Conflict Resolution Based on Construction Law - Case Study Example

A Report on Conflict Resolution between the Contractor and CA and the Employer Based on Construction Law Name Institutional Affiliation Table of Contents Introduction 3 Facts Surrounding the Conflict 3 Legal Basis upon which the Contractor will Base the Claim 4 Advice on Adjustment of Time or Adjustment of the Date of Completion 5 Principle of Variations and how it Affects Time Delay Conflict 7 Exceptionally Adverse Weather 7 Damages the Contractor Can Claim 8 Conclusion 8 Appendix 9 Notice of Adjudication Letter 9 References 10 Introduction This report is prepared by QS firm for legal services, on behalf of the contractor, for the establishment of an advice to be used in weighing the options and coming up with valid claims on how to solve a construction conflict related to delays. The notice of adjudication has already been drafted and served to the employer but the employer has expressed acknowledgement of its receipt. However, upon receipt, the response turns out to deny dispute existence on grounds that the CA properly made assessment of the extension of time as per the requirements of the contract documents. Therefore, based on such a background, this report seeks to address the issue of the employer avoiding to go to the adjudication and outlines some of the implications of such a situation, by making appropriate references to practical issues and some case laws. The report examines the remedies available to the contractor and explores how it can be used in solving the current predicament that is surrounded by delays in construction time. Facts Surrounding the Conflict The main facts this report assumes are: The letter of adjudication has been issued to the employer, the employer holds there is not conflict and believes the contractor is liable for the deadline extension issue, and the contractor has been in discussions with the employer on the issue of CA assessment of time with regard to general delays, the substantial number of notices and even bad weather. The contractor considers the time allowed for extensions as inadequate. What is more, the contractor carries out the work correctly to completions despite the variations. However, the CA makes it clear of issuing a non-completion notice and deducts liquidated damages of about 25,000 for every week as provided for in the contract. Also notable is the above facts summary, the contractor had issued, in time, numerous notices, to request for proper assessment of relevant matters and events so as to adjust the completion date as attributed by factors such as bad weather, variations and disruptions of work which in turn affected time and costs. The CA, on behalf of the employer, holds that the contractor has to continue to work as per contract provisions. This creates a bone of contention between the two parties, implying that it can only be solved by a third party, and who in this case is the adjudicating body. Legal Basis upon which the Contractor will Base the Claim QS Firm for legal serves makes a note in this report that, in a construction project, both the employer and contractor can lead to cause of delay of the contracts. For example, an employer can constantly change the duration by continually changing the design or due to factors such as exceptional weather where the parties have no control over and evident in the summary of the case. However, when such an event arises, the defense mechanism for the contractor will be based on reasons with the law implicitly or explicitly protects as outlined herein. The contract law which this report seeks to investigate is about the applicability of JCT 2011 SBC with regard to this conflict. The report examines the idea of conflict resolution between the contractor and CA in relation to the contractual remedies and the practical solutions that are available to the project team in relation to the delays that have occurred, and which have resulted in the dispute. The report evaluates the nature of delays in relation to both parties and advices on the best way forward so that the contract and the CA can reach an amicable settlement. SBC 05 takes into consideration the provisions about Sectional Completion as well as Contractor’s Designed Portion(CDP). SBC comes with no supplements. In it, the rights of the third parties are not included under clause 1.6 of Contracts Act 1999 unless to the level they are given consideration in S. 7 for Collateral Warranties and Third Party Rights. The primary objective of JCT with regard to SBC/QO is not to come up with significant changes to the way risks are allocated between the parties. According to Clause 2.1, the obligations of the contractor have been set out clear. In other words, the primary responsibility of the contractor is to carry out the construction project both correctly and without delays. This defines the contractor’s main obligation is compliance with Construction Phase Plan, Statutory Requirements and the Contract Documents. The Works is clearly defined as that which is indicated in the Contract Documents, and which the contractor is supposed to comply with, alongside the Construction Phase Plan, among other Statutory Requirements. Although the contractor is not allowed to omit or add anything to these requirements, there is an exception offered in the case of CA’s instruction where there is an agreement between the Employer and the Contractor. Advice on Adjustment of Time or Adjustment of the Date of Completion The implied term in a construction contract is that an employer is not supposed to hinder the Contractor from performing the works. Hindrance takes two forms such as providing late information, making requests for extra work or any form of positive preventions. Therefore, the contractor is obliged to complete the project within a reasonable time. In a case where the contractor finishes within a reasonable time, then the employer is not allowed to deduct for liquidated damages because the particular date from which the calculations of damages can be done does not exist. Further, the CA has no implied power to decide fresh completion dates except