1 w e l c o m e. cices & pce–uae 6 july 2010 – abu dhabi contract workshop gary beamish...

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W E L C O M E.CICES & PCE–UAE 6 July 2010 – Abu Dhabi

Contract Workshop

Gary Beamish Eng.C, C.Eng, C.Env, C.WEM, MICE, MCIWEM, MQSI

M: 050 4889751E: [email protected]

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CONTENTS

1. Parties

2. Roles & Responsibilities

3. Contract Essentials

4. Letters of Intent / Acceptance

5. Common Delays

6. Entitlements & Variations

7. Claim Document

8. Records & ADR

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1. The Parties

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Traditional Players

• The Employer

• Designer / Lead Consultant / Architect • Sub-consultants/Specialists

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• Contractor• Subcontractors / Suppliers / Nominations

• Engineer (Construction period)

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Contractual Links

• The Employer contracts with Designer / Lead Consultant /

Architect

• Designer / Lead Consultant / Architect contracts with Sub-

consultants/Specialists

• The Employer contracts with the Contractor

• The Contractor contracts with subcontractors & suppliers

• The Employer contracts with Engineer (Construction period)

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Possible Other ‘Parties’

• Master Developer;• Employer’s Representative;• Employer’s Third party reviewers;• Statutory Authorities;• Programme Manager;• Project Manager;• Contracts Consultant;• Cost Consultant;• Quantity Surveyors (BoQ/Packaging);• Dispute Adjudication Board or other ADR;• End User, i.e. tenant.

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In Times Gone By!

• Buildings made largely of stone & timber;• Castles, cathedrals etc;• Programme; • The Employer: (King or a.n.other)• Employer’s Representative: (Learned staff)• Contractor/Engineer/Architect: (Master Mason)

• Nowadays a Prime cost reimbursement contract!• Client & Trades: Construction Management JCT!

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Emergence & Distinction

• Agriculture, industrial, services;

• 1666 ... and later, the Industrial Revolution;

• The Engineer… Military... then Civil...

• Structural, roads, bridges, railways, sewerage, water supply etc, etc…

• The Architect; Aesthetics, spatial use, ID;

• The QS;

• Thus was born the modern roles!

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Employer

• Ensure cash availability;• Appointment of in-house or external Employer’s

representative;• Appoint Consultants under consultancy agreements;• Sign off project brief, design brief and budgets;• Decide the duration of works (with Engineer);• Accept Tender; • Confirm start date & facilitate access;• Nominate subcontractors & suppliers; • Make payments• Non-hindrance & co-operation.

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Contractor

• Estimate costs & risk;

• Procure, co-ordinate & manage resources;

• Manage cash flow;

• Submittals as per conditions;

• Comply with instructions;

• Insure & indemnify;

• Notify as per conditions of contract, implied or express;

• Records, records, records!

• Deliver the ‘product’ (Works) in accordance with the contract/design/time intent, including defects period.

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Engineer

• Appoint Engineer’s Representative;• Notify delegated authority; • Provide technical & managerial expertise;• Watch & supervise;• Review/consent/approve, (fairly or impartially);• Issues further drawings/instructions;• Agent for ordering variations;• Direction for expenditure under Provisional Sums;• Certify (payments/taking over etc);• Competent mediator, EOTs & initial disputes;

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Choice of Contract Form

• Partnering approach: common goals; collaborative; integrated project team; spirit of trust, good faith, fairness and mutual co-operation, no-blame culture. All ‘use’ KPIs, Value and Risk Management.

• PPC 2000; Pre-Possession Agreement. Partnering Charter, a multi-party contract relating to a single project through risk management;

• NEC3 (ECC); Option X12, Programme led contract. Schedule of Partners & Core Group Members; between more than two parties on the same project.

• Be Collaborative; Client*/Purchaser and Supplier, co-operative and collaborative manner. Supplier is responsible for the risk register.

• GMP; Ceiling price reached through VE, agreed preliminaries and benchmarking etc

• Cost +; Mutual agreement on preliminaries and ceiling price.• Hybrids; targets, incentives, pain gain etc.

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Types of Contract

• Simple contracts orally or in writing.

