Security of Payments - Assignment Example

Contracts Name: Course: Instructor: Institution: Date of Submission: Security of Payments Part A 1. The contract under construction law stipulates that two parties engage in a legally binding agreement that the parties have mutually agreed upon. The contract is mainly written where verbal agreements are sometimes encountered. For the contract to be legal, it must include the following elements, an offer, acceptance, consideration, intention, capacity and legality. The offer in this case was clear as the Agro Builders Inc. contracted the Ego Architects to develop the Super-face prisons architectural drawings (Reichman, 2017, slide 5). The intention was not only serious, but the Ego architects engages in the process of providing the drawings. Thus, the intention for the offer, and acceptance were available and the Argo architects had the capacity to make a legal relationship. Consideration of the offer was achieved when the exchange between Agro and Ego occurred. That is; according to article 1.3 if the elements that lead to the generation of a valid contract are entered, the contract is legally binding. Given that article1.2 states the contract does not have to be in writing, the contract was formed. Thus, the contract already exists in this case since the six elements of the valid contract development are perceived. The contract was formed in a written contract where the Agro Builders Inc., contracted Ego Architects to develop the architectural drawings. That is; it shows that the offer was made, accepted, considered, intention, capacity and legality were available. When they agreed to pay the drawings on a 3-stage basis; the contract was finalized. The second part of the contract was formed verbally when Argo Builders Inc., refused to pay for the first provided drawings. They went to the site and discussed verbally on the contract terms for the drawings to be presented based on the verbal agreements of the building proceeds. For instance, the case of BMD is closer to this case where the plaintiff argued that there was a latent condition that would null the contract. However, there was a claim of approximately $7m. This was due to the fact that the contractor should have judged the competence of qualified Ego Architects in this case to ensure they were qualified to work and meet the conditions of the work anticipated (Reichman, 2017, slide 55). More importantly, when the parties visited the site after determining the first architectural drawings were not as agreed in the contract, the verbal agreement made included the addition of a clause showing uncertainty under commercial law (Reichman, 2017, slide 56). Thus, the inconsistency and unclear agreements of the Argo Builders contract with the Ego Architects did not adhere to the principle of consistency and clear contracts. 2. The verbal agreement should vary the terms of a written agreement unless indicated that the agreements cannot be varied by verbal contracts. The varying of a contract stipulates the occurrence of an alteration in the actual contract. It is important to note that all contract changes do not require any variation. Thus, the contractors must demonstrate that work is done as expected through implying or expressing it was achieved as expected. However, since verbal agreements lead to the development of valid contracts, it makes it valid to make an alteration in the written contract (Reichman, 2017, slide 11). The stipulation that a contract does not have to be in writing is one the main principles presented. 3. Principles of contract formation based on the case above include that the contract does not have to be in writing. Thus, the parties did enter into legal binding agreements, when the contract was first signed. The contract was also formed on the basis of a verbal contract. That is; both contracts were formed as the elements that make legal and binding contacts were made. The contract has to be made through the consensual relationship. Both parties must engage in the contract formation is through their free will (Reichman, 2017). The contract must involve two consenting parties. For instance, the formation of the contract above included both the Argo Builders Inc. and the Ego Architects. The exchange in the relationship was through the exchange of the architectural drawings for the remuneration in terms of money that was to be paid in the three stages as agreed. The relationship between the two parties forms the essence of the contract (Reichman, 2017, slide 24). The promise also forms the documentation of the contract, which is perceived through the intent for the contract. The legal recognition of the contract is also part of the contract documentation. For a contract to be recognized legally, the legal binding part of the offer made must be available. For a written and verbal contract, this is achieved through ensuring the identified elements of the contract are available. Thus, the role of the legal recognition is to enforce the contract promises. The hierarchy of forming contracts is documented through the inclusion of the elements of a valid contract. Thus, the hierarchy of contract documentation is related to the principles of contract formation, which include the availability of an offer, acceptance, consideration, intention, capacity and legality of the offer, whether written or verbal contract. Thus, the documentation of the contract begins through the agreement been made. The agreement has to be signed by both parties, showing that they agree on the terms of the contract (Reichman, 2017, slide 81). That is; the conditions of the contract must be clearly stated to show that both parties consent on the conditions of the contract. The drawings that included the main part of the contract had to be made provided. That is; the architectural, engineering and survey of the drawings must be met for the contract to occur. Other needed drawings that the contract would specify had to be met. That includes other specifications