Construction Contract Administration and Law - Essay Example

Construction Contract Administration and Law From the given fabric of facts, problems pointed out, the following suggestions are given for your kind consideration and immediate action. Yes sir it appears that the interests of the University face a threat from some unwanted and unavoidable conduct on the part of contractor. But the circumstances like this may arise and the legal system recognizes and guarantees remedies. The only thing is that situations like this may cause problems in the functioning of the University. Let this be read as answers to queries posed in the case. If the contractor appointed by the University, fails to act as per the requisites or requirements of the University, the University will have to first intimate him as to the deviations against the agreement. (http://www.jctcontracts.com/JCT/terms.jsp) If the terms of contract stipulate the mode in which payments are to be made to the contractor, the University should not disburse the remaining sum due to him after deviance from the agreed terms. (David Chappell, The JCT Intermediate Building Contracts, Blackwell Publishing, 2006) If time is made as an essence of contract, and if the contractor fails to complete the word within the timeframe stipulated in the contract, that itself is a breach of the terms of contract and is actionable. In JCT contract time is considered as a major component. (http://www.nottinghamcity.gov.uk/qbs_code_of_practice_26.10.04.doc) In modern construction contracts the contractor will usually have three separate but inter-related express obligations. 1. The obligation to complete by a specified date or within a specified period. 2. The obligation to progress the works regularly and diligently. 3. The obligation as to programme. If he doesn't fulfill the above three obligations, employer, her University can cancel the work. (http://www.atkinson-law.com/cases/CasesArticles/Articles/Delay_and_Disruption_Contractor's_Obligations.htm) The University, if it finds that the present contractor will not be able to fulfill his part of agreement as agreed within time can appoint another contractor after notice as to termination of contract and can seek legal proceedings for damages. (http://www.loc.gov/catdir/toc/ecip067/2006002367.html) The reliance on bad weather for non-completion of work within time is unsustainable and against law. Bad or Good weather conditions shall not and will not be a ground or excuse for going back from the terms of agreements or for seeking extension of time. If the situation complained is something, which a normal human person would expect to exist at the given time, the same cannot even be heard for a moment. Of course the contact and its clauses and its fulfillment can be affected due to acts of viz. major but weather condition cannot at any rate be considered as an input for extending time. The university is not at all bound to adhere to such a request as it is ill founded and unsustainable. (Kim Franklin, Delay Claims, "Remember that Time is Money" http://www.crownofficechambers.com/downloads/114.pdf) As it transpires the substructure has just completed, and as per the agreement the it is high time to step into a later part of the construction. The same itself is a shortcoming from the part of contractor. He cannot seek the help of any ground problem so as to wriggle out from the liability and to say that it is a fit case for extension of time. Law does not permit to entertain such a feeble claim to be entertained, and deserves to be nipped down at the very instance of advancement of such an argument. (http://www.jctltd.co.uk/stylesheet.aspfile=20112006105255) The drawings of superstructure etc are an area over which the University is having no say at all. It is the bounden duty of the Contractor to see that he is armed with all the requisites to function smoothly. The University is only duty bound to disburse amounts as and when the agreement demands. The Contractor cannot escape from liability by resorting to such a lame excuse. It can also never be a good ground for getting the time extended. (John Gelder RIBA RAIA CSI, ICIS Issues Paper: Documenting For Contractor-Design, International Construction Information Society, April 1999) The reason may appear to be a sound one but is ill founded. If the same is accepted that will cut the very root and sanctity of an agreement. It is always the duty of the contractor to enter into an agreement after foreseeing all the probable and reasonable problems he will have to acquaint with. That is where the expertise and experience counts. It is not the time to complain about the change in security systems installation etc. The same cannot be good ground for extension of time, especially when time is made as an essence of contract. If the University has insisted for a change in the structure than from the agreed on it might have become a right area over which the contractor is justified in seeking extension, as long as the same is not so the requirement deserves to be discarded. (http://www.icis.org/siteadmin/rtdocs/images/7.pdf) In short the reasons advanced by the contractor for getting extension of time is nothing short from lame excuses and the University is not duty bout to alter its stand, on the contrary the Contractor is duty bound to fulfill his part of agreement within the stipulated time. The absence of contracts may not be fatal in agitating the rights of the University. A contract can be entered into and specifically enforced even if it is not in a written form. Law recognizes the same. It is also not very necessary to have written contract entered between all the consultants, but if those things are done that will be very helpful if a situation as to breach takes place. The exchange of letters would suffice and protects the interest of the university. Law does not demand signing of contract between the University and the subcontractor. As far as the sub contractor is concerned the master is the main contractor. The main contractor will step into the shoe of the owner, if such a situation arises. The absence of agreement will not be detrimental to the interests of the University. (BSI 1989-91, BS 8000 (various Parts) Workmanship on building sites, British Standards Institute, London) What law requires is a concluded contract and as the present situation satisfies the requirements of law there is no problem owing to the absence of an agreement signed by parties. Appendices and recitals as the same have been completed will serve the purpose of law. The interests of the University are secure. The contractor is not eschewed from the liability. The shortcomings can be legally compensated if deviance from