The Presentation and Settlement of Contractors' Claims - E2

Mark Hackett, Geoffrey Trickey

• Publisher: Routledge
• Year: 2002
• ISBN:
  9781135819576
• Edition: 1
• Topic: Jura
• Subtopic: Rechtstheorie & -praxis

Contractual disputes, often involving large sums of money, occur with increasing frequency in the construction industry. This book presents - in non-legal language - sound professional advice from a recognized expert in the field on the practical aspects of claims. This edition has been brought right up to date by taking into account legal decisions promulgated over the last 17 years, as well as reflecting the effect of current inflation on claims. The new edition is based on the 1998 JCT contract. *Fully updated second edition of this practical guide. *Worked examples to back up the advice offered and relate it to practitioners' experience.

Part 1

GENERAL

1

INTRODUCTION

1.1 INTRODUCTION	1.1.1–1.1.4
1.2 BUILDING CONTRACTS GENERALLY	1.2.1–1.2.16
1.3 BACKGROUND TO THE CONTENTS OF THIS BOOK	1.3.1–1.3.8

1.1 INTRODUCTION

1.1.1

For most clients, to have a building designed and erected is only a means to an end, not an end in itself. It is a means of expanding a manufacturing process, of housing staff, of solving housing problems, of operating an hotel or the like. Having finally made the decision to build, probably after months if not years of debate, clients are impatient for a result.

1.1.2

Generally, clients believe that their financial commitment is precisely established at the outset. They observe that, from an early stage of the design process, detailed estimates of time and money are given; changes in cost are monitored as the design is developed; tenders are usually called for on the basis of very detailed measurement and the rates for valuing any variations are established as part of the tendering process in advance of letting the contract. Against this background of care, inevitably purchased at the client’s expense, it must be bewildering to discover, as sometimes is the case, that progress on site has lapsed and there appears to be little that can be done about it; that the final cost and completion date are impossible to predict; and that the final settlement is arrived at out of exasperation rather than by evaluation. The cost plan may be based upon countless data from previous schemes, the Contract Bills measured against a precise set of rules, but the contractor’s claim is too often settled by going to war.

1.1.3

It is, therefore, the aim of this book to encourage a more systematic approach to the matter of claims. The first edition of this book was prepared based on the 1963 Edition of the JCT Standard Form of Building Contract; the 1980 Edition appeared shortly before the book went to print and was thus dealt with by comparing or contrasting it with the provisions of the 1963 Edition. In the present edition of this book, the Joint Contracts Tribunal Standard Form of Contract 1998 Edition Private With Quantities (incorporating Amendments 1 and 2) is the base; and is referred to as JCT 98 PWQ throughout. Later chapters contain comparisons with other forms of building contract so far as the subject of claims is concerned. Accordingly this book covers the forms of Building Contract set out in the following table.

1.1.4

The JCT 98 PWQ contract that is assumed is generally the With Quantities variant. Where the Without Quantities variant is referred to, the Specification or the Schedule of Rates will take the place of references in this book to the Contract Bills. However, before launching into the detail of these contracts it is necessary to make some general comments.

1.2 BUILDING CONTRACTS GENERALLY

1.2.1

One must look to four places to determine the rights and obligations of the parties to a Contract:

a) the terms of the Contract be they express and/or implied;

b) the findings of the Courts on relevant issues – this is referred to as Common Law;

c) statute, i.e. Acts of Parliament and the like; and

d) to a lesser extent, custom and trade usage.

1.2.2

It is beyond the scope of this book, and certainly beyond our competence, to become too involved in details of b) and c). However, as this book is planned to be a practical one in which solutions are offered, it is inevitable that we make judgments on what we believe to be the relevance of the rulings of the Courts where appropriate. We recognise that we run the risk of criticism from lawyers who understandably complain about the Quantity Surveyor’s predisposition to become amateurs in their field. However, it generally falls to the Quantity Surveyor to settle monetary matters under building contracts and this means that he must make a judgment on the interpretation of the terms in the Contract; he cannot put up every item on which there is a difference of view for a decision by an Adjudicator, Arbitrator or by the Courts. Thus there will be many views expressed in this book that can be challenged and there will almost certainly be areas that will be affected by future decisions of the Courts.

1.2.3

Being conscious of this potential for criticism, we have stated how we have arrived at our various conclusions, not because we believe the logic to be unchallengeable, but so that the reader may follow our reasoning and be better able, should he so choose, to disagree.