such as the engineering and architectural specifications of the needed drawings. Others hierarchies include the bill of quantities and other needed documents that will ensure the completion of the contract to the anticipated demands and conditions of the contract. The standard documentation of contracts includes the contractor supplying to the superintendent the contract forms. Thus, once the document is supplied to the superintendent it is completed. The superintendent’s role is to act honestly in fairly for both parties in the contract and acts with the prescribed or reasonable time. 4. Impact of legal stamping the specifications ‘approved’ on any future contractual position depicts that the contract is sealed and cannot vary under any condition unless a new written contract is provided. The engineers stamp of an approved document helps identify the work carried out by the engineer that finished the task. The stamp on an approved document specific that that the contractual position of the contract is to be carried out by the presented engineer. However, the stamp is not a certificate of correctness. The main position of a stamp on a contract is that a qualified engineer drafted the contract/ document or has read and is satisfied with the information provided in the document. The applicable principle is the proportionality basic legal principle. The principle is used in ensuring that the contract is carried out fairly and honestly mainly when there is a conflict (Saunders & Le Roy, 2003). The principal of proportionality presents that the rights are not absolute, where the hierarchy of rights does not exist. The rights presented may not go as far as claimed. Another part of the principle that applies to the stamping of approved contracts/ documents is that legal capacity where the contractors must have the needed capacity to enter into the contract while making the identified contracts. 5. To avoid the occurrence of problems in amending construction course is mainly ensuring that the six elements of a valid contract are well exercised. That is; at first the offer has to be made. Both the parties should understand clearly what they are saying, the offer should be understood clearly to avoid mis-presentation or mistakes throughout the contract. Before accepting, the offer made should be clearly understood. As such, one accepts what they have already understood, and actually been offered by the contractor. For instance, the problem between Argo Builders Inc. and the Ego Architects was due to the misunderstanding of the offer or mis-presentation of the offer to be given. That is; the Ego Architects provided architectural drawings of what the understood when the offer was made. The Argo may have mispresented their offer leading to the development of the problem identified. Thus, the procedures to be followed to avoid problems mainly concern understanding the offer before accepting and entering into a contract. Problems occur due to contractual problems or uncertainty on the terms of the contract, or as perceived the uncertainty/ mis-presentation of the offer made. On the other hand, the use of amended terms/ contracts are used to amend problems and contracts when they occur. Technical disputes are resolved through using the right consults that have the expertise needed to judge and make the right decisions regarding a contract. The selection of the most appropriate contractual models with simple and clear contracts should be made to ensure the terms of the contract are made. Other strategies may include ensuring that the implementation of the contract consumes the anticipated time, and is finished on the agreed terms in the contract, which avoid legal disputes. On the stipulation that disputes occur, one must use the dispute clauses used for solving disputes. Thus, generally, the disputes should be solved through negotiations where both parties find a neutral fact to negotiate on. Mediation is also used to solve technical disputes where experts such as lawyers are used to assist in mediating and finding a solution to the dispute that occurred. Adjudication is the legal process of solving problems which includes the litigation processes, arbitration and others that involve legal procedures and court proceedings. PART B a. The project manager needs to have the provided drawings to show how they vary from the written document. However, when the first drawings were not what Argo Builders Inc., requested from the Ego architects, they went to the site where variations to the contract were made verbally. Therefore, the project manager, needs to have the original written contract, which will then be assessed with the provided architectural drawings to show how they varied leading to the development of the given changes, which were made verbally, when the two parties were on the site of construction. On the other hand, the verbal variations made on the site should be provided, to show how they vary from the architectural drawings provided. The project manager needs to understand that the court will assess the issue through the written contract but with an inclusion of the verbal variations made. This, will determine where the architectural drawings provided do not meet the anticipated contractual agreements. Expert witnesses are qualified through skill, knowledge, education and training on how to testify. The testimonies from expert witnesses uses the scientific expertise of the witness to offer more light to the issue to at hand. That is; the testimony relies on actual data and facts, reliable principles and other factors that show the actual side of the issue at the court. The court assess expert witnesses through factors such as their certifications on whether they are an expert on the case been handled, or certified expert witness. This determines if the data of the witness can be used to make rulings on a case. The certification stipulates that the expert has received all the necessary training, knowledge, education, and experience on the issue that is