Posts Tagged ‘termination’

When is it safe to terminate under a contract?

by Vincent Connor

Volcanoes – we have rather a lot of them in Asia, but even we’ve been obsessing about the infamous Icelandic one, this week. Though 6000 or more miles away from the action, Japanese car manufacturers relying on components from Ireland and Korean mobile phone suppliers ready to send their wireless wares to a waiting world, have been among those frustrated as the volcanic ash cloud has choked airfreight routes. Which got me thinking…not so much about force majeure (I’ll leave that to my holidaying partners examining their insurance documents to seek support for their compensation claims!) but about the options a contracting party faces when the party with whom he’s entered into an agreement has breached a material provision (say, a delivery date): should he accept that party’s repudiation and sue for damages or simply terminate it in accordance with the procedure provided for in the agreement? (Read more..)

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When is a Termination not a Termination?

by Sarah Thomas

Answer: when it’s an affirmation. Consider the questions which Shell raised in an appeal case recently decided by the High Court (commented on by Connor in his last post): (Read more..)

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FIDIC’S FOUR NEW STANDARD FORMS OF CONTRACT: Risks, Force Majeure and Termination

 By Christopher R. Seppala

I propose briefly to discuss five topics in the three new Books for major works (the new Construction Contract, the Plant Contract and the EPC Contract), as follows:

 (1) Contractor’s risk and “Employer’s Risks”,

(2) Indemnities,

(3) Limitation of Liability,

(4) The New Force Majeure Clause, and

(5) Grounds and Procedure for Termination of the Contract by the Employer and the Contractor. (Read more..)

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GCC in catch-22 over FIDIC forms

The Fidic form of contracts has been in the Middle East since the 1970s, yet it is far from popular. Adam Webster looks at legal issues that should be borne in mind when negotiating Fidic-based contracts.
THE legal systems of the Middle East are founded upon civil law principles (most heavily influenced by Egyptian law, which is itself based on the Napoleonic Code) and Islamic Shariah law – the latter constituting the guiding principle and source of law. (Read more..)

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Be careful when you terminate a contract

In the current economic climate, there is growing interest in whether a contract can be cancelled, if one party is no longer able to fulfil its obligations due to financial difficulties.

A basic principle of contract law is that the contracting parties must perform their obligations with good faith and in a manner consistent with the contract. However, subject to this basic principle, a party to a contract that is subject to UAE law, can seek to end the contract in one of three ways: (Read more..)

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Surviving the Slowdown: A Current Analysis of the UAE Construction Industry

by Omar Al Saadoon

The title of this article does not suggest the fear of stakeholders in the construction industry in the UAE or any other country affected by the global downturn is wholly irrational. No, on the contrary, the fact the UAE is currently experiencing a dramatic and unprecedented slowdown in its construction industry (which apparently accounts in part for Dubai’s first budget deficit in 2009) is symptomatic of the global fear of the instability of global financial markets and the ability of banks to lend to the public and each other. It is difficult to guage the actual effect of the downturn on the local construction industry given the UAE does not publish its GDP date on a quarterly basis. (Read more..)

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Resolving the issues with FIDIC

by Joe Colgan

In his second article, Joe Colgan, senior project manager, EC Harris, follows up on the problems associated with FIDIC’s nomination clause.

FIDIC ‘99 provides for a right of objection under Clause 5.2 that is conditional upon the contractor’s receipt of an indemnity from the proposed nominated entity. (Read more..)

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Contractors must check the fine print

Amid the current global financial crisis, the construction market has seen a downturn, exposing contractors to risks. JONATHAN BRUFAL* discusses crucial issues contractors might face if the contracted party calls for a change in terms. (Read more..)

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Dithering trends in case of suspension or termination

by Antonios Dimitracopoulos
As a result of the termination or indefinite suspension of projects en masse, over the last two to three months, irate contractors were seeking urgent advice from their lawyers on their legal position, as well as on the process and cost of dispute resolution options. (Read more..)

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Termination of the contract

by Dennis Brand
For termination of a contract due to default by the Contractor, FIDIC 4th Edition provides remedies for the employer in Clause 63.1 which, save for a fairly common provision relating to the contractor’s bankruptcy, liquidation or dissolution, requires a certificate to be issued by the engineer stating (a) that the contractor has repudiated the contract, or (b) without reasonable excuse has failed to commence or proceed with the works following a 28-day notice, or (c) has failed to comply with a specific notice or instruction concerning rejection and/or removal of improper work, materials or plant, or (d) despite previous warning from the engineer, is neglecting to comply with any of the contractor’s obligations, or (e) has contravened the provisions of the contract related to sub-contracting, in which case, upon the employer giving 14 days’ notice to the contractor, may enter upon the site and terminate the contract. (Read more..)

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