1.2.4

Before considering the wording in any form of contract in detail, it is necessary to determine the background of Common Law against which it operates and it is with some misgivings that we step into this minefield – particularly as it would seem that the Court of Appeal or the House of Lords keeps moving those mines whose location we thought had been determined. It may be useful, however, to consider what Common Law provisions might have applied, and in some instances still do apply, had not the Contract, signed by the parties, purported to have dealt with the matter.

1.2.5

We would add that the views expressed apply to the law of England and Wales; we have not ventured to consider the niceties of the different legal considerations that apply in Scotland.

1.2.6

As a general rule, the parties who have entered into a Contract will not lose their Common Law rights in any particular instance unless either:

a) the terms of the Contract clearly purport to cover fully such rights and Common Law rights are not specifically reserved; or

b) a term in a standard Contract which would have covered such rights has been deleted by agreement (Mottram Consultants Ltd -v- Bernard Sunley & Sons Ltd (1974) 2 BLR 28) (see para. 2.8.3).

As to a) above, it is to be noted that a party’s Common Law rights will only be excluded or limited if very clear words are used (see Billyack -v- Leyland Construction Ltd [1968] 1 All ER 783) or if the words are expressed to be exhaustive of all rights (as was the case with clause 44.4 of the Model Form MF/1 Conditions of Contract as decided in Strachan & Henshaw -v- Stein Industrie (UK) Ltd).

1.2.7

Where the Contract lays down clear rules of remedy any Common Law entitlement would generally be superseded, this being on the premiss that implied terms from Common Law will yield to express terms contained in the Contract. However, where the contract terms leave some ground uncovered, a Common Law remedy may still exist. Thus there may well be circumstances in which the Architect – or the Project Manager, as the case may be – cannot respond to an apparently legitimate claim from the Contractor in the absence of a specific provision in the Contract dealing with the matter, but the Contractor may still retain his Common Law entitlement.

1.2.8

Occasionally, a written contract will make clear the extent to which Common Law rights will prevail notwithstanding the written terms. For example, in JCT 98 PWQ, clause 26 lays down the procedures to be followed in the event of a fairly comprehensive list of causes of disruption due to the Employer’s act or default and it is suggested that the operation of this clause, if unqualified, might well have restricted the Common Law entitlement. However, clause 26.6 goes on to state that The provisions of clause 26 are without prejudice to any other rights and remedies which the Contractor may possess. This clearly gives the Contractor the opportunity of falling back on to his Common Law rights.

1.2.9

Conversely, the written terms of a contract can also be drafted so as to give one party a greater degree of protection than would be available to him at Common Law. Even so, the Architect, Quantity Surveyor or Project Manager, when exercising the powers conferred on them by the Contract, must act strictly in accordance with the terms of the relevant clauses. Simply because they are required to exercise a role often reserved for the courts, they cannot assume a general mantle of judicial responsibility.

1.2.10

Examples of this principle can be seen in clause 25 of JCT 98 PWQ which deals with extensions of time for completion, which in this form of contract, requires the Architect to fix a new Completion Date. The grounds for extension of time broadly cover not only the default of the Employer (for which a remedy exists at Common Law) but also cover events outside the control of both parties, e.g. exceptionally adverse weather conditions or delay by Statutory Authorities, neither of which would normally be grounds entertained by the Courts for an extension of time in the absence of an express provision. On the other hand, delay by the Employer in granting possession of the site on the date named in the Contract is a clear breach by him, but in JCT 98 PWQ (unless clause 23.1.2 is stated in the Contract Appendix to apply) it is not a ground for extension of time, so cannot be dealt with by the Architect.

1.2.11

The Articles of Agreement and Conditions of Contract do not contain all the obligations to be imposed upon the contractor. Many additional obligations and the specification of workmanship and materials will probably appear in the Contract Bills or Specification – and, beware, in Collateral Warranties. Thus, in considering the obligations of the parties to the contract, one must l...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• Preface
• Table of case law
• Table of statutes
• List of examples
• Part 1: General
• Part 2: Joint Contracts Tribunal Standard Form of Building Contract 1998 Edition Private With Quantities
• Part 3: Forms of Contract other than JCT 98 PWQ
• Part 4: Worked example of the Ascertainment of Direct Loss and/or Expense
• Index