Your Complete Resource for Construction Law & Contract Management

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 »

By Dr. Chandana Jayalath

Majority of construction contracts in the Gulf region maintain the principle features of the FIDIC forms of contract, yet there are many subtle changes from the FIDIC forms of contract. These changes will eventually imbalance the even risk allocation between the parties. Many contracts drafted in one sided language biased towards the clients are a result of cut and paste exercise, for instance, sometimes; there is no provision for price escalation and variations exceeding 10 or 15 per cent. The message to contractors entering into contracts on the basis of these forms is to review them very carefully without being fooled into thinking they are simply the FIDIC versions. …

Understanding the Generality of Variation Clauses and the Variety of Broad Interpretation that Exists under FIDIC Based Contract Modalities in GulfRead More »

By MARTIN PRESTON
The UAE Civil Code governs construction (and other) contracts entered into in the UAE. As such, unlike in a common law system where, subject to certain statutory exceptions, the parties are free to agree to the content of their contract, the UAE Civil Code imports a number of requirements into construction contracts. …

Key issues of UAE construction lawRead More »

1. The Readers of this journal must be very familiar with the phase “pay when paid”. From time to time, it has been raised by main contractors as a defence for not paying its sub-contractors. A classic “pay when paid” clause is found in clause 11(b) of the Standard Form of Sub-Contract for use when the sub-contractor is nominated under the Standard Form of Building Contract drawn up by The Hong Kong Institute of Architects, The Royal Institution of Chartered Surveyors (Hong Kong Branch) and The Society of Builders, Hong Kong (commonly known as the “Green Form”). …

Pay When Paid: What does it mean?Read More »

By Dr. Chandana Jayalath

A contractor’s overheads are normally covered by the income of the business as a whole and, where the completion of one contract is delayed, the contractor may claim to have suffered a loss arising from the diminution of the income from the contract and hence, the turnover of the business; but the general running costs of his business continue to be expended. Were it not for the delay, the contractor’s workforce would have had the opportunity of being employed on another contract, with the result that it would have contributed towards the overhead costs during the overrun period. Also, if he can show that the staff, who would otherwise have been gainfully employed, had to devote time to dealing with the disruption or delay, he may have a claim for that too. …

Recovery of Unabsorbed Head Office Overheads in a Contract ProlongationRead More »

By Dr. Chandana Jayalath

Whenever variations are ordered that omit work, and particularly if such omissions are substantial in nature, contractors often argue that they should be entitled to claim the loss of profit that they would have earned on such works. …

Claims for Loss of Profit on Omitted WorksRead More »

By Dr. Chandana Jayalath

Termination occurs when the employer instructs a contractor to permanently stop the performance of work and leave the site. Construction contracts specify each party’s rights, obligations, and remedies for termination. Termination on construction projects often results in claims and disputes; therefore, the decision to proceed with this option should not be taken lightly. …

Termination Claims in NutshellRead More »