presented before the court. The testimonies of expert witnesses play a huge role on influencing the decision of the judge. Thus, the expert must be effectively certified to ensure that they do not have a conflict of interest or that their testimonies are biased on the case, which would lead to an unfair ruling in the court. Thus, the courts assess the witnesses based on the given requirements of different states, specialty and other certifications that are defined by the courts. The testimony of the witnesses is provided as an opinion or as defined by the rule of law. Using expert witness also has numerous risks. For instance, in 2007 in Mississippi, Radley Balko had a case against CSI: Mississippi where the use of the expert witness made the case go wrong. Steve Hayne was an expert witnesses used in a capital murder case. Tyler Edmonds was accused of killing his sister’s husband (netk.net, 2007). Tyler was 13years old. Hayne’s opinion was that based on the medical examiner’s data, the bullet wounds on the victim had been a joint effort between Tyler and his sister, where both had their hands on the gun and pulled the trigger at the same interval. Hayne also went ahead and stipulated that he would have favoured another party been used in the positioning of the gun, where it would show the consistency of the two people pulling the gun (netk.net, 2007). Thus, the moment he stipulated that he could tell reliably that two hands were on the gun made his testimony unreliable in the court. Thus, his testimony was not considered on the basis that it lacked scientific data leading to a vote of 8:1 (netk.net, 2007). Another case where the expert witness broke a case was presented through several cases provided by (Rahman, 2016). The case of Edenfield, Cox, Classens and Bruce was a court proceeding on a medical malpractice. The expert witness used was a certified Harvard expert and had high knowledge and specialty on the topic of medical malpractice. The witness was very rude, where his rudeness was perceived in the trail leading to the loss of the case. The jury hated the witness and made their judgments based on this emotion (Rahman, 2016). Other cases are presented and show that expert witnesses can affect the case by making it or breaking it (Rahman, 2016). b. The Building and construction Industry security of payment ensures that when people enter into construction contacts they get paid. It quickens the processesof recovering payments without engaging lawyers. Thus, for the Argo Builders Inc, to avail itself it must ensure the claim is issued in the act, or whether the contractprovided allows the presented claim action. Once the Argo Builders Inc., is sure the claim is issued or allowed in a contract in the act, it can go ahead and obtain the Act to Apply to the state, which in this case is the state of Victoria. The copy of the act is obtained from the legislation website of the given state, which describes the processes and steps that the buisness should engage in to recover the progress and outstanding payments. Thus, for the company to have the possibility of using the act it should ensure that the construction contract is available and in place with the security of payment act according to the state. More importantly, the work cited in the contruction contract mist be completed and has met the conditions of the contract without engaging in any defects. Thus, once the Argo Builders Inc., is sure it has met this conditions, the first notice of the parties that have breached or varied the contract will be noticed with a reference date for the claim to be made, which is done on monthly basis. This is followed with the vaild payment claim been made and served to the identified respondent who is given on standard otices, 14 days to pay the claimant. It also includes the amount that is expected to be recompesed. Consequently a second notice is given, where it the claim is not met under the timeline given, the claim fails. Other stes that followinclude the claimant been entitled to the payment based on the act, then the adjudication application form. The adjudiation form must be in writing, and made to an authorized authority chosen by the claimant (Macindoe, 2015). The Application of the Act stipulates that it is subject to subsection where the Act is Applicable toany contract that is provided in writing. That is; the Act is irrelevant to verbal contracts. The act is not application to contracts that do not involve construction work including suply of products to residential properties. The contract also contains the provisions that the parties undertake in relation to the construction work. Thus, all contracts must be in writing irrespective of whether both parties signed the contract (NSW Government, 2016). Availing a company in the SOP is beneficial as perceived through the case of Grocon Constructions where without having been availed in the ACT, the $544,841.00 that was entitled to PCJV would not have been recovered, which was upheld even by a second adjudication (Reichman, 2017, slide 143). References Macindoe, R., 2015. The Business Architecture: A Seven-Step Guide to using the Security of Payment Act. [Online] Available at: http://www.aca.org.au/article/using-the-security-of-payment-act-a-seven-step-guide [Accessed 28 4 2017]. netk.net, 2007. Networked Knoweldge - Media Report. [Online] Available at: http://netk.net.au/Forensic/Forensic8.asp [Accessed 28 4 2017]. NSW Government, 2016. Fair Trading: Security of Payment. [Online] Available at: http://www.fairtrading.nsw.gov.au/ftw/tradespeople/building_industry_essentials/security_of_payment.page [Accessed 28 4 2017]. Rahman, M., 2016. The Expert Institute: 15 Attorneys Share Their Expert Witness Horror Stories. [Online] Available at: https://www.theexpertinstitute.com/15-attorneys-share-their-expert-witness-horror-stories/ [Accessed 28 4 2017]. Reichman, C., 2017. Contracts. Module 4, pp. slide 1- 181. Saunders, C. & Le Roy, K., 2003. The Rule of Law. New York: The Federation Press. Read More