BNV7127 Construction Law and Contract Assessment Help
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You are required to use the scenario presented below as the basis for providing your report for coursework 1
ASSESSMENT SCENARIO
You are one of two senior quantity surveyors working in a main contractor organisation, Ceylon Constructions (Private) Limited. Ceylon Constructions (Private) Limited is a multi-national company based in the United Kingdom (UK). Your director has requested for advice on a number of issues the company is faced with, on a proposed urban housing project. The history and current situation of the project is provided below.
HomeLands Group, a developer (herein referred to as the client), is embarking on developing a housing scheme in Southampton. The project is to be completed before December 2022.
The client requests your company to come up with the designs required for the project. Notwithstanding the fact that there is a design team in your company, your company has decided to obtain the consultancy services of Premium Designs Limited, which is a leading design firm in the UK. Premium Designs Limited quote a figure of GBP 8,000 for the services to be provided. Your director informs this figure to the client who agrees to pay for the same. Furthermore, you have been requested to be a part of the design team to be able to provide the client with early cost advice. Premium Designs Limited completes and submits all the designs requested before 3 months of the agreed deadline. They have now sent you an invoice of GBP 10,000. When your director inquires as to why there has been an increase of the cost, Premium Designs Limited has replied stating that Premium Designs Limited completed the designs 3 months ahead of the deadline and that both your company and the client will get the resulting benefit so that the project could be completed sooner. Your director has informed the amended rate to the client who has declined to pay the same. The client is only willing to pay GBP 8,000 as initially agreed and has expressed that the client never wanted the designs to be completed in advance of the deadline.
However, using the designs provided, your company commences the construction work. You have been entrusted with the task of supervising the purchase of all the building materials required for the project. Your director instructs that you get all the building materials from Phoenix Limited which your company has been dealing with for certain other projects as well. In early February 2022, you send Phoenix Limited an email specifying the details of materials that you wish to purchase. On the 15th of February 2022, Phoenix Limited replies to you with a quotation for all the items requested. You forget to reply to this mail, but you forward the mail to your director who approves the payment for the same. However, due to the pandemic, the finance team of your company takes 1 month to raise a purchase order and to despatch the advance payment to Phoenix Limited. Phoenix Limited has now sent an email saying that all the prices have gone up in the market and therefore the company is not in a position supply the building materials at the price mentioned before and has attached a new quotation which specifies a 20% price increase compared to the previous quotation. Your director informs you that a contract was made between the parties and that Phoenix Limited is bound to supply the materials at the previously quoted price. You inform the same to Phoenix Limited via email and Phoenix Limited has written back to you indicating that you never accepted the quotation that was sent on 15th of February 2022 and that the quotation clearly stated that “The prices quoted are only valid for 14 days”. You re-check the quotation sent by Phoenix Limited and find out that such a clause is indeed mentioned.
However, you acquire the building materials required for the initial phase from another supplier and the construction work begin. While the construction of the housing scheme is in progress, your company decides to employ a sub-contractor to be in charge of all the mechanical and electrical work of the project. You suggest “iWire Limited” for this as it has worked with you for a few other personal projects you handled before joining Ceylon Construction (Private) Limited. Your director approves this proposal and iWire is appointed as a sub-contractor. Based on the relationship you have, iWire Limited immediately starts work without a written contract. You then insist that a formal contract be signed between the parties, but iWire is of the opinion that no such contract is required as you have worked with them before and the mutual understanding between the parties is sufficient.
Given the above scenarios, to ensure everything proceeds well (contractually) with the project, your director has requested that you advise the management team on the way forward taking into consideration the need to get the project completed in time and to avoid any unnecessary legal complications. Based on your knowledge of contract (formation and selection) and health and safety, you are required to produce a report advising your director on the issues presented.
Your advice is expected to cover five main areas:
1. Whether your company is bound to pay the revised figure of GBP 10,000 to Premium Designs Limited.
2. Whether you can argue that a contract had been formed between your company and Phoenix Limited relating to the first batch of building materials. If you can conclude that a contract had been made, is Phoenix Limited bound to provide building materials to your company at the previous rates?
