Why is Amicable Settlement a Part of Contractual Machinery?

By Dr. Chandana Jayalath
Disputes occur when parties fail to address conflicts of their interests as they often attempt to find solutions within the bounds of the contract where the rights and obligations are typically set out. Forgetting the fact that contracts are not ‘water proofed’, parties tend to limit their scope of thinking within the hard bound copies. The reality is that contracts do not operate in a vacuum. A contract that caters to all eventualities is indeed rare, so that parties will have to turn to another side, willingly or unwillingly, for a settlement. This is why negotiation has become a day to day phenomenon. [Read more…]

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Pros and Cons in Subletting, Designation, Assignment, Nomination and Novation in Construction Contracts

By Dr. Chandana Jayalath
Sub letting reduces dependency on directly employed labour. It results non-wage cost of employment such as redundancy payment and offsets the risk associated with the responsibility by transferring them. Sub letting is necessary when to employ specialists of proven reliability and repute to face technical complexity involved in a project. There are two distinctly different modes of sub letting that everyone is known to; domestic and nominated. [Read more…]

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Dealing with Consequential Losses

By: Dr. Chandana Jayalath

Losses can be recovered under two limbs namely the losses arise naturally, according to the usual course of things, as the result of the breach (first limb); or the losses that were contemplated by the parties, at the time the parties made the contract, as being the probable result of the breach (second limb). Consequential loss in construction contracts is equated with the second limb, as they are often be specified clearly in writing, such as payments to consultants during penalty period. [Read more…]

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Standard Form Construction Contracts – Friend or Foe?

By Sachin Kerur and George Varma

The UAE construction sector is a continually developing market with complex transactions becoming increasingly prevalent. The evolution of the construction sector has highlighted the need for more robust construction contracts that deal with all the relevant risk issues for a project. [Read more…]

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Successful subcontracting – Part 2

By Sachin Kerur and William Marshall

In Part 1 of this two part subcontracting series, we detailed some tips and traps with respect to subcontracting, and considered the criticality of successful subcontractor performance to the timely and on budget delivery of projects. In Part 2 below, we examine the risks of pro-forma subcontracts and back-to-back drafting and briefly touch on the benefits of bespoke drafted subcontracts. [Read more…]

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Successful subcontracting – Part 1

By Sachin Kerur and William Marshall

Since Adam Smith first set his mind to the efficiency of the pin factory in 1776, specialisation and division of labour has underpinned industrial development. The construction industry has embraced specialisation and division of labour to such a degree that almost every construction project, no matter how large or small, is delivered in practice by a large number of separate parties, each with a narrow field of expertise and each with a commercial and practical imperative to maximise the efficiency within their field of expertise. [Read more…]

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Latest Draft of UAE Federal Arbitration Law Released

By Patrick Bourke and Adam Vause

The most recent draft of the much anticipated UAE Federal Law in respect of Arbitration (the Draft Law) was released on 16 February 2012. The Draft Law represents the UAE’s proposed updating of its legislation in order to, among other goals, comply with its accession to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) in 2006. Although the Federal Arbitration Law remains pending, this latest release demonstrates a positive step towards such a law coming into force and its contents should be considered when drafting arbitration clauses where the dispute could involve the UAE. [Read more…]

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Exhibit Leadership on Challenging Projects

Project managers need to be leaders. Leadership can be easy when things are going well; everyone will follow you then. However, when times are tough, leadership can be hard, but it is also more vital than ever. Here are some things to keep in mind to lead your team through the difficulty.

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Contractor cannot rely upon the prevention principle

The Technology and Construction Court has thrown out a contractor’s attempt to rely upon the prevention principle to excuse the delay on a project. The contractor alleged that the delays had been caused by the employer and the statutory undertakers. [Read more…]

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Rights and Obligations under Back-to-Back Contracts

The parties’ dispute concerned the extent of the coverage of this alternative design for demolition and hoarding works. The letter of award for the subcontract stated that it was to be a lump sum fixed price contract and back-to-back with the main contract. Brington maintained that Cheerise was responsible for the design as this was a back-to-back contract. [Read more…]

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