Standard forms: JCT 2005, NEC3 and the Virtual ... - Fenwick Elliott

Standard forms: JCT 2005, NEC3 and the Virtual Contract
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liquidated damages were irrecoverable as the completion date could not be identified as
time had become “at large”.
However, Jackson J in Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No.
2). 22 did not accept that Gaymark represented English law and instead considered that a
notice must be provided. The case of City Inn Ltd v Shepherd Construction Ltd. 23 adopted
the same approach, although in the third and final judgment the Judge accepted that the
right had been waived by the employer because the lack of notice had not been initially
relied upon by the architect.
Finally, the contractor may be able to rely upon the equitable principles of waiver and/or
estoppel. It may be that the contractor does not serve a formal notice because, by words
or conduct, the employer or indeed the project manager represents that they will not rely
upon the strict eight week notice period. The contractor would also need to show that
the contractor relied upon that representation and that it would now be inequitable to
allow the employer to act inconsistently with the representation made by the employer
or project manager. In addition, this approach could be further supported by core clause
10.1 which requires the parties to act “in a spirit of mutual trust and co-operation”.
Clause 63 provides that changes to the price as a result of the compensation event are
assessed by reference to the actual Defined Cost of the work already done, forecast
Defined Cost of the work to be done, and any resulting fees. 24 It is the project manager
that assesses compensation events. In the event of a disagreement, then disputes may
be referred to an adjudicator.
FIDIC
FIDIC is the Federation International Des Ingenieurs-Conseils. It is an association of
national associations of engineers, which formed in 1913. Its headquarters are in
Switzerland.
The first edition of the FIDIC form was produced from the ICE standard form, and so was
virtually the same. The 4 th edition of the “Red Book” has been widely used around the
world for major projects. Many public works department contracts are based on it, for
example the Malaysian Public Works Department contracts PWD203.
22 Multiplex Constructions (UK) Ltd v Honeywell
Control Systems Ltd (No 2) [2007] EWHC 447
(TCC), [2007] BLR 195.
23 City Inn Ltd v Shepherd Construction Ltd
2002 SLT 781, [2001] SCLR 961, Outer Hse, Ct of
Sess; then appealed to the Inner Hse (successful
on the point that failure to use the procedures
of clause 13.8 was not itself a breach of
contract, so the clause could not be treated as
imposing a penalty), [2003] BLR 468.
24 Clause 52.1 sets out the meaning of
Defined Cost
It cannot now be said that there is much similarity between ICE and FIDIC. Both the ICE
and FIDIC have developed by way of revision, and then the issue by FIDIC of a suit of
contracts:
• Conditions of Contract for Construction Building and Engineering Works
Designed by the Employer (Red Book);
• Conditions of Contract for Plant and Design Build for Electrical and
Mechanical Plant and for Building and Engineering works designed by the
Contractor (Yellow Book);
• Conditions of Contract for EPC/Turnkey Projects (Silver Book); and
• Short Form of Contract (Green Book).
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