The construction industry is regarded not only as a backbone of the nation’s economy but also as an integral indicator of its efficiency and effectiveness. However, as a result of the risks and complexities that are naturally inherent with construction projects as well as the diverging interests of the parties involved, claims and disputes could be considered an unavoidable consequence of the construction processes. In fact, over the years, the frequency and severity of claims and disputes have significantly increased to the extent that the estimated total annual cost of construction conflicts and disputes in the U.S. is $5 billion. That said, the main goal of this dissertation was to develop an integrated and coherent methodology for mitigation of construction disputes through both, multi agent based simulation concepts and risk management modeling principles. In this regard, the associated work carried out under this research has: (1) developed an innovative method for using logical induction decision support in construction claims and disputes; (2) created a multi agent system for construction dispute resolution (MAS-COR) that will simulate legal discourse in construction disputes; (3) developed a new method for addressing the issue of risks in the construction industry using portfolio insurance; and (4) created an innovative way for mitigating negative effects of contractor’s construction claims and disputes using a risk retention approach. It is conjectured that the attainment of the aforementioned objectives, as detailed under this dissertation, would mitigate the negative effects of claims and disputes in the construction industry and thus, have a positive impact on the contracting parties, their projects, the construction industry as a whole, and consequently, the nation’s economy.