivity. Furthermore, localrncontract forms lack suitability to manage construction projects efficiently. The research finallyrnconcludes that performance of the local construction sector, construction management and contractrnadministration practices do not meet the standards as stipulated in contract provisions. This studyrnfurther provides recommendations on how to improve the existing prevailing situations of the localrnconstruction sector in general and construction management practices in particular.rnKey Words: Claims, Conditions of Contract, Construction Industry, Construction Management,rnConstruction Contracts, Contracts, Contract Administration, Contract Forms, Dispute Resolution,rnPrice Adjustment, Termination