Who assumes all financial risk when undertaking a new project?

The contractor assumes all financial risk when undertaking a new project because they are primarily responsible for the project's budget and overall execution. The contractor directly manages the resources, labor, and materials necessary to complete the project and typically enters into a contractual agreement with the client that outlines financial responsibilities, timelines, and performance expectations.

In this context, if the project goes over budget or faces unforeseen issues, the contractor is liable for those costs, which means they are taking on the financial risk. This responsibility includes managing any subcontractors and ensuring that their work is completed within the agreed financial framework. The risks can include fluctuations in material costs, labor disputes, or delays caused by various factors, all which the contractor must navigate to protect their financial interests and fulfill contracts. It is through this role that the contractor's assumption of risk is integral to the construction and project management process.