Contract Administration

by Sarah Thomas

In this, the second of my New Year updates, I would like to discuss two interesting cases which have recently been decided by the UK courts. The first is the UK Court of Appeal upholding of a first instance judgment and the comments that the Court made on the recoverability of damages under English contract law.

The case is Supershield Limited v Siemens Building Technologies FE Ltd. As a reminder, the basic test under English law is that a party will recover losses flowing from the breach that (i) arise naturally, in the usual course of things, or (ii) are losses which the parties may reasonably be taken to have contemplated when entering into the contract (the “Hadley v. Baxendale” test, often known as the “remoteness” test). A previous recent development of this area resulted from the House of Lord’s decision in the Achilleas case which suggests that a defendant will not be liable for losses — even those which are not unusual and therefore potentially not too “remote” — which he cannot reasonably be regarded as having assumed responsibility for.

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New decade, new development of the remoteness ruleRead More »

by Sarah Thomas

Question:
I am a project manager for the employer on a power plant project based in Europe. We have been on quite good terms with the contractor up until now. Last week the contractor sent us a claim for 12 weeks’ delay to the programme and for compensation costs (we are using the FIDIC Yellow Book (Plant and Design Build) 1999 form and English governing law). They are saying that dealing with contamination in the ground discovered in the last few weeks will cause a delay. We had a couple of site meetings with the contractor and sub-contractor about the programme and the potential delays, prior to the contractor sending the claim. I have two issues with the claim: firstly, we do not believe that the ground conditions will cause 12 weeks’ delay; our estimate would be closer to about 6 weeks. Secondly, the contractor’s written notice of claim is just a couple of lines in an email to me and I am not sure this counts as proper “notice”.
I do not want to jeopardise our relationship with the contractor, but obviously I am concerned to limit our exposure to any delay costs. I would appreciate any advice about how we can deal with this claim from our contractor.

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Construction ClaimsRead More »

by Hew Kian Heong

I bought a painting a couple of months ago which I really liked. I did not have a place to hang it at the time. The gallery owner was eager to make the sale and so agreed I could pick it up later when I had found a place to hang it. So I agreed a price with the gallery owner and paid her a 10% deposit. When I turned up to collect the painting recently, the gallery owner sheepishly asked if I could pay a little more for the painting. The reason she gave was that her landlord had increased her rent significantly and she was struggling to keep the gallery going. I had also driven a hard bargain on the price. I was a little annoyed by the request but agreed to pay 10% more as the gallery owner is a really nice lady and I knew it was true her landlord had increased her rent by a ridiculous amount.

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A fixed price may not always be fixed in ChinaRead More »

by John Bishop

There is a funny commercial that you can see when you take a taxi in Shanghai. You can view it on a video screen on the back of the front passenger seat. It features a foreign businessman getting into a taxi in Shanghai and telling the Chinese taxi driver the address of his destination. The taxi driver does not understand English and starts asking the passenger where he wants to go in Chinese which the passenger obviously does not understand. At this point, the taxi driver and passenger transform into a chicken and a duck and both are clucking and quacking away with neither understanding each other. The commercial is for a road directory service whereby a passenger can punch in an address on the video screen in English and the address in Chinese is announced to the taxi driver. I think the commercial is pretty neat, and is a play on a Chinese description of a situation where both parties lack a common language (literally translated as a chicken trying to talk to a duck).

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A chicken talking to a duck !Read More »

by Karina Chichkanova

In recent years St. Petersburg has earned a reputation as an investment center with numerous greenfield projects. Greenfield projects involving the construction of industrial and sports facilities, transportation infrastructure, and residential developments, are underway. In the auto industry alone, four assembly plants have been built recently or are under construction (Toyota, Hyundai, General Motors, Nissan), and component and parts suppliers have a number of greenfield projects in progress. St. Petersburg has also established a technical-innovational type special economic zone, where a number of greenfield projects relating to the creation of innovative products are underway.

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Practical Aspects of Greenfield Projects in St. PetersburgRead More »