Lessons for GCC on concurrent delay

By David Johnston

DELAYS on engineering and construction projects are almost inevitable; the more complex the project, the more likely the prospect of delay, and the more chance of two or more delays occurring at or around the same time.

Where the contractor is culpable for the delay, for example, rectifying its own defective workmanship, it is usually not entitled to an extension of time. However, where an employer-caused delay occurs concurrently with the contractor’s culpable delay – for example, where the employer has instructed a variation, and assuming that each of these events is of approximately equal significance – is the contractor now entitled to an extension of time?

Various legal jurisdictions have struggled with this question and come to different positions. Some of these positions are set out in this article, as are some suggestions as to how this debate should inform approaches taken by employers to concurrent delay on construction projects in the GCC.
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Termination for Construction Contracts

By Heba Osman
A common scenario: the Employer is not happy with the Contractor’s performance, whether because of failure to perform the works in the manner provided for in the Contract or because of some other breach of the Contract. The Employer picks up the Contract, which – in the UAE – is usually some modified FIDIC standard form, in search of the termination provision. Most such termination provisions require the Employer to send the Contractor a notice to correct the failure or the breach within a specified period. If the Contractor fails to correct the breach, then the Employer becomes entitled to terminate the Contract. The Employer, feeling confident of its legal position, sends the termination notice. The Employer is satisfied that it has correctly terminated the contract.
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Draft hybrid contract with care

By Martin Preston

TYPICALLY, the contract price under a construction contract will either be a lump sum or cost reimbursable.

Under a lump sum contract, the contractor is required to provide a fixed price for carrying out and completing the scope of work. The risk that the cost of completing the works is more than the lump sum price sits with the contractor, who will only be entitled to be paid more than the lump sum price if the employer varies the scope of the works or delays or obstructs the contractor in carrying out the works. [Read more…]

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Closer look at fitness for purpose

By David Johnston

ONE of the issues that most vexes construction lawyers is that of the standard of care the contractor owes to the employer, that is the degree of skill and caution which the contractor must exercise under the building contract.

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Six Ways to Develop Your Project Team

Regardless of how a project team gets assigned, the project manager needs to make sure that the team members have the right skills to complete their assigned tasks. In fact, if the team members do not have all the right skills and the project manager cannot help them acquire the skills, the project would appear to be at risk.
This does not always mean sending a person to class. There are many other learning events that can help, including:
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FIDIC Returns to America

To help you make the most of their suite of contracts, FIDIC is returning to the Americas for the 2nd FIDIC Americas Contract Users’ conferencethe region’s only event that’s officially endorsed by the association. [Read more…]

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Learn About Earned Value Management (EVM)

Have you ever been asked how far along you were on a project? Of course you have. If you do not have a valid schedule, or if you are not keeping the schedule up-to-date, you know that your answer is pretty much a guess. If you have a good schedule and you are keeping it up-to-date, you should have a sense for how much work is remaining and what the projected end-date is. But are you 50% complete? Or 90% complete? It is not always easy to know.

Earned value metrics were established to remove the guess work from determining where you are at in relation to a baseline. Using it allows a project manager to know precisely how far along he is, how much work is remaining, what the expected cost will be, and all sorts of other interesting information. [Read more…]

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Reform Of Expert Evidence In UAE Court Proceedings

by Nassif BouMalhab and Susie Abdel-Nabi
Recent changes to the legal framework regulating court appointed experts will result in improvements in the quality of commercial dispute resolution and, with it, improve investor confidence and the commercial certainty that businesses require.

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Managing Payment Delays on International Construction Projects

(The following outline was used in a presentation to the Overseas Construction Association of Japan, Inc. (OCAJI) The Dynamics of Payment

As a construction project moves toward completion, the Contractor loses leverage, and the Employer gains leverage.

This is based on the reality that the Contractor builds the project, and the Employer simply pays money. As the project nears completion, the Contractor has less leverage because the Employer is close to obtaining what he bargained for – a completed project. This is the time when the Employer will be inclined to suspend or reduce payments to the Contractor, not early in the Project.  [Read more…]

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Consultants’ Fee Claims To Be Time-Barred in the UAE

By Michael Grose

As the fifth anniversary of the onset of the financial crisis approaches, engineers, architects and other consultants to the construction industry should be aware of the potential risk that this unhappy anniversary presents to any remaining fee claims. Whilst any expectation of payment at this late stage is likely to be low, any optimism that early signs of returning confidence might provide a chance to cash in old debts should take into account one of the more obscure time limits applicable under UAE Laws. [Read more…]

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