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05 Module III Slides

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15 views

05 Module III Slides

Uploaded by

Heri Triono
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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12/10/2020

Some examples of
unclear contract
drafting

“The Contractor shall carry out and complete the work


in accordance with the drawings and specification and
also to the satisfaction of the Employer.”

Better to say………

“The Contractor shall carry out and complete the work


in accordance with the drawings and specification.”

Because………

The Employer cannot impose a “satisfaction” level


above the contract requirement.

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12/10/2020

“The Contractor shall have free use of the hotel’s


telephone, electricity, water, toilet and car park facilities
at all times during the works.”

Better to say………

“The Contractor shall have free use of the hotel’s


telephone, electricity, water, toilet and car park facilities
at all times during the works, free of all charges (or at
cost, whichever is applicable).”

Because………

Use of facilities is not the same as free use of the


facilities.

“Liquidated damages shall be payable at the rate of


$50,000 per week or part thereof”

Better to say………

“Liquidated damages shall be payable at the rate of


$50,000 per week, and pro rata for every part week”

Because………

A Contractor who is ½ day late becomes liable for 1


week’s damages…….that would be a penalty as the
Employer has not incurred a 1 week loss of use.

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12/10/2020

“The Subcontractor is deemed to have had


sight of the main contract conditions.”

Better not to refer to the main contract


conditions………the subcontract conditions
should stand on their own.

Deleting all the extension of time clauses in a


contract means the Contractor does not get
an extension of time, but if the Employer
prevents the Contractor completing on time,
there will be no completion date anyway, as
time will be “at large”, the Contractor
completes within a reasonable time, and no
liquidated damages are applicable.

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12/10/2020

Deleting all the loss and expense clauses in a


contract means the Contractor does not get
paid loss and expense through the contract
but if the Employer causes the Contractor to
incur loss and expense, the Contractor can
sue the Employer anyway.

Intentions of the parties

Contractor’s obligations
Contract Administrator’s duties

Commencement and completion

Extension of contract period


Damages for non completion
Practical completion
Defects liability

Control of the works

Subcontracting
Contractor’s representative
Contract Administrator’s instructions
Variations

Payment

Progress payments and retention


Loss and expense
Final certificate

Insurance

Employer’s liability
Public liability
Contract works insurance

Termination

Settlement of disputes

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12/10/2020

Some “golden rules” when drafting contracts:

• Always be specific about what you want the


tenderer to do, to price for and to allow time for.
Also what you will provide for him, when, at cost
or free of charge?

• Keep it simple

• Avoid subjective phrases like “reasonable”,


“where practicable” or “where possible”.

• Avoid the use of non standard English terms like


“whereinbeforesaid”, hereinbefore, therefrom,
etc

“Draft me a watertight contract”

The Intercontinental Hotel wishes to carry out some minor alterations to


the conference centre.

The work will include some electrical alterations and also replacing the
floor and ceiling finishes. It is essential that the work is of the highest
quality and that minimal disturbance is caused to the running of the hotel.

The anticipated start date is February 1st 2021 with completion required by
August 10th 2021 in time for some pre booked conferences. The hotel has
a detailed list of the work they require to be carried out.

• Would you use a standard form of contract? If so,


which one?

• Lump sum? Remeasurement? Target Contract?


Management Contract? Design & Build?

• Assuming you are going to write a “bespoke”


contract instead of a standard form, what elements
would your contract need to address?

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