Correspondence;

Signed document(s) - most common;

Implied from conduct, BUT must possess certain essential

elements for the formation of a valid contract.

• Contracts executed as deeds.

Always written;

Signed, sealed & delivered.

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Formation of a Contract

The essentials of a valid simple contract are:

1.1 Offer & unconditional acceptance;1.2 Consideration;1.3 Intention to be bound (to create legal

relationship);1.4 Legality of purpose (Contract must be legal);1.5 Capacity of the parties to contract;1.6 Reasonable Certainty (Sufficiency) of Terms; 1.7 Possibility of performance;1.8 UAE Federal Law.

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1.1. Offer & Unconditional Acceptance

• Definite offer - accepted unconditionally,

the meeting of two minds (consensus ad idem).

• Qualified (conditional) acceptance,

a counter-offer (invitation to treat?)

• Genuine agreement and consent,i.e. no duress;

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1.1.1 Communication of Offer and Acceptance

Time Allowed for Acceptance of an Offer:

• An offer can be revoked at any time before it is accepted.

• The offeror may waive or extend the time-limit (promise).

• The offer, and acceptance of the offer, must be properly communicated by the one party to the other;

• The contract is brought into existence upon communication of the acceptance;

• The act of acceptance creates the contract and once communicated the acceptance cannot be revoked;

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1.1.2. Offers and Counter Offers (1 of 3)

• Always reaffirm the conditions and terms that shall prevail upon acceptance.

• Beware of the terms and conditions attached to an offer, particularly a final offer!

• …why? …

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Chichester Joinery Co v John Mowlem (1987)

• The last shot was fired by the sub-contractor with an “Acknowledgement of Order”

• This effectively re-imposed the terms of their own quotation which had been countered by Mowlem’s Order document

• Mowlem did not object to the acknowledgement, believing that their order prevailed; unfortunately for Mowlem, it did not.

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• Agreement terms must be certain or capable of being made certain otherwise no contract;

• acceptance must be absolute and identical with the offer;

• offer must be expressed with precision and unconditional acceptance in accordance with requirements and intentions;

• A definite and unconditional offer becomes a binding promise upon acceptance.

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1.1.3. Acceptance by conduct

• An offer may be accepted by :

• Despatching goods in response to an offer

• Carrying out work on receipt of an order

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1.2. Consideration• Definition:

• “Consideration is some right, interest, profit or benefit accruing to the one

party, or some forbearance, detriment, loss or responsibility, given,

suffered or undertaken by the other”.

• an exchange of an act;• a promise of an act; or,• a forbearance not to carry out an act.

• Examples of valid consideration would be the payment of money, a

promise to pay money, a promise to perform work, or forbearance from

deducting damages. The monetary value of the consideration is not

material for the formation of a contract as long as it has some value.

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1.2.1 When is Consideration needed?

The essential element of consideration should be borne in mind with particular regard to the following:

• Fairness of the bargain is irrelevant – e.g. AED 5 for a Rolls Royce;

• Simple contracts (as opposed to contracts by deed) require each party to give consideration for a contract to be binding;

• A gratuitous promise is not normally enforceable;

• Hence, the presence of any consideration demonstrates that the promise is not simply gratuitous;

• In every simple contract each party’s promise is the consideration for the other party’s promise. In other words there is an exchange of promises.

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1.3. Intention to be bound (1 of 2)

• No binding contract will exist unless it has been made in contemplation of legal consequences;

• A mere statement of intention made in the course of conversation will not normally constitute a binding promise, though acted upon by the party to whom it was made.

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• In written commercial transactions...

intention to create legal relations is presumed, however in social and domestic arrangements it is the opposite, the courts have presumed that the parties did not have intention to create legal relations.

1.3. Intention to be bound (2 of 2)

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1.4. Legality of purpose

• The contract must be legal;

• Illegal by Law: • An illegal term in a contract will be void and effectively

struck out. E.g., any detail or specification which contravenes UAE Law is invalid. If the Contractor or Subcontractor knowingly incorporates the illegal detail then there may be no obligation on the Employer to pay for that work.

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1.5. Capacity

• Companies can only contract in accordance with the services allied to their Licence.