the terms took place. It can be gathered from the circumstances and admissions. Of course this may become a question only if there is a denial and the contractor under the given situation is estopped from doing so. As the circumstance reveals time is made an essence of contract, then there will definitely be provisions as the portion of work that has to be completed in a particular point of time. This would alleviate the problems. RIBA standard conditions will also be helpful for the University in redressing its grievances. The essence of contract will definitely be defeated if the same is not done within time. Law also does not envisage a situation in which a person is unlawfully enriched owing to a shortcoming as to signing of a contract, if other requirements are satisfied. Interests of justice demand and provide a remedy for the University in the given case. (http://www.pinsentmasons.com/media/414736820.htm) Piling etc are something within the area of the quality of work. There the dominant person to decide about the same is the contractor and the University is having no say on the point. Of course the university will have to submit about its requirements and if the contractor accepts the same and stars construction he cannot refrain from the stand by seeking aid of the absence of any proper appointment. The lacuna in that area will be properly completed by the circumstances and this will not in any way affect the interests of the University. The collateral guarantee from the sub contractor to the main contractor is not a bothering of the University. Once the plan is approved and the work is undertaken the University need not bother about the person appointed for the work of sub contractor appointed by the main contractor for the purpose of piling. Collateral warranty as the situation transpires is something to be concerned by the main contractor. Even if the same is not signed and completed by the main contractor the remedy of University is not lost. The University is not put to a worse situation owing to its absence. The sub contractor with his relation with main contractor may have or may not have remedies. What the University is concerned with is only the quality of work done by the main contactor. If there are any shortcomings definitely University can get the same realized or compensated. The problem highlighted as to mistakes and design changes are very vital and crucial. The same is to be seriously taken note of. If the main contractor has given a good bye to the approved plan or design and has done something will less quality than that was desired to be done, is a serious deviance from the terms of agreement. Contract bills of quantities also play a crucial role and require keen concern. University cannot compromise in those areas. If it is satisfactorily established as there exists serious deviations then immediate action is to be taken. If heating and mechanical services finds inadequate definitely legal proceedings are to be initiated. (http://www.jctltd.co.uk/stylesheet.aspfile=20112006105255) The above-narrated shortcoming is sufficient evidence as to the unsatisfactory mode of working that has taken place. As far as the university is concerned the same cannot be tolerated at all. The said problems may even become great danger in long run. Yet a decision is to be taken as to what should be done. Circumstances reval a situation which requires immediate legal action. The two remedies ahead are either to intimate the contractor in writing highlighting the shortcomings and seeking its cure within a stipulated time or to seek arbitration proceedings / lawsuit. It is also a remedy for the University to ask the Contractor to stop all works and to seek for quantified damages and to give the work to some other competent person. (http://www.jctltd.co.uk/stylesheet.aspfile=20112006105255) The balance payments can be stopped and the University after notice can even realize the losses against the erring parties to contracts It is also a remedy to approach a legal forum and to get the compensation for the inferior mode of construction together with other losses suffered by the University. Modern times contractual obligations and its remedies are part of day-to-day life of individuals and institutions and the right remedy would be to get the same agitated before proper forum at the earliest opportunity. At the same time Camford University is eligible for insurance for Employer's loss of liquidated damage. It can claim the insurance amount as per the insurance coverage under liquidated damages in building contract. It needs to be understood that, under the terms of a building contract, insurance cover will be required to protect the employer not only for the building work itself but also for any effect that the building operations may have on people (i.e. personal injury or death) and on property other than the works. This is based on issues such as type of insurance cover, which party takes out each policy and extends of cover to be provided. The general requirements of the main JCT forms of building contract say that employer is protected of loss of liquidated damages. (http://www.built-environment.uwe.ac.uk/flic/housing/5575/section3.htm) The contractor has raised ground problems as another reason for delay in work. According to JCT contract there are many construction processes that can affect adjoining property. Piling and properly excavated and supported trench are some of the examples. Though contractor has followed enough securities there can stil be damages without any level of negligence involved. But here there are no such damages, still the contractor is asking an extension citing ground problems. Reference: Alexandria VA , Construction Specifications Institute 1992, Manual of Practice: Construction Specifications Practice Module SP/090 Performance Specifying CSI BSI 1989-91, BS 8000 (various Parts) Workmanship on building sites, British Standards Institute, London David Chappell, The JCT Intermediate Building Contracts, Blackwell Publishing, 2006 John Gelder RIBA RAIA CSI, ICIS Issues Paper: Documenting For Contractor-Design, International Construction Information Society, April 1999) Joint Contracts Tribunal 1980-1995, Standard Form of Building Contract 1980 Edition (incorporating amendments 1-6, 8-13, TC/94, 14, 15), RIBA Publications, London. http://www.jctcontracts.com/JCT/terms.jsp http://www.nottinghamcity.gov.uk/qbs_code_of_practice_26.10.04.doc http://www.atkinson law.com http://www.icis.org/siteadmin/rtdocs/images/7.pdf http://www.pinsentmasons.com/media/414736820.htm http://www.jctltd.co.uk/stylesheet.aspfile=20112006105255 http://www.built-environment.uwe.ac.uk/flic/housing/5575/section3.htm Read More