200 Contractual Problems and their Solutions

200 Contractual Problems and their Solutions

Contents

Foreword

Preface

Chapter 1: Procurement

1.1. What are ‘entire contracts’ and how relevant are they in the construction industry?

1.2. Do projects where the parties enter into partnership arrangements require a formal contract to be agreed?

1.3. What is the effect of an agreement to undertake work which is expressed as being ‘Subject to Contract’?

1.4. What is Two-Stage Tendering and how does it operate?

1.5. Where tender enquiry documents indicate that an established...

1.6. What liability does a tendering contractor have who in its bid names key personnel...

1.7. Can a contract which is freely entered into by the parties not be enforced on the...

1.8. Can an architect or engineer be held to have acted negligently for advising a client to...

1.9. Where an unsuccessful tenderer is prevented from adjusting its tender after it has been...

1.10. What is the difference between Management Contracting and Construction Management?

1.11. A public sector project is advertised and tenders invited. Within the advertisement, it is...

Chapter 2: Tenders and Bidding

2.1. What is meant by the Battle of the Forms?

2.2. If a tender which contains an error is accepted in full knowledge of the error, has the tenderer any redress?

2.3. Where a contractor or subcontractor submits a tender with its own conditions of contract...

2.4. The submission of an unambiguous quotation which receives an unconditional acceptance can...

2.5. Where an employer includes with the tender enquiry documents a site survey which proves...

2.6. If, after tenders have been received, the employer decides not to proceed with the work...

2.7. What is a tender contract and will it assist a contractor/subcontractor who submits...

2.8. If an architect/engineer, acting as employer’s agent in a Design and Construct contract...

2.9. Does an employer have any liability for not sending a subsoil survey which is in his possession...

2.10. If a subcontractor submits a lump sum estimate to a contractor to carry out the subcontract work...

2.11. Where a tender enquiry requires tenders to remain open for acceptance for a specific period...

Chapter 3: Design

3.1. What is the difference between a f?itness for purpose responsibility and an obligation to exercise...

3.2. Where a contractor/subcontractor’s drawings are ‘approved’, ‘checked’, ‘inspected’, etc. by...

3.3. Who is responsible for co-ordinating design? Can a main contractor be legitimately given this...

3.4. Can a contractor be held responsible for a design error where the employer appoints an architect...

3.5 Can a main contractor be responsible if a nominated/named subcontractor’s design is defective?

3.6. Must a contractor notify an architect/engineer of defects in his design?

3.7. Where an architect/engineer includes a new product in his design following advice from a...

3.8. Where an architect/engineer is required by the conditions of the contract to approve, or accepts...

3.9. Where is the line to be drawn between an architect/engineer’s duty to design the works or a...

3.10. Where an item of work has been properly provided for in the Employer’s Requirements but is...

3.11. Is the contractor entitled to payment for design in full when the design work has been completed...

3.12. On a design and construct project, where the architect is novated from the employer to the contractor...

Chapter 4: Letters of Intent

4.1. Mr Justice Clarke, in the case of RTS Flexible Systems Ltd v. Molkerei Alios Muller (2010)...

4.2. What risk is a contractor taking if it receives a letter of intent which places a cap on expenditure...

4.3. When work is undertaken in accordance with a letter of intent without a contract being entered...

4.4. Under what circumstances, if any, could a letter of intent be regarded as a concluded contract?

4.5. What are the advantages and disadvantages to an employer and contractor in work being...

4.6. Could an architect, engineer or project manager be negligent for recommending to an employer...

Chapter 5: Programme

5.1. Where a contractor submits a programme which is approved or accepted by the architect/engineer...

5.2. Is a subcontractor obliged to follow a main contractor’s programme?

5.3. Who owns f?loat time in the contractor’s programme, the architect/engineer or the contractor?

5.4. What is the effect of making the programme a contract document?

Chapter 6: Delays and Delay Analysis

6.1. If work is delayed due to two or more competing causes of delay, often referred to as concurrent...

6.2. Will a claim for an extension of time and the recovery of loss and expense which does not...

6.3. What is meant by a contractor or subcontractor having to ‘use constantly his best endeavours...

6.4. What is meant by ‘Time is of the Essence’?

6.5. Where delays to completion of the works have occurred and disputes arise as to the appropriate...

Chapter 7: Extensions of Time

7.1. Does a contractor or subcontractor lose entitlements to extensions of time if he fails to...

7.2. What is the Prevention Principle – does it provide a contractor with assistance in avoiding...

7.3. Are minutes of site meetings considered by the courts to be adequate notices of delay...

7.4. Can an architect/engineer grant an extension of time after the date for completion has passed?

7.5. If the architect/engineer issues a variation after the extended completion date but before practical...

7.6. When an architect/engineer is considering a contractor’s application for an extension of time...

7.7. Where a contractor’s progress is behind programme, will he be entitled to an extension of...

7.8. Some standard forms of contract, such as the JCT contracts, provide for extensions of time...

Chapter 8: Liquidated/Delay Damages

8.1. What is the difference between liquidated damages and a penalty?