• Minors, drunks and lunatics cannot enter into a contract.

That is to say, any purported contract entered into by persons in those or similar categories will be declared void by the courts.

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1.6. Reasonable certainty of terms (1 of 2)

• It is necessary that the parties agree on its essential terms. • The essential terms must not be so vague as to be

incapable of ascertainment. • Provided the essential terms are agreed, the courts may

imply ancillary terms to give what is called “business efficacy” to the contract e.g., where the contract sum and the extent of work are agreed but no contract period has been fixed. The court may determine what is a reasonable time in all the circumstances for completion.

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1.6. Reasonable certainty of terms (2 of 2)

Court of Cassation, Case Study - 34011999: here the judgment confirmed that when interpreting contracts, the correct approach based on Article 265 of Federal Law No. 5 of 1985 (the Civil Code), is that:

• ‘if there is scope for interpretation of the contract, an enquiry shall be made into the mutual intentions of the parties beyond the literal meaning of the words, and guidance may be sought in so doing from the nature of the transaction, and the trust and confidence which should exist between the parties in accordance with the custom in such dealings.”

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1.7. Possibility of performance (1 of 2)

• A party to a contract is entitled to have the contract performed in the manner described in the contract. That party cannot be compelled to accept a different mode of performance.

• Whether, what has been done constitutes performance of the contract is a question depending in each case on the construction of the terms of the contract and/or the facts of the situation.

• The parties may, by agreement or waiver, substitute a different mode of performance for that originally agreed and by so doing create a new contract, providing that valuable consideration is present in so doing.

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1.7. Possibility of performance (2 of 2)

• Occurs, where the circumstances imply a requirement for performance by an exact time;

• Failure to perform gives rights to the other party. • The general principle is that performance must be carried

out within a reasonable time. The exceptions to the general principle for a reasonable completion time arise where time is expressed in writing as “of the essence”;

• Where time was not originally of the essence in a contract and one party has been guilty of undue delay, the innocent party may give notice requiring the contract to be performed within a reasonable time, in which case time is said to become ‘of the essence’.

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1.8. UAE Federal Law• Federal Government & Federal Laws: Laws of the UAE;• Individual Emirate Government & individual Emirate Laws;• Islamic Shar’ia Law: Overall law of the UAE.

• UAE is largely based on ‘civil’ law, not ‘common’ law, therefore, in theory legal principles apply, NOT history from previously decided cases.

• Federal Laws with respect to construction includes, Civil Laws and Commercial Laws.

• Priority of ‘Laws of the land’:• Federal law;• Emirate laws;• Construction industry custom;• General custom;• Laws pertaining to civil matters.

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4. Letters of Intent

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Letters of Intent

Avoid letters of intent wherever possible “a dangerous vehicle to rely on for the formation of a contract”

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Letters of Acceptance (1 of 4)

In most instances it should be possible to negotiate and compile a comprehensive formal Contract Agreement: hence, a scantly written Letter of Acceptance should

be the exception, not the standard approach

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• Different letter types, ‘Acceptance’, ‘Confirmation’, ‘Agreement’, etc, check the purpose and content:

• A simple statement of intention is uncertain;• British Steel Corporation v Cleveland Bridge (1984)

• A request for work to be carried out may be binding depending on parties conduct;

• Beware: A statement confirming that contract terms and conditions will be FIDIC etc … does not necessarily invoke those conditions.

• Bryen and Langley v Martin Rodney Boston (2004)

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• An expression in writing of a party’s present intention to enter into a binding contract with clearly stated scope, agreed terms and conditions including clearly identified terms and conditions yet to be finalised.

