Construction Law Report - Essay Example

CONSTRUCTION LAW REPORT by Unit Introduction Construction law pertains to the branch of law, which deals with aspects pertinent to building and construction, engineering and other associate fields. Thus, in essence, construction Law is a fusion of commercial, employment, planning and contract laws, as well as tort. It hence covers a wide array of legal issues inclusive of negligence, contract, guarantees and sureties, bonds and bonding, liens and other associate security interests, related consultancy contracts and tendering (Koffman & MacDonald 2007). Delays in construction result in a loss of time and money for people. It creates inconveniences that are not expected to occur and because of these reasons, such delays need to be compensated. In the UK, such delays are covered under the construction law. However, the underlying issues must be defined in contract terms so that delay claims can be made. The report will aim at analyzing the contractual remedies and practical solutions, which may be available to the project team in the event of a substantial delay caused. Contract law: Legal and Procedural Implications Invariably, the presence of the discovered iron anvils projects upon the overall construction work schedule in terms of projected period, cost implications and required work force. Adding to this is the projected influence upon contractual terms of agreement, represented in the form of signed binding agreements amongst pertinent project stakeholders. As Martin and Law (2006) elude, this would necessitate legal input from construction law, and specifically contract law. It is based upon the fact that construction law legally requires both project owner and contractor to act in good faith, with regard to performance of project contractual obligations (Martin & Law 2006). According to the contract – JCT SBC 2011 (with quantities without sectional completions) – terms and conditions are set upon the basis of construction-time frame, expenditure (estimated overhead) and aspects pertaining to workforce present (Martin & Law 2006). Contractor Obligations The constructor’s obligations with respect to the time for completion of works under the construction contract depends on express provisions stipulated in the contract or, in cases where the terms are not express, then the obligations will be based on terms implied by the English law and in other instances the terms implied for business efficacy purposes. Construction contracts often provide for the payment of liquidated damages for certain types of breach, for example breaches concerning delays. The inclusion of clauses on liquidated clauses of the delay nature has advantages for all parties on the contract (Smith, 2011:1). Construction Law: Contractual Agreements Although there is no requirement for specific contract formalities, it is normal practice to legally utilize standard-form contracts i.e. the JCT form in England, the U.K., as portrayed by Born (2009). Accordingly, in order to adequately expedite resolution of disputes, such standard forms are essential in providing grounds for arbitration. This is usually carried out by either a professional arbitrator (individually), or by a ‘board(s) of arbitration.’ Within the public domain, construction law continues being affected by requirements that are inclusive of surety bonds, as well as other pertinent procedures. Conversely, within the private domain (as is the case at hand), the pertinent contractual requirements are usually negotiated between project parties/ stakeholders (Born 2009: Mitchell 2013). As of the year 2000, principles pertinent to construction law had been well established. Accordingly, legal remedies as provided by existing jurisprudence for such issues as breach of contract continue being similar to those found within ordinary legal interpretation. In such contexts, pertinent legal remedies are inclusive of repudiation, damages, specific performance and rescission (Koffman & MacDonald 2007). This is as set out in the various pertinent Clauses as found in the JCT Standard Building Contract 2011. A variety of clauses are essential in dealing with issues that would potentially arise, in terms of delays, problem solving, sorting of time issues, effective carrying out of the work and cost-implications because of the delay amongst other influences (Bailey, 2013:505: Haar & Haar, 2010:81: Ndekugri, 2014: Pickavance, 2014:216). Project Completion: Potential Case Scenarios Iron Anvils With regard to the construction at hand, as presented in the – JCT SBC 2011 (with quantities without sectional completions) – contract, the discovered iron anvils would require excavation and complete removal if the project was to commence. This would necessarily result in delay that invariably would necessitate presentation of notices on delay. This would subsequently necessitate deviation, as the best and most optimal choice of action/ procedure. As per prevailing construction laws, when a certain plan which has been adopted for a given building/ site, and during the work process a change from the original plan is viewed as necessary, then there is need for deviation or rescission (Craig, Park & Paulsson 2001). As portrayed by McKendrick (2005), in accordance with the contractual terms of agreement, the presence of the iron anvils necessitates either deviation or a complete change of contractual terms of agreement. An entitlement to an extension of time is provided, as set out in the JCT Standard Building Contract 2011, clause 2.27.1 and 2.28. Accordingly, there is provision of a notice of the extension of time in the event the work is to be more likely delayed. This is based upon the contractor’s provision of a Master Program, as founded on clause 2.9. Importantly, is that Contractual Particulars (1.9.1.2) present an option to choose a variety of critical paths as alternative best options (McKendrick 2005). Deviation option Under the option of deviation, the existing contract - JCT SBC 2011 (with quantities without sectional completions) would require tracing as far back as possible. The subsequent additions, presumably due to the need for extraction of the iron anvils, will be paid for as portrayed in the contract, according to the standard charging rate (Mitchell 2013). The English law approach provides for an extension of time, if a relevant event is