8.2. If the employer suffers no loss as a result of a contractor’s delay to completion, is he still...

8.3. If a delay is caused by the employer for which there is no specific entitlement to an extension...

8.4. Are liquidated damages which are calculated using a formula or based upon a percentage...

8.5. If the architect or engineer fails to grant an extension of time within a timescale laid down...

8.6. If the contractor delays completion but no effective noncompletion certificate is issued by...

8.7. Can a subcontractor who f?inishes late have passed down to him liquidated damages f?ixed...

8.8. What is meant by ‘time at large’? How does it affect the employer’s entitlement to levy...

8.9. Can a contractor challenge the liquidated damages f?igure included in a contract as being a...

8.10. If liquidated damages to be enforceable must be a reasonable pre-estimate of loss...

8.11. If liquidated damages become unenforceable and hence an entitlement...

8.12. Where a contract includes a single liquidated damages amount for failing to complete the...

8.13. Is it possible to include in a subcontract an all-embracing sum for liquidated and ascertained...

8.14. Are liquidated damages payable in respect of delays which occur after a contractor’s...

8.15. What are the problems associated with applying liquidated damages where provision...

8.16. Do liquidated damages provide a complete remedy for delays to a contract?

Chapter 9: Variations

9.1. Where a contractor/subcontractor submits a quotation for extra work which is accepted...

9.2. Can a contractor/subcontractor be forced to carry out a variation after practical completion?

9.3. Where work is omitted from the contract by way of a variation, can a contractor or subcontractor...

9.4. Where work is omitted from a contract and given to another contractor to carry out, is there a...

9.5. Where, due to a variation, a contractor has to cancel an order for the supply of material...

9.6. How are ‘fair’ rates defined?

9.7. When do quantum meruit claims arise and how should they be evaluated?

9.8. Can the issue of a variation to the work ever have the effect of creating a separate or replacement contract?

Chapter 10: Loss and Expense/Additional Cost

10.1. Where a contractor/subcontractor is granted an extension of time, is there an automatic...

10.2. Where a contractor/subcontractor successfully levies a claim against an employer for...

10.3. Will a contractor or subcontractor substantially prejudice its case for additional...

10.4. When a contractor/subcontractor, with regard to a claim for loss and expense or...

10.5. With a programme shorter than the contract period, can the...

10.6. Where a contractor submits a programme which is accepted or approved, showing...

10.7. Is a contractor/subcontractor entitled to recover the cost of preparing a claim?

10.8. Will the courts enforce claims for head office overheads based upon the Hudson...

10.9. Where a delay to completion for late issue of information has been recognised...

10.10. Once it is established that additional payment is due for prolongation...

10.11. When ascertaining contractors’ claims on behalf of employers, how should consultants...

10.12. Is a contractor/subcontractor entitled to be paid loss of profit as part of his monetary claim?

10.13. Is a contractor/subcontractor entitled to be paid acceleration costs as...

10.14. Where a written claims notice is required to be submitted within a reasonable time...

10.15. What methods of evaluating disruption have been accepted by...

10.16. Can a claims consultant be liable for incorrect advice?

10.17. If a delay in the early part of a contract caused by the architect/engineer pushes...

10.18. Who is responsible for the additional costs and delay resulting from unforeseen...

10.19. Where one party to a contract is in breach and the injured party incurs loss...

10.20. What is meant in legal terms by the words ‘consequential loss’?

10.21. Is it possible to include in a contract a daily or weekly rate which will be paid to...

Chapter 11: Payment

11.1. Where a contract requires the contractor to give a guaranteed maximum...

11.2. Where a subcontract provides for 2.5% cash discount, does this mean...

11.3. Under what circumstances are contractors/subcontractors entitled...

11.4. Can a contractor force an employer to set aside retention money in a separate bank account?

11.5. If an employer becomes insolvent, what liability does the contractor...

11.6. Can a contractor/subcontractor legitimately walk off site if payment is not made when due?

11.7. Where a contractor undertakes work which he considers should be paid for on...

11.8. Can an architect/engineer sign a daywork sheet and then refuse to certify...

11.9. Where a contractor/subcontractor includes an unrealistically low rate in the...

11.10. Can a debtor enforce acceptance of a lesser sum in full and f?inal settlement?

11.11. How can subcontractors avoid ‘pay when paid’ clauses?

11.12. Once the value of a contractor/subcontractor’s work has been certified and...

11.13. Can a contractor deduct claims for overpayments levied on one contract...

11.14. When a contractor completes significantly early, may the architect/engineer...

11.15. Where an architect/engineer undercertifies, is the contractor/subcontractor entitled to claim interest?

11.16. Can an architect/engineer refuse to include an amount of money in a certificate in...

11.17. Can an employer refuse to honour an architect/engineer’s certificate on the...

11.18. Where a cheque is issued in respect of construction work undertaken, can it...

11.19. Where agreement is reached whereby one party to a construction contract...

11.20. Are there any circumstances when a standard form of construction contract...

11.21. What is a project bank account and how do the advantages compare with the disadvantages?

11.22. What is the difference between set-off and abatement?