• A Letter of Acceptance might be used where we want work to commence before the full scope, terms and/or conditions are settled, i.e.:

• Scope of Works yet to be fully designed;• Pressure on immediate start;• Long lead-in period for materials;• Contract sum yet to be finalised, etc;

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• The letter should include clear details of:• final offer and acceptance letters/documents and terms;• back-to-back conditions of main contract, attach copies etc;• payment terms and procedures;• authorization to proceed with specific defined activities;• defined limit of expenditure and subsequent arrangement;• defined period of letter validity and subsequent arrangement;• termination & winding down clause;• Bonds, advance payments;• time for submittals, programme, insurances/indemnity etc;• intellectual property rights, warranties; • liquidated damages and/or penalties, per day, limit;• start and completion/section dates;• provisions for variations and instructions;• applicable Law, no privity of contract, time is of the essence, etc;• signatures to confirm acceptance of the terms and conditions

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5. Common Delays

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Typically…

• Access/logistics problems;• Issue of variations expanding the scope of the contract;• Late issue of drawings or instructions (including design details etc);• Late return of submittals;• Misinterpretation of the contract;• Late nominations for sub-contractors/suppliers;• Subcontractors and/or supplier delays;• Market shortages, Materials, Labour and Plant;• Poor procurement schedules/planning;• Disruption or lost productivity;• Late or re-inspections sign-off;• Additional rigorous testing;• Third parties (or other contractors etc).

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Excusable and Non-excusable delays

• Excusable delays, two categories:

• Entitlement to an extension of time thus relieving the obligation to pay liquidated damages and,

• delays which provide a right to both more time and financial compensation.

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Excusable and Non-excusable delays

• Non-excusable delays:

• usually those due to some fault of the contractor (or faults

of those for whom he is responsible) that do not have relief

from liquidated damages.

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Force Majeure - FIDIC Red Book

• 19.1 Definition of Force Majeure

• In this Clause, "Force Majeure" means an exceptional event or circumstance which prevents or impedes the due performance of the contract by that party :

• (a) which is beyond a Party’s control,

• (b) which such Party could not reasonably have provided against before entering into the Contract,

• (c) which, having arisen, such Party could not reasonably have avoided or overcome, and

• (d) which is not substantially attributable to the other Party.

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Other delays

• Neutral event: the fault of neither party;

• E.g. external strikes and other forms of industrial unrest, riots, delays by local authorities and statutory undertakers, and

• if the contract is silent as to delays by a neutral event then the contractor may take the risk.

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Other delays

• Concurrent delay:

• Employer & Contractor delays at the same time…• applying only to the period of overlap.

• The Shorter Oxford Dictionary also gives ‘concurrent' a wider meaning with 'contributory cause‘.

• Disputes arise not so much on how long was the period of the overlap, but to what cause should it be attributed and to what extent is it permissible to consider the knock-on effects.

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Delay response

• Best Endeavours:

• Contractor to prevent or mitigate the potential delay and mitigate its loss;

• usually by re-programming the works;

• the proviso does not contemplate the expenditure of substantial sums of money. [Keating on Building Contracts 5th

Edition];

• Hence, residual consequences may occur due to out of sequence working or loss of efficiency, etc.

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Notices

• Advance notice? Has the Engineer or Employer been prevented from or substantially prejudiced by the failure to investigate the claim?

• Contractor must identify the entitlement provision(s), cause and effect;

• Send an interim claim providing full and detailed particulars of the amount claimed and the grounds on which the claim has been made;

• Further particulars…

• Contractor must maintain contemporary records;

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Notices

• Additional payment under contract provisions :• Due to variations;• Due to re-measure;• Miscellaneous provisions/other entitlement clauses.

• Damages for breach of contract:• Breaches affecting performance;• Breaches resulting in termination or rescission of

contract;• Breach of Employer’s payment obligation.

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FIDIC Entitlement Clauses

• The 1999 edition of the Red and Yellow Books each contain over 20 sub-clauses specifying events which may give rise to entitlement;

• The Silver Book, which places greater risk on the contractor also contains 20 + such sub-clauses;

• The sub-clauses in the new Red and Yellow Books giving entitlement for additional money or time are listed in the following slides (an asterisk indicates that it is also contained in the Silver Book):

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FIDIC Entitlement Clauses Sub-clause title

Contractor's entitlement

1.9

[Red Book only] Delayed Drawings or Instructions

Contractor may claim extension of time, cost and reasonable profit if engineer fails to issue a notified instruction or drawing within a reasonable time

1.9

[Yellow Book only] Errors in the Employer's Requirements

Contractor may claim extension of time, cost and reasonable profit for errors in the employer's requirements which was not previously discoverable