proven to occur, with the contractor being prima facie entitled to extension of time. Extension of time in turn necessitates deviation, which invariably affects cost-expenditure ‘overheads’ and ultimately the Master Program (Adriaanse 2010). The master programme As good practice, provision of the Master Programme from the onset aids in efficient management of building and construction. Accordingly, a properly prepared good ‘as planned’ programme provides a basis on which any delaying events may be considered. This is in relation to the need for entitlement of time extension, pursuant to clause 2.28. While under such contractual agreements there are no sanctions, as presented in NEC3, it is beneficial for the contractor to aptly comply with existing provisions. This is aimed at avoiding unnecessary disputes, as well as unnecessary future payments in the form of damages. It further aids the contractor in terms of compliance with clause 2.9.2 that requires either revision or amendment of the programme to be presented (Koffman & MacDonald 2007). Compliance to the clause Compliance with the clause thus takes into account any existing decisions or agreements in respect to the issue of time. The presence of the iron anvils necessitates either deviation or the rescission of the whole project as portrayed in the construction specifics. In addition, a potential outcome may be arbitration because of the client’s preference to seeking a court ruling on the aspect of specific performance as Randy (2003) portrays. This pertains to a court order that requires pertinent parties to a contract to perform accordingly, with regard to a specific act as stipulated in the contract. The client may insist that according to the terms and conditions applicable to his/ her part, the discovery of the anvil irons would invariably affect the contractual agreement, thereby affecting the concerned input. Legal aspects surrounding the contractor On the other hand, the contractor is also legally viable to prove his case of increased cost- and resource-implications, thereby being unable to optimally conclude construction as per the prevailing contractual terms of agreement (Randy 2003: Wilmot et al 2009). Under such case scenarios, the JCT standard form aptly presents provisions concerning: Dates of Possession of Site; Dates of Possession of Sections; Date for Completion of the Works; Deferment of Possession of Sections, and Deferment of Possession of the Site. Accordingly, in the event that possession is deferred, as is most likely to occur under the case scenario under study, the contractor is entitled to an extension of time (Wilmot et al 2009). This is based upon provisions under clause 2.29.3, as well as clause 4.23, which aptly considers issues related to increased expenses and/ or loss. As presented by McKendrick (2005), his would in turn necessitate appropriate re-adjustment of the date for completion of the works provisions, pursuant to the Adjustment of Completion Date, clause 2.26. By providing a revised appropriate ‘as planned’ programme, with both requisite notices and potential delay impacts, pursuant to clause 2.27, the contractor can be able to aptly deal with the issue of extending/ revising the completion date, pursuant to clause 2.28. The aim is to adequately prevent the contractor from being culpable for expected delays, which would invariably lead to a risk of sustaining deductions, in regard to liquidated damages as provided in clause 2.32 (McKendrick 2005). Conclusion Construction law, therefore, governs issues affecting various stakeholders involved within pertinent construction processes i.e. surveyors, builders, architects, engineers, financial institutions, planners and construction workers. The fact is that the iron anvils cannot be within range of the sensitive equipment. In cases of delays, JCT 2011 clauses such as clause 2.26, 2.27 and 2.28 help, address the legal concerns as explained above. The Private Finance Initiative (PFI) in United Kingdom has had many effects on the terms of the contract under which the contraction works are let. Under clause 41 of the NHSPFI, contract delays are defined as events that cause an unprecedented lengthening of the time taken to complete construction works. In broad terms, the delay relates to actions by the trust that both time and money can be awarded to in addition to the neutral events, for instance force majeure. Force majeure and Relief Events are considered natural and because of that, they cannot be compensated. However, the extension of time can be compensated. The notice procedure and requirements for provision of information are similar to those found in engineering contracts. However, a distinction must be drawn between relief events and compensation events. Thus, the options available are deviation (the most preferred option) or abandonment of the project that would necessitate the rescission of the contract that is legally binding. Advice to the client would be to consider diversion, and adequately readjusting the contractual terms and conditions/ agreements. Reference List Adriaanse, John 2010, Construction Contract Law: The Essentials, (3rd Ed.), Palgrave Macmillan. Bailey, J 2011, Construction law. London: Informa Law. Born, Gary 2009, International Commercial Arbitration, Kluwer. Craig, WL, Park, W & Paulsson, W 2001, International Chamber of Commerce: Arbitration, London, Oxford University Press. Haar, R., & Haar, C. (2010). Remedies in construction law. London: Informa Law. Koffman, L & MacDonald, E 2007, The Law of Contract. London: Oxford University Press. Martin, E & Law, J 2006, Oxford Dictionary of Law, (6th Ed.), London: Oxford University Press. McKendrick, Ewan 2005, Contract Law - Text, Cases and Materials, Oxford University Press. Mitchell, C 2013, Hayton and Mitchells Commentary and Cases on the Law of Trusts and Equitable Remedies (13th Ed.), Sweet & Maxwell. Ndekugri, I. (2014). JCT98 Building Contract: Law and Administration. Routledge. O’Sullivan, D, Steven E & Rafal, Z 2008, The Law of Rescission, oxford University Press. Pickavance, K. (2014). Construction law and management. London: Informa. Randy E Barnett, 2003, Contracts, Aspen Publishers. Smith, H 2011, Remedies for Delay in Construction Contracts. Construction dispute avoidance newsletter, No 33. Wilmot et al, 2009, Contract Law, (3rd Ed.), Oxford University Press. Read More