Construction Law

Exclusion clauses in your terms and conditions could save your business, reports Thomas Eggar LLP senior associate Kim Teichmann. In Allen Fabrications Limited v ASD Limited the defendant avoided a £7m claim due to a term that limited its liability to £705. A large saving for such a little clause! …

The importance of terms and conditionsRead More »

By Dr. Chandana Jayalath

The term construction contract involves not only contractors and employers but also consultants from different disciplines, sub contractors, investors, insurers, bankers, and so on. The international nature lies in both the facts that the parties come from different countries and so is the source of supply of works, goods and services. The forms of contract also differ upon for whom the work is being carried out. …

Why Multi-Party Arbitration Should Have a Satisfactory Regime in International ConstructionRead More »

By Dr. Chandana Jayalath

The whole idea of interpretation is to dig out the intention of the parties had in their minds at the time they entered into the contract. There are rules of interpretation that have been based on common sense connected with the ordinary life. It is the philosophy of language that provides material for interpretation. In contract law, it is now well-established that the context is important in interpreting documents, which is often referred to by the label ‘matrix of facts’, ‘surrounding circumstances’, or ‘factual background’. Courts must place itself in thought in the same position as the parties to the contract were placed, in fact, when they made it. Accordingly, those involved in contract interpretation should not try to make a bargain for the parties, but instead seek to understand what the parties meant by reference to the words which they chose. …

Limitations and Hypothesis Underlying the Use of Interpretation Rules in Construction Contracts RevisitedRead More »

By Dr. Chandana Jayalath

Suspension usually occurs on a construction project when an employer requires a contractor to temporarily stop work on all or a portion of the project. Contractually, the contractor shall suspend the progress on the engineer’s written notice if it is only provided for in the contract, due to contractor’s default, due to climatic conditions, on safety reasons, necessary for proper execution of work or in excepted risks. A mandatory requirement is cast on the contractor to give a written notice of his intension to claim for any additional cost or time within a specified period from the date of receiving the engineer’s order to suspend the work. This clause specifically permits the engineer to authorize extension of time or payment of extra cost, whose decision is final and binding. …

Dealing with Suspension ClaimsRead More »

By Dr. Chandana Jayalath

The topicality of claims has been accentuated by the fact that contractors keep chasing extras, and clients keep pursuing cost savings, particularly in lump sum contracts where the majority has been locked into. The trend is that claims specialists are reported mobilize on such contracts even before construction commences, to locate loopholes in the documentation and look for lapses in the process of contract administration that will altogether facilitate ‘juicy’ claims. This situation has jerked the entire Gulf region into awareness on the importance of good contract administration and the supreme importance of documentation. …

Dealing with Construction Claims – the Gulf WayRead More »

By Dr. Chandana Jayalath

Any standard form of contract is a generic product applicable under ‘typical’ circumstances subject to amendments in the Particular Application section in order to cater locally specific project requirements where necessary. Importantly, the Contractors therefore recognize the differences and know how to act upon those amendments in the contract. All in all, everyone ‘knows the deal’ if presented with a standard form. The other significant advantage is that the wording of many standard forms has been subject to interpretation over the years by courts. But at least with standard forms both employers and contractors know roughly where they are standing. There are always those who wish to go down the bespoke route but even in bespoke contracts there are vast chunks of texts copied straightway from standard forms. Even though on most occasions what the standard form gives with one hand the amendments take back with the other. …

Amendment, Deletion or Silence – Which One is Better?Read More »

By Dr. Chandana Jayalath

It is common practice that time extension claim comes before the claim on prolongation costs. Once an extension of time has been granted, the evaluation of the additional prolongation costs is often related to the period between the contract completion date and the extended completion date. Prolongation cost is also calculated on time related preliminaries. The author contends that this line of thinking is illogical. …

Claims on Prolongation CostsRead More »