2.1 Right to Access to the Site* Contractor may claim extension of time, cost and reasonable profit if employer fails to give right of access to site within time stated in the contract

4.7 Setting Out

Contractor may claim extension of time, cost and reasonable profit for errors in original setting-out points and levels of reference

4.12 Unforeseeable Physical Conditions

Contractor may claim extension of time and cost if he encounters physical conditions which are unforeseeable

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FIDIC Entitlement Clauses 4.24 Fossils*

Contractor may claim extension of time and cost attributable to an instruction to contractor to deal with an encountered archaeological finding

7.4 Testing*

Contractor may claim extension of time, cost and reasonable profit if testing is delayed by (or on behalf of) the employer

8.4 Extension of Time for Completion *

Contractor may claim extension of time if completion (see sub-cl. 8.2 and 10.1) is or will be delayed by a listed cause

8.5 Delays Caused by Authorities * Contractor may claim extension of time if Country's public authority causes unforeseeable delay

8.9 Consequences of Suspension*

Contractor may claim extension of time and cost if engineer instructs a suspension of progress

10.2 Taking Over of Parts of the Works

Contractor may claim cost and reasonable profit attributable to the taking over of a part of the works

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FIDIC Entitlement Clauses 10.3 Interference with Tests on Completion*

Contractor may claim extension of time, cost and reasonable profit if employer delays a test on completion

11.8 Contractor to Search*

Contractor may claim cost and reasonable profit if instructed to search for cause of a defect for which he is not responsible

12.2 [Yellow Book only] Delayed Tests *

Contractor may claim cost and reasonable profit if employer delays a test after completion

12.3 [Red Book only] Evaluation Contractor's entitlement to new rates or prices for work whose quantity has been changed or which is varied

12.4 [Red Book only] Omissions

Contractor may claim a cost which, although it had been included in a BoQ item, he would not recover because the item was for work which has been omitted by variation

12.4 [Yellow Book only] Failure to Pass Tests after Completion*

Contractor may claim cost and reasonable profit if employer delays access to the works or plant

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FIDIC Entitlement Clauses13.2 [Red Book only] Value Engineering

Contractor may claim half of the saving in contract value of his redesigned post-contract alternative proposal, which was approved without prior agreement of such contract value and of how saving would be shared

13.3 Variation Procedure* The contract price shall be adjusted as a result of variations

13.7 Adjustments for Changes in legislation*

Contractor may claim extension of time and cost attributable to a change in the laws of the country

14.4 Schedule of Payments*

If interim payment installments were not defined by reference to actual progress, and actual progress is less than that on which the schedule of payments was originally based, these installments may be revised

14.8 Delayed Payment*

Contractor may claim financing changes if he does not receive payment in accordance with sub-c1.14.7

16.1 Contractor's Entitlement to Suspend Work*

Contractor may claim extension of time, cost and reasonable profit if engineer fails to certify or if employer fails to pay amount certified or fails to evidence his financial arrangements, and contractor suspends work

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FIDIC Entitlement Clauses16.4 Payment on Termination* Contractor may claim losses and

damages after terminating contract 17.1 Indemnities *

Contractor may claim cost attributable to a matter against which he is indemnified by employer

17.4 Consequences of Employer's Risks*

Contractor may claim extension of time, cost and (in some cases) reasonable profit if works, goods or contractor's documents are damaged by an employer's risk as listed in sub-c1.17.3

18.1 General Requirements for Insurances*

Contractor may claim cost of premiums if employer fails to effect insurance for which he is the "insuring party"

19.4 Consequences of Force Majeure*

Contractor may claim extension of time and (in some cases) cost if Force Majeure prevents him from performing obligations

19.6 Optional Termination, Payment and Release*

Contractor's work and other costs are valued and paid after progress is prevented by a prolonged period of Force Majeure and either party then gives notice of termination

19.7 Release from Performance

If it becomes impossible or unlawful to perform contractual obligations, contractor may be released and can claim as in 19.6

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7. Claim Document

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The Claim Document

• Covering letter;• The Document, Appendices … contents.

