N is for the Novation

By Suzannah Newboult

When a party is substituted for another party to contract and assumes the original party’s rights and/or obligations, it does so either by way of ‘novation’ or ‘assignment’. Party A contracts with Party B. Party C is substituted for Party B. The contract is now between Party A and Party C.

If the substitution has occurred by way of novation, then the original contract is effectively replaced by a new contract on the same terms as if the new party, (Party C in the example above) was party to the contract from the outset. [Read more…]

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5D BIM Could Radically Enhance Costing Process

By Marc Howe
The use of Building Information Modelling (BIM) could radically enhance the costing process following its expansion beyond quantities calculation and specifications data to other core areas of project management.

While BIM has thus far focused primarily on the use of digital representations of the physical and functional traits of a facility to guide both the design and construction processes, the next generation of BIM adds even greater functionality by providing advanced tools for estimating costs throughout a project’s life cycle. [Read more…]

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The effect of concurrent delay on an extension of time claim

Rebecca Evans, solicitor with Thomas Eggar LLP, reports on a case that offers good news for contractors in England.

A recent case, heard by Akenhead J in the Technology & Construction Court in London, has practical consequences for contractors: the effect of concurrent delay on an extension of time claim.

Walter Lily Company (WLC) was employed by DMW Developments Ltd (DMW) to construct a substantial house in the Boltons in London. DMW was the corporate vehicle for Mr and Mrs Mackay. The architects were Barrett Lloyd Davis Associates (BLDA). The work started in 2004 with the initial projected timeframe of 18-20 months. [Read more…]

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How to ensure payment by an overseas client

There are two considerations when trying to win payment from an overseas client.

Firstly, ‘Can the contractor enforce a judgment or monetary award in the country where the client is based?’ And secondly, ‘Where are the overseas client’s chargeable assets?’ [Read more…]

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Interview with: Shuja Zaidi, Vice President Projects – KSA, Hilton Worldwide

 Becoming an Early Entrant into a Hotel Market

“Many hotel developers are usually behind the wave when it comes to exploring future potential,” says Shuja Zaidi, Vice President Projects – KSA, Hilton Worldwide. “By the time they jump in to take advantage of a booming city and actually complete the project, the market may be already saturated,” he goes on to say. [Read more…]

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RECORDS, RECORD, RECORDS – importance for contract claim

Contract Requirements

Max Abrahamson in his book Engineering Law and The ICE Contract wrote

” A party to a dispute, particularly if there is an arbitration will learn three lessons (often too late) the importance of records, the importance of records and the importance of records”. This quotation came to mind recently when I read the judgement in the case of Attorney General for the Falkland islands v Gordon Forbes construction (Falklands) Limited. A contract was let for the construction of the infrastructure of the East Stanley Housing Development in the Falkland Islands using the FIDIC 4th Editions conditions. These conditions, like most standard forms, provide a procedure which requires the contractor to follow in the event of him submitting a claim. [Read more…]

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Projects & Pitfalls – Sports, Water, Energy & FIDIC

By Mohan Pillay

The inaugural Youth Olympic Games hosted by Singapore in August last year left a positive impression on Singapore’s young guests. The fanfare would have been much bigger had the Singapore Sports Hub been available for the event.

At an estimated cost of S$1.33 billion, the new Sports Hub will boast a 55,000-seater retractable roof stadium, a 6,000-capacity Indoor Aquatic Centre, a 3,000-capacity Multi-Purpose Arena and a Water Sports Centre. [Read more…]

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FIDIC Red Book – A hiccup?

By Mohan R Pillay

In a rare decision, the Singapore High Court in PT Perusahaan Gas Negara (“PGN”) v CRW Joint Operation (“CRW”) [2010] 4 SLR 672 refused to uphold an ICC arbitration award arising from a contract using the FIDIC Red Book 1999 Edition.

[Read more…]

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The Cost of Quality

Building quality steps in the schedule adds a certain amount of effort and cost to the project. However, these incremental costs will be rewarded with shorter timelines and reduced costs throughout the life cycle of the solution. Examples of the cost of quality include: [Read more…]

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GUARANTEED MAXIMUM PRICE CONSTRUCTION CONTRACT: FACT OR FICTION?

No Increases Allowed

The term guaranteed maximum price when applied to a construction contract provides for the employer a nice feeling of security. He of she when entering into a contract of this nature is convinced that no matter what happens the final cost will not be above the maximum and there is a fair chance it could be lower. Any design changes which results from the specific instructions of the employer would understandably fall outside the guaranteed price. Guaranteed maximum price contracts have been with us for many years. IDC a Stratford on Avon construction company who pioneered design and construct contracts some twenty five or thirty years ago promoted their contracts as guaranteed maximum price. It is a good selling point which can be persuasive. [Read more…]

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