the one clearly set out in the construction contact. The procedure which the contractor can follow is to notify the CA about all the delays. If the Contractor makes a breach of the condition to notify the CA, then the CA is entitled to treat that as a breach while offering the extensions. However, in this case, the delays are attributed to the Employer’s responsibility. At all time, the contractor is obliged to point out to the CA of any delay causes and any other cause which the Contractor deems to be Relevant Events and also estimate the delay to the date of completion as attributed by each event. In cases where the completion date passes, the CA should review time extensions given and should do so in not less than 12 weeks from the time of practical completion. In such a case, the CA my fix new completion dates, make confirmation to the already fixed completion dates, and in some cases, decide another completion date different from the one that was previous decided. However, while doing this, the CA has to take the notices of the Contractor into consideration and in cases where there are no notices, the contractor should use own knowledge about the project. The main reason for doing this is to prevent the project completion time from becoming unreasonable. The Aspect of dispute resolution can be solved through the process of adjudication. In the scenario for adjudication, the Contractor or even the Employer, is obliged to refer any arising dispute ( in relation to the contract ) to adjudicators, who are third parties to the case. Although both parties bear their costs, losers have to pay the fee for the adjudicator. Further, the decision of the adjudicator is enforced by law courts even when the party that has lost has decided to refer the matter to arbitration. What is more, the contractor can base the argument of time extensions on the following principles as to variations and exceptionally adverse weather. Principle of Variations and how it Affects Time Delay Conflict The JCT includes instructed change or variations as one of the prime grounds for extending the contract time, just like it applies to other contracts that are standard. The clause for variation in the case of JCT takes into consideration the omission, addition or alterations that affect the contractor’s obligations that lie within the contract scope. Further, Clause 5.1 of JCT offers the definition for variations. Variations can result out of an employer or the team working with the employer when a number of events, such as unforeseen mistakes or errors are due to the limitations of time before a given tender. When providing for extension of the completion date as a result of variation, the employer is supposed to accommodate such changes for reasons that are justifiable and without causing a breach of contract and allow the contractor to be reimbursed out of any arising of additional work. The other reason for the provision of variation is to accommodate any error in the bills of the contract, and even other causes that are ‘deemed’ variations. Exceptionally Adverse Weather According to clause 2.29.7, exceptionally adverse weather condition has been listed as one of the Relevant Events that are responsible for time extensions. However, it is the responsibilities of the contractor to offer a valid prove that the particular weather experienced on that day was exceptionally adverse as compared to other days in the recent past. The contractor can illustrate such a point by using the information available in the local MET offices and illustrate the adverse weather has some relation to the delay caused. Considering the case of Walter Lawrence Vs Commercial Union Properties, the preceding judge emphasized that the weather itself has to be exceptional and therefore, lead to contract delay and it is not the magnitude of the delay that is supposed to be exceptional. Thus, what entitles for extension can be analyzed in terms of how the weather condition impacts on the project duration beyond the planned time. Damages the Contractor Can Claim Based on the principle that there exists variations that affect the completion time of the project and that those causes are due to the employer, then the contractor’s claim for extension is valid given that it was communicated on time via several notices. Further, such a claim can be supported by the fact that there existed an exceptional weather which led to delays. Therefore, the contractor becomes the injured party and can, therefore, claim for both liquidated and unliquidated damages. Conclusion Thus, discussed herein is an outline of the facts surround the execution of the construction project. The report identifies two principle causes of delay and they include: adverse project variations emanating from the side of the employer and exceptional adverse weather conditions. Thus, upon establishment of these two principle causes to the adjudicating party [third party in this case], the contractor is entitled to both liquidated and unliquidated damages. The purpose of the Construction law is to address the redress arising between the contractor on one side, and the CA and Employer on the other side. The main law is clearly outlined in JCT 2011 SBC. Appendix Notice of Adjudication Letter Re: Notice of Intention to Refer the Dispute for Adjudication This letter serves as a notice of adjudication following the misunderstanding arising out of the contract delays. We, the aggrieved party and contractor in this case , believe the reasons for contract delay were attributed to adverse variations emanating from your side (the CA and the Employer) and exceptionally bad weather, and would therefore, wish to follow the legal way to express this two causes and seek exception from the damages attached to us as a contractor. Besides, it is important to note the notices for contract delay were served in advance This would lead to an amicable settlement between us [the claimant] and CA and Employer [Defendant]. Yours faithfully, Contractor References Top of Form Joint Contracts Committee. (2011). Standard building contract with quantities 2011. Sweet & Maxwell. Bottom of Form Read More