The effectiveness of a project’s communication system largely determines its success, in a way that improves team collaboration and affects quality, time and cost of a project. This thesis describes the factors that influence communication, as well as the ways in which it takes place in construction projects. The first part of the thesis refers to communication in general, while the second part explains the factors that affect the interpersonal, group and organizational communication of project participants and the mediums used to transmit information in the construction project. The role of the project manager is particularly emphasized here. In the research mentioned in the thesis, project manager proved to be the person most involved in communication and is responsible for its creation and control during the project. The third part of the thesis explains principal-agent theory and its examples in construction projects. Examples are described through four scientific studies of projects in the world. Based on them, a research of a project in Croatia was made. Researches showed how agency risks adversely affect communication and project success. The most commonly used mechanisms to reduce the impact of agency risks are: trust, reputation, contracts, incentives, information systems and corporative culture.