• 1 EXECUTIVE SUMMARY • 1.1 Time Related Matters • 1.1.1 Extension of Time • 1.1.2 Acceleration Measures • 1.1.3 Disruption and Out of Sequence Working • 1.2 Cost Related Matters • 1.2.1 Loss and/or Incurred Damages • 1.2.2 Negation of Liquidated Damages/Penalties • 1.2.3 Payment of Financing Charges Accruing • 1.3 Summary

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The Claim Document

• 2 INTRODUCTION• 3 ABBREVIATIONS & CLARIFICATIONS • 3.1 Abbreviations and Terms Used • 3.2 Clarifications• 4 CONTRACT PARTICULARS • 4.1 The Parties, Period and Contract Price • 4.2 The Contract Documents and Order of Precedence • 4.3 Relevant Contract Agreement Particulars • 4.3.1 The Contract Price • 4.3.2 The Completion Period • 4.3.3 Penalties • 4.3.4 Claim Notification and Submittal Period • 4.3.5 Substantive Law • 4.4 The Works Generally • 4.5 Programme of Work

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The Claim Document • 5 CONTRACT CLAUSES GIVING RISE TO ENTITLEMENT• 6 STATEMENT OF CLAIM • 6.1 Introduction • 6.2 Matters Relating to Cost • 6.2.1 Concurrency as it relates to compensation for prolongation • 6.2.2 Float as it relates to compensation • 6.2.3 Mitigation of loss • 6.3 Matters Relating to Time • 6.3.1 Generally [from the SCL Protocol] • 6.3.2 Concurrent and Culpable Delays • 6.4 Matters Relating to Negation of Penalty for Delay• 7 PREVENTION AND BREACHES OF EXPRESS OR IMPLIED TERMS BY

THE EMPLOYER, OR THE ENGINEER ACTING AS THE EMPLOYERS AGENT

• 7.1 Prevention By the Employer/Engineer Generally • 7.2 Provision of Information by the Employer/Engineer • 7.3 Employer/Engineer's Approval • 7.4 Employer/Engineer's Procedural Breaches

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The Claim Document

• 8 CONDITIONS PRECEDENT TO ENTITLEMENT • 8.1 Introduction • 8.2 Conditions Precedent to the Deduction of Damages by the

Employer • 8.3 Notification as a Condition Precedent to the Award of an Extension

of Time• 9 CAUSES OF DELAY AND THEIR EFFECT ON THE WORK • 9.1 Delay Event No. xxxx • 9.1.1 Introduction • 9.1.2 The History of the Event (the "Cause") • 9.1.3 The Impact of the Event (the "Effect") • 9.1.4 Conclusion• 10 COMPOSITE EFECT OF EVENTS • 10.1 Delays Giving Rise to Extension of Time • 10.2 Disruption of the Works

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The Claim Document • 11ASSOCIATED COSTS • 11.1 Prolongation Costs • 11.1.1 Site Overheads • 11.1.2 Head Office and Other Overheads • 11.1.3 FORMULAE COMPARISON (Hudson, Emden, Eichleay)• 11.1.4 Plant Costs • 11.1.5 Finance Costs • 11.1.6 Loss of Profit • 11.1.7 Summary of Prolongation Costs • 11.2 Acceleration Costs • 11.2.1 Supervision • 11.2.2 Additional Resources • 11.2.3 Disruption and Uneconomic Working • 11.2.4 Exceptional Costs (e.g. Air Freight) • 11.2.5 Summary of Acceleration Costs • 11.3 Disputed Costs • 11.3.1 Variations • 11.3.2 Other Issues • 11.4 Summary of Associated Costs

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The Claim Document • Prolongation overhead elements might include:-

