Construction industry is a major player in the economy of any country by generating employment and wealth to a nation through its forward and backward linkages with other sectors. However many construction in developing countries experience extremely high cost overrun, time slippage and low quality work. A problem of conditions of contract in the construction sector is one of the contributing factors among other. As a result domestic construction management and contract administration practices lack the necessary quality to meet its standards. In this respect, this study tries to identify shortfalls of the local construction conditions of contract in Ethiopia and determine provisions that have negative implication for the development of the sector. The research focuses on provisions related to price adjustment; termination; claim substantiation and dispute settlement procedures; conformity of selected clauses with Ethiopian law; understandability of contract forms and the practice of construction management in general and contract administration in particular. The data collection method integrated questionnaire survey, interview and desk study. Samples for the study have been randomly selected from a clustered group of public employers, domestic consultants, and domestic contractors who are actively participating on construction works. In this thesis, a descriptive and inferential statistical analysis method has been used. Interpretation and discussions were made on the basis of results from the analysis. The study covered selected contract provisions that expected to deprive the development of the construction sector. Accordingly the research comes up with the following conclusions: a) price adjustment clauses are not sufficient to compensate current soaring prices: b) termination is not exercised as per the contract provisions whereas claim substantiation and dispute resolution lack a balance of risk favoring the employer in most cases: c) civil procedure code Art. 315(2) hinders arbitration practices for administrative contracts: d) Some concepts such as experienced contractor needs to be expressed in a more clear and concise manner to reduce performance of the local construction sector, construction management and contract administration practices do not meet the standards as stipulated in contract provisions. This study provides recommendations on how to improve the existing prevailing situations of the local construction sector in general and construction management practices in particular.