Delay and extensions of time in construction contracts

Delay – what is the common law position? Why is a completion date needed?
If no agreement is reached on the time within which a service must be performed, it only needs to be performed within a reasonable time. Whilst this may be workable in the context of, say, a contract for the delivery of a new washing machine, it is not satisfactory when applied to something as complex as a construction project. [Read more…]

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Liquidated damages clauses in construction contracts

Most forms of building contract include a clause entitling the Client to a specified level of damages, referred to as “Liquidated Damages” or “Liquidated and Ascertained Damages” if the Contractor is late in handing over the building. LADs replace the Client’s common law right to damages for late completion with a contractual right to a pre-determined sum for the period of delay. [Read more…]

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Techniques to Manage your Schedule

Don’t Manage by Percent Complete

Most project management scheduling tools have a field for entering the percentage complete for each activity. Before an activity starts, it is 0% complete. When it is finished, it is 100% complete. However, in between can be tricky. On the surface, if a team member were 20 hours into a 40 hour activity, you would say he is 50% complete. But is he? He may be close to done, or he may be only 10% done.

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Governance is Needed to Enforce Organizational Standards and Policies

Governance is the term used to describe the formal and informal set of processes that allow organizations to resolve conflicts, make decisions and ensure management decisions and policies are enforced through the management hierarchy. Governance is a top-down management process and works as follows: [Read more…]

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Manage the Schedule / Techniques

Investigate Further When ‘Completed’ Deliverables Are Not Really Completed

Sometimes a team member says that a deliverable is complete when in reality it is not quite done. This can happen if a deliverable is ’completed’ by the team member but not approved. The team member may say the work is complete, but when the deliverable is checked it is discovered that it is incomplete or needs additional follow-up work. [Read more…]

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Turnkey Contracts

By Chris Wilcock
Managing complex disputes can be difficult. The recently-reported Australian case of Alstom v Yokogawa1 highlights how it can go horribly wrong. In March 2002, Alstom entered into a ‘turnkey’ contract with FPP as the owner. Alstom agreed to refurbish an ageing power station to meet a performance specification. The contract sum was AU$148m. There were staged completion requirements and significant delay damages. [Read more…]

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Interpreting legal terms

By HUGH MURRAY and Joanne Emerson Taqi

THE use of some legal phrases in contract documentation or correspondence is considered, by most, as commonplace. However, it is important to ensure that such phrases are properly understood.
Misunderstanding such terminology, particularly when the interpretation of some key terms can differ depending on whether the words are in a document governed by English law or by another law, can potentially affect the efficacy of the commercial bargain. [Read more…]

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Procurement in Abu Dhabi

By KATIE LISZKA and NAZLI OKUSLUK

ABU DHABI Law No 6 of 2008 (procurement law), which governs the procurement of materials, service contracts and works contracts in the Emirate of Abu Dhabi, aims to decentralise, modernise, simplify and facilitate procurement by government departments. It grants the Department of Finance the authority to issue a manual to execute the provisions of the law, pursuant to which the department issued the Purchases, Tenders and Bids Manual in 2008 (manual). This manual sets out provisions, policies and procedures in respect of tenders for purchasing materials, services contracts and executing works and bids, in addition to the terms and policies related to electronic tenders and purchases.ScopeWithout prejudice to the provisions of Law No 21 of 2006 regarding construction contracts and agreements in the field of civil works, the procurement law and the manual are in principle applicable to all government departments and agencies funded under the general budget of Abu Dhabi and apply to all contracts, except for the following:

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Estimate the Project Work Before Gathering Detailed Requirements

There is concern from many project managers that they are expected to present a detailed estimate of the project work when the charter and schedule are created. However, the detailed requirements have not been gathered yet. So how are you supposed to estimate the work without having captured the detailed requirements? It seems like a valid question. Yet, when you talk about gathering detailed requirements, you are usually talking about the Analysts Phase of a project lifecycle, not the up-front project management work of defining and planning the project.  [Read more…]

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JCT and ICE Payment Certificates under Scrutiny

The Process

The Certification process in the construction industry has been in place for many a long year and is an integral part of both building and civil engineering. It involves client, consultant, main contractor and subcontractor alike. The very existence of large numbers of companies who make their living in the construction industry depend upon the certification process. On many standard forms of main contract the contractor is entitled to be paid the sum which is certified by the Architect, Engineer or Contract Administrator. Main contractors in an effort to ensure that they do not finish up paying out more than they receive link the payment under the subcontract to the amount certified under the main contract. [Read more…]

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