Construction Contract Case Study

Superior Essays
Introduction
In construction sector, construction contract will be used. Inside the construction contract, there mainly including length of project, complexity, size of project, and the price that has been agreed. In the case Modern Engineering (Bristol) Ltd v. Gilbert-Ash Northern (1974) AC 689, it mentioned that construction contract is for selling goods, services, and labour, which is lump sum price payable by installment according to the work done. This shows that the contractor have obligation to the employer to finish the work on time as the length of project have been mentioned in the contract. However, the delay of the working process may not is contractor’s fault only. Employer’s fault or other external factors can also affect the
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Therefore, employer has to take action when this happened in order to claim the loss. The case Shawton Engineering Ltd v DGP International Ltd (2006) BLR 1 shows what should employer do and the contractor liability. Since it is breach of contract when the contractor delays the completion, the employer can issue notice for the contractor. The notice will not go into effect until the contractor delay the construction work. If the contractor is in breach of contract, the employer can terminate the contract or claim from contractor. It is very common practice to mention in the contract that what the damages in different period of time if the contractor fail to meet the completion date. This kind of damage is called liquidated damages. So, when the contractor fails to meet the completion date, he has this liability to compensate the employer since the employer already issue notice for …show more content…
The reason is that the employer maybe fails to fulfill some of the terms in the contract. This may delay the contractor working process. Variation is one of the reasons to cause delay. In common law, it mention that contractor have the liability to provide evidence to claim money. First of all, it has to prove that the work is extra and have not been included in the contract. Also, there should have terms promised by employer to pay for the work done. Moreover, the contractor can find any thing or agent that have authority to issue instruction for the completed work. Just like in the case Malloy v. Liebe (1910) 102 LT 616, employer asked contractor to do some work and then employer think that is included in the contract, but contractor do not think so. However, the judge mention that the work in this case is the variation, if employer continue want contractor carry out that work, employer need to pay contractor.

Except variation may make the contractor delay the working process, there is some other reason that may make contractor can meet the completion date. In clause 2.4 of JCT SBC, the employer must give contractor permission to go into the site on the date that have been stated in the contract. Otherwise, employer fails to let contractor to follow the obligation to work ‘regularly and diligently’. This will make contractor fail

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