11.23. Where a contract requires the contractor to provide information for use...

11.24. Where a party to a construction contract is due to make a payment to the...

11.25. Where payment is made late, is there a legal entitlement to claim interest?

11.26. Where, under a JCT contract, an interim payment is due to be made to the...

11.27. Architects, engineers and quantity surveyors are often required to provide...

11.28. Where money remains unpaid, is the service of a statutory demand and a...

11.29. Where a claim is made by a subcontractor against a main contractor...

11.30. Can a contractor or subcontractor refuse to commence work until satisfactory...

Chapter 12: Practical Completion and Defects

12.1. How are practical completion and substantial completion under the JCT and ICE conditions defined?

12.2. Where an employer takes possession of a building or engineering facility before all the...

12.3. When does practical completion occur under a JCT Standard Form of Building Subcontract?

12.4. Where at the end of the defects liability/rectification period/maintenance period...

12.5. Is a contractor/subcontractor absolved from any liability if the employer...

12.6. Most subcontracts provide for the release of the f?inalbalance of retention only...

12.7. Can an employer recover from the contractor the costs involved...

12.8. Where a dispute arises between employer and contractor which...

12.9. What is the difference between patent defects and latent defects?

12.10. Are there any circumstances where a quantity surveyor could be...

12.10. Are there any circumstances where a quantity surveyor could be...

12.11. Work has been completed and defects in the contractor’s...

Chapter 13: Rights and Remedies

13.1. Where a contract requires the parties to act in good faith...

13.2. What obligation does a contractor, subcontractor or supplier have...

13.3. Is there an unfettered power to reject work given...

13.4. If an estimate prepared by an engineer or quantity surveyor proves...

13.5. When defects come to light after the architect/engineer has issued...

13.6. Who is responsible if damage is caused to a subcontractor’s...

13.7. How is the term ‘regularly and diligently’, as used in the standard...

13.8. Are there any circumstances under which a...

13.9. What is a contractor’s liability to the employer for failing...

13.10. Do retention of title clauses still protect a supplier or...

13.11. Can the signing of time sheets which make reference to standard...

13.12. Can suppliers rely upon exclusion clauses in their terms...

13.13. What level of supervision must an architect provide on site?

13.14. Where a specification includes a named supplier ‘or other...

13.15. If a subcontractor is falling behind programme and in danger...

13.16. Can parties to a dispute be forced to submit the matter to mediation?

13.17. Do contractors, subcontractors, architects or engineers who have...

13.18. Parties to a dispute often make offers to settle which are stated to...

13.19. Where a contractor takes over work which is part completed...

13.20. Where a contract requires a notification to be in writing, sent...

13.21. Where an engineer is employed by the employer, is he legally...

13.23. What are the legal responsibilities of a project manager?

13.24. Are project managers, when performing duties relating to the

13.25. Can a quantity surveyor who is employed by the employer be

13.26. Can an architect who recommends a contractor...

Chapter 14: Adjudication

14.1. Will an adjudicator’s decision be enforced by the courts?

14.2. Will a court enforce part only of an adjudicator’s award?

14.3. When can it be said that a dispute has arisen which gives rise to an...

14.4. To comply with the Construction Act 1996 and be subject to...

14.5. Can a dispute concerning oral amendments to a construction contract be referred to adjudication?

14.6. Where a mediator is appointed in relation to a dispute in...

14.7. Will a court enforce an adjudicator’s award which is clearly wrong?

14.8. If a dispute is the subject of ongoing litigation, can one...

14.9. Can an adjudicator withhold a decision from the parties until his fees are paid?

14.10. If an adjudicator issues a decision late, can it be enforced?

14.11. The Construction Act states that ‘a party to a construction...

14.12. Where a compromise agreement relating to a dispute...

14.13. A matter in dispute can only be referred to adjudication...

14.14. Will a clause in a construction contract which states that all...

14.15. Are the parties entitled to challenge an adjudicator’s fees on the grounds that they are unreasonably high?

14.16. Does a draft adjudicator’s decision constitute a f?inal decision?

14.17. Does an adjudicator who communicates with one party without...

14.18. Can an adjudicator employ the services of an expert to assist in making a decision?

14.19. Where an adjudicator seeks legal advice to assist him in reaching a...

14.20. Have the courts laid down any general guidelines as to how...

14.21. Where an adjudicator issues a decision involving the payment...

14.22. Where an adjudicator’s decision provides for a sum of money...

14.23. Can a party to a construction contract who is reluctant to have...

14.24. Can the party that is successful in adjudication recover its costs from the losing party?

14.25. Where a contractor includes in its subcontract terms a clause...

14.26. It has been argued that adjudication in accordance with the...

14.27. Where one party claims that the adjudicator has no jurisdiction...

14.28. What happens if the adjudication provisions as set out in the...

14.29. Is it possible for a Referring Party to restrict or exclude part of the...

14.30. Can a losing party refuse to comply with an adjudicator’s decision on the grounds that the Referral Notice was served late?

14.31. Section 105(1) of the Housing Grants, Construction and...

Table of Cases

Index