• Staff Costs; Salaries + bonuses + benefits Site Staff• Directors' emoluments and expenses• Medical Expenses / Medical Insurance Staff• Site Overheads; Audit Fees• Contractor's & Engineer’s Printing & Photocopying• Progress reports & photos• Travel Visits from HO / Others • Vehicles, fuel, maintenance, hire• Tel/Fax/Postage & Courier/Books/Other expenses• Security & Site boundary maintenance• Road and pavement maintenance• Site Expenses & Depreciation of Assets; Contractor's & Engineer’s Site offices• Maintenance of warehousing and yards• Rental charges for areas outside the site boundary• Contractor's welfare facilities & rubbish clearance• Stores, Canteen, stationary, refreshments • Depreciation; vehicles, computers, FF&E, plant & tools• Plant, Tools & Other Requirements; Scaffolding, PPE, plant & tools; rental, maintenance,

fuel• Heat, light, power, water and housekeeping• Repairs to buildings, plant and equipment • Transport and mobilisation costs• Financial Liabilities; Insurances & Bonds

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‘Causation’... • Leyland Shipping Co v. Norwich Union Fire Insurance

Society (1918) :

• a torpedoed ship in harbour, towed to a breakwater, then due to a gale towed out to an anchorage where she sank.

• It was held that the cause was the torpedoing and that the unsuccessful attempts to save the ship did not break the chain of causation.

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Linkage to Effect

• It is often not difficult to prove the facts of the occurrence which are often well-known by all parties to a contract.

• It is equally often not difficult to demonstrate that certain effects were felt by the claiming party, additional costs incurred, delay, and so on.

• What is more difficult, but is essential, is to link the two.

• The value of detailed programmes and as built records cannot be overstated in this regard. Contemporaneous records in the form of reports and diary entries, correspondence and meeting minutes, can also be extremely useful in establishing the causal nexus.

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Competing causes

• (a) the Devlin approach. If a breach of contract is one of two causes of a loss, both causes co-operating and both of approximately equal efficacy, the breach is sufficient to carry judgment for the loss.

• (b) the dominant cause approach. If there are two causes, one the contractual responsibility of the defendant and the other the contractual responsibility of the plaintiff, the plaintiff succeeds if he establishes that the cause for which the defendant is responsible is the effective, dominant cause. Which cause is dominant is a question of fact, which is not solved by the mere point of order in time, but is to be decided by applying common sense standards.

• (c) the burden of proof approach. If part of the damage is shown to be due to a breach of contract by the plaintiff, the claimant must show how much of the damage is caused otherwise than by his breach of contract, failing which he can recover nominal damages only.

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8. Records & ADR

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Records, Records, Records:

• Records of records: in/out logs, distribute, track, response;

• Monitoring records: resources, measurements, programme;

• Conformity records: inspection, testing, defects;• Event records: instructions/variations, notices, delays,

additions;• Costs records: planned and unplanned costs;• Contemporaneous records: site diary, submittal

registers, photos.

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ADR Techniques include: (slide 1 of 2)

• Negotiation: the most common form of dispute resolution where the parties themselves attempt to resolve the dispute. An express provision in a contract for good faith negotiations to take place can be enforced;

• Mini Trial: this is a formalised settlement procedure at which representatives of the parties make short presentations to a panel which comprises at least one senior member from each party and usually a neutral adviser who assists the parties in reaching an agreement. The outcome of the mini trail is not binding unless an agreement is reached, committed to writing and signed;

• Mediation: (including Conciliation), a private and structured form of negotiation assisted by a third party that is initially non-binding. If settlement is reached it can become a legally binding contract;

• Neutral evaluation: a private and non-binding technique whereby a third party, usually legally qualified, gives an opinion on the likely outcome at trial as a basis for settlement discussions; opinion is non binding;

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ADR Techniques, cont’d (slide 2 of 2)

• Expert determination: a private process involving an independent expert with inquisitorial powers who can give a binding decision but it depends upon the terms of the contract;

• Adjudication: an expert is instructed to rule on a technical issue and the decision is binding until finally determined by arbitration, litigation or agreement;

• Arbitration: a formal, private and binding process where the dispute is resolved by the decision of a nominated third party. The arbitrator or arbitrators ‘awards’ are final and binding and enforceable in court with rights of appeal being limited and then only in respect of errors of law;

• Litigation; the odd one out!! The formal process whereby claims are taken through the civil courts and conducted in public. The judgments are binding on parties subject to rights of appeal.

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SUMMARY ... For discussion

1. Parties



4. Letters of Intent / Acceptance

5. Common Delays


7. Claim Document

8. Records & ADR

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The End … Thank you!