3. What are the risks of proceeding with iWire Limited without a contract? To mitigate such risks, what are the appropriate factors to consider in selecting a form of contract for a sub-contractor such as iWire Limited?
4. As part of your report, you are required to advise the management on the importance of having a written contract for construction works, and the likely impact of that on the three main criteria for measuring project performance: time, quality and cost.
5. Executing construction works come with many health and safety implications. For this reason, legislation such as the CDM 2015 have specific requirements that parties involved in construction projects should meet. Prepare a short report to your director outlining some of the key requirements for health and safety on a project of this nature. You should highlight any specific issues which may be relevant to a housing scheme project.
You are required to use the scenario presented below as the basis for providing your report for coursework 2.
ASSESSMENT SCENARIO
Heavy Duty Generators (Private) Limited is engaged in the business of manufacture and sale of heavy-duty industrial generators and has its headquarters in Central London. The company intends to construct a six storeyed building at Derby in Derbyshire to expand its commercial activities. The building should be designed and constructed to meet the following requirements:
Ground floor – showroom and customer lounge
1st floor – generator testing area
2nd and 3rd floors – storerooms
4th and 5th floors – office space
The company has appointed you as the Project Manager for the aforesaid construction and the Board of Directors seek your professional advice on the following matters before awarding the tender to a contractor.
A. (i) The building should be “fit for the purpose” and accordingly the 1st floor should withstand heavy vibrations.
a. Is it advisable to leave it to the contractor to select the materials or to specify the materials by the company? Analyse the legal implications in these two situations.
b. Advise whether it is appropriate to use JCT standard forms of contract or NEC suite of contracts, nature of liability of the contractor in case the work is found to be defective and the impact of statutory laws.
(ii) Advise on the company’s obligation for payment and the matters to be taken into consideration when including payment provisions in the contract.
Assume thar your company decided to award the tender to Ceylon Constructions (Private) Limited as the main contractor for the project and the construction work began on 31st of October 2021. The project is to be completed by the 31st of December 2022. The Board of Directors seek your further advice regarding the following situations which have arisen in relation to the construction work:
B. On the 20th of January 2022, while the scaffoldings required for the construction were being erected, one of the iron bars slipped off the boundary wall and hit Simon, a pedestrian who was walking on the adjoining road of the construction site. As a result of this accident, Simon sustained serious injuries and was immediately taken to hospital. He spent 2 months in the hospital and returned home with his right hand amputated. Simon has now sent a letter of demand to your company claiming damages amounting to GBP 80,000 for hospital charges, loss of income from employment for a period of 2 months and loss of future prospects of employment. You have been informed that warning signs were clearly placed on the road pavement warning any passer-by of “Falling object risk, watch overhead at all times”, and therefore that the company is not liable to pay damages Simon.
You are requested to advise the liability of the company with regard to Simon’s claim.
C. It has been brought to your notice that Ceylon Constructions (Private) Limited (the main contractor) has failed to comply with the time limits in relation to certain stages of partial completion of the project. Accordingly, when the main contractor produced the invoices for interim payments, your company has insisted that the Liquidated and Ascertained Damages (LADs) due to your company on the said delays should be deducted as per the agreed terms of the contract. The main contractor’s position is that they have serious cashflow issues resulting from the Covid-19 pandemic and if your company is insisting on the recovery of said LADs, they will be compelled to suspend construction work completely. There are no agreed provisions by the parties in the contract in relation to dispute resolution. The Board of Directors is concerned that this dispute will cause a significant delay in the whole project and wishes to resolve this dispute through a method of alternative dispute resolution (ADR).
You are requested to prepare a report explaining two (2) possible ADR mechanisms which would best address the given situation, analysing their relative advantages and disadvantages.
D. Due to the reasons set out above, it seems that the project will suffer serious delays. Prepare a report identifying the different types of delay and explain the most appropriate delay analysis method to determine the net delay of the project.
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