The Supreme Court has for the first time interpreted the provisions on the pricing of change orders in the most widely used Swiss standard form contract, the SIA Norm 118. But the decision also has wider ramifications for Swiss law construction contracts. It makes clear that it should be assumed that parties to a lump-sum contract intended to contractually regulate the effect on the contract price of a unilateral change order, even if the terms of the contract are ambiguous.
The Court of Appeal recently considered whether a pay-when-paid clause in a construction contract is void under the Construction Industry Payment and Adjudication Act. It found that pay-when-paid clauses under a construction contract drawn up before the enactment of the Construction Industry Payment and Adjudication Act will remain valid and not be affected by the introduction of Section 35, which prohibits any conditional payment clauses in construction contracts.
A recent judgment has provided an important clarification in relation to the issue of 'smash and grab' adjudications and will likely be welcomed by the construction industry. Contrary to previous judgments, the court held that it is possible for a paying party to adjudicate on the 'true value' of an interim application in circumstances where no payment or pay less notices were given and there has been a successful smash and grab adjudication.
Construction lawyers are frequently called on to draft or interpret extension of time clauses. But the questions of what should be in these clauses, and why they are typically included in construction contracts in the first place, receive little attention. When drafting an extension of time clause, parties will want to carefully consider whether and how to address a number of specific issues.
The Federal Court recently dealt with three broad issues under the Construction Industry Payment and Adjudication Act – namely, jurisdictional challenge, the exclusion of defences and the setting aside and staying of decisions. The decision has broad repercussions for the way that adjudications are conducted in Malaysia.
Swiss courts and arbitrators have addressed the interface between force majeure clauses and regulatory changes, and how they impact on the contractor's entitlements. Clauses addressing unforeseen circumstances will be construed in line with the parties' actual intentions. If they cannot be established from the text and surrounding circumstances and evidence, the tribunal will construe the clause objectively, regarding how it can be understood in good faith.
Employers should keep a watchful eye on contractor variations and ensure that they do not modify any important quality or original requirements specified in the contract. Whatever the length of the contract, the employer is duty bound to notify any deviation from the contract on final inspection. However, the courts will not protect a contractor which has fraudulently concealed a defect or prevented the employer from discovering a defect.
Anyone watching what has happened recently in Houston and Florida will immediately think about the safety and wellbeing of those affected by Hurricanes Harvey and Irma. Once the aftermath of destruction is assessed, both areas and their residents will be looking at a long road to recovery. Among the many coming challenges, owners and contractors of existing projects must take steps to assess the effects and identify their contractual rights and obligations.
In a recent shipping case, the Supreme Court decided by a three-to-two majority that under the applicable co-insurance scheme, the owners had no claim against the charterers, regardless of whether the insurance monies had been paid. The decision has implications for the construction industry, where this co-insurance arrangement often arises, as it could protect subcontractors which cause a loss insured under a joint names contractors' all-risks policy from a claim advanced by insurers.
The High Court recently held that a hotel developer which resisted enforcement of an adjudicator's decision, claiming that there had been a breach of the rules of natural justice, had waived its right to challenge the decision when it previously invited the adjudicator to exercise powers under the slip rule. The court noted that unless there is an express reservation of rights, decisions must be either wholly accepted or wholly contested.
A new draft international standard providing information management guidance when using building information modelling has been issued for public comment. The standard is split into two parts. The first part deals with concepts and principles and applies to the whole lifecycle of a built asset, while the second deals with the delivery phase of assets and enables the client or appointing organisation to establish its requirements for information during the delivery phase of assets.
A recent case highlighted that, because Section 107 has been "unthinkingly repealed", adjudicators must deal with entirely oral contracts and all of the uncertainty and contention that they can involve. Further, in such cases, even if an adjudicator finds an oral contract, the responding party is likely to obtain permission to defend the claim on enforcement, because only rarely will a disputed oral agreement be the subject of a successful summary judgment application.
The 2012 Construction Common Minimum Standards for the Built Environment have been updated. The document introduces no additional standards, instead summarising existing government policy and relevant standards intended to represent the minimum normal threshold for the application of existing government policies.
The Construction Industry Payment and Adjudication Act 2012 came into effect on April 15 2014. Since then, the Malaysian courts have had the opportunity to consider various aspects of the act on numerous occasions. Some significant decisions have been handed down by the courts in the past two-and-a-half years and although statutory adjudication in Malaysia is still in its infancy, it is evident that a body of local decisions is steadily being built up to assist in the interpretation of the act.
Another wave of Joint Contract Tribunal 2016 contracts has arrived. The Framework Agreement, the Major Project Construction Contract, the Major Project Construction Sub-contract, the Measured Term Contract and the Prime Cost Building Contract each come with a separate guide. Further, the Constructing Excellence Contract, the Constructing Excellence Contract Project Team Agreement and the Pre-Construction Services Agreement (General Contractor), among others, have been released.
The construction industry has long accepted that the New York scaffold law imposes strict liability on construction contractors and property owners for injuries suffered by workers who fall or are hit by a falling object as a result of inadequate scaffolding or similar construction structures. A recent decision by the New York Court of Appeals indicates that this common understanding is wrong.
The Third Circuit Court of Appeals recently filed an opinion regarding whether the filing of a mechanic's lien after the commencement of a bankruptcy case violated the automatic stay. Given the frequent involvement of many companies in Delaware bankruptcy cases, the Third Circuit's ruling is important.
If an adjudicator's decision is within his or her jurisdiction and broadly in accordance with the natural justice rules, it will be enforced. However, there are two narrow exceptions: where there is an admitted error which the court can correct; and where a case involves the proper timing, categorisation or description of a payment application or notice, or payless notice.
In a recent case before a Scottish court, an adjudicator made a mistake in the calculations in his decision. The slip rule introduced in the amended Scheme for Construction Contracts allows for the correction of "a clerical or typographical error arising by accident or omission", but the court ruled that it did not apply in this case. However, could a similar slip rule be implied and, if so, would it permit the inclusion of the items that had been left out?
The Construction Industry Council has produced a new User's Guide to Adjudication to replace the Construction Umbrella Bodies Adjudication Task Group's 2003 version. The updated guide provides a general introduction to adjudication in the context of construction contracts.