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    PART A - Lecture 3 Contractors and Building Contract

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    Meor Syahmi
    This document discusses contractors' obligations under standard construction contracts and common law. It covers topics like contractors' implied duty to complete work in a good, workmanlike manner using proper materials that are reasonably fit for purpose. Case law has established these implied warranties, like in Hancock v Brazier where it was ruled a contractor implicitly promises habitable housing. The document also examines express obligations in standard forms like PAM 2006 and PWD 203A, which require contractors to follow specifications, hire qualified staff, obtain insurance, and be responsible for subcontractors' actions. Group discussion questions at the end propose discussing these contractual roles and obligations in more detail.

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    PART A - Lecture 3 Contractors and Building Contract

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    Meor Syahmi
    667 views42 pages
    This document discusses contractors' obligations under standard construction contracts and common law. It covers topics like contractors' implied duty to complete work in a good, workmanlike manner using proper materials that are reasonably fit for purpose. Case law has established these implied warranties, like in Hancock v Brazier where it was ruled a contractor implicitly promises habitable housing. The document also examines express obligations in standard forms like PAM 2006 and PWD 203A, which require contractors to follow specifications, hire qualified staff, obtain insurance, and be responsible for subcontractors' actions. Group discussion questions at the end propose discussing these contractual roles and obligations in more detail.

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    PART a - Lecture 3 Contractors and Building Contract

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    This document discusses contractors' obligations under standard construction contracts and common law. It covers topics like contractors' implied duty to complete work in a good, workmanlike manner using proper materials that are reasonably fit for purpose. Case law has established these implied warranties, like in Hancock v Brazier where it was ruled a contractor implicitly promises habitable housing. The document also examines express obligations in standard forms like PAM 2006 and PWD 203A, which require contractors to follow specifications, hire qualified staff, obtain insurance, and be responsible for subcontractors' actions. Group discussion questions at the end propose discussing these contractual roles and obligations in more detail.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    667 views42 pages

    PART A - Lecture 3 Contractors and Building Contract

    Uploaded by

    Meor Syahmi
    This document discusses contractors' obligations under standard construction contracts and common law. It covers topics like contractors' implied duty to complete work in a good, workmanlike manner using proper materials that are reasonably fit for purpose. Case law has established these implied warranties, like in Hancock v Brazier where it was ruled a contractor implicitly promises habitable housing. The document also examines express obligations in standard forms like PAM 2006 and PWD 203A, which require contractors to follow specifications, hire qualified staff, obtain insurance, and be responsible for subcontractors' actions. Group discussion questions at the end propose discussing these contractual roles and obligations in more detail.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
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    The document discusses the responsibilities and obligations of contractors in construction contracts, including terms that can be implied in contracts as well as examples from standard forms like PAM 2006 and PWD 2010.

    Contractors have responsibilities and obligations that are expressly stated in standard forms of contract as well as obligations that are implied by common law, such as an implied warranty to complete work in a good and workmanlike manner using proper materials.

    Terms can be implied by fact, custom, prior conduct of parties, to give meaning and efficacy to the agreement. Terms can also be implied by law, either by the courts or statutes.

    CONTRACT MANAGEMENT BCM643 Lecture 3

    CONTRACTORS AND THE BUILDING CONTRACTS


    ZAINAB MOHMAD ZAINORDIN Pusat Pengajian Pembinaan, Fakulti Senibina Perancangan & Ukur, UiTM Shah Alam

    Acknowledgement: 1 Dr. Zulhabri Ismail, PM Ngah Yahya Embong & Pn. Ezlina Ahnuar

    Synopsis
    The purpose of this lecture is to discuss and make aware of the responsibilities and obligations of the builders / contractors under standard forms [express] and common law [implied].

    Contractors Obligations
    3

    Current scenarios in the construction site

    Implied Warranty on Contractors Obligation


    The courts have over time, implied in all building contracts that the builder or contractor will do his work in: 1. Good and workmanlike manner 2. That he will supply good and proper materials and that, 3. It will be reasonable fit for the purpose required.
    6

    Implied terms
    A term which will be implied (e.g. from statute or custom) where it is necessary to carry out the presumed intention of the parties to a contract and is so obvious that the parties must have intended it to apply. Such a term will not override an express term.
    (LB Curzon, p.179)
    7

    Implied terms
    A term which not written down in a contract or openly expressed at the time it is made but which the law implied. The expression is used in several different sensesAn implied term must not be in conflict with or be inconsistent with an express term. It must be based on the imputed or presumed intention of the parties 8 (Powell-Smith et al.)

    Implied warranty
    A lesser term of a contract (i.e. not a CONDITION) which is implied by law or by the behaviour of the parties. (Penner, 2001, p.174)

    Implied
    This term can only be properly used to mean established by indirect or circumstantial evidence or, which comes to the same thing, presumed in certain circumstances to exist, in the absence of evidence to the contrary, especially with reference to inward intentions or motives as inferred from over acts. (Penner, 2001, p.174) 10

    Terms implied..
    Terms implied by fact Implied by custom or habit. Implied by trade or professional custom. Implied to give sense and meaning to the agreement. Implied t o give business efficacy to a commercial contract; The Moorcock. Implied because of the prior conduct of the contracting parties; Hillas v Arcos
    11

    Terms implied..
    Terms implied by law by the court
    Terms implied by law by statute

    12

    Pasuma Pharmacal Corporation v McAlister & Co. Ltd [1965] 1 MLJ 221. The Federal Court in Pasuma explained the process by which the courts may imply terms into a contract:To give efficacy to the transaction. That is, terms may be implied from the presumed intention of the parties and upon reason so that there will not be a failure of consideration The Moorcock.
    13

    Pasuma Pharmacal Corporation v McAlister & Co. Ltd [1965] 1 MLJ 221.
    Contd By applying the officious bystander test or what is commonly known as the Oh, of course! Test. That is, if at the time the contract was negotiated, someone had said to the parties, What will happen in such a case?, the parties would both have replied, Of course, such and such will happen. We did not trouble to say that, it is too clear. Reigate v Union Manufacturing Co. Ltd. [1918] and Shirlaw v Southern Foundries [1939] 2 KB 206.
    14

    Hancock v Brazier [1966] 1 WLR 1317; [1966] 2 All ER 901.


    Facts
    A contractor had used an infill which was commonly considered as suitable but unfortunately through no fault of his, reached with certain chemicals in the ground and caused heaves.
    15

    Hancock v Brazier [1966] 1 WLR 1317; [1966] 2 All ER 901.


    Held
    The CA held a purchaser entitled to damages in respect of defective hardcore before the date of the contract of purchase.

    16

    Hancock v Brazier [1966] 1 WLR 1317; [1966] 2 All ER 901.


    Lord Denning summarized the law as follows:
    When a purchaser buys a house from a builder who contracts to build it, there is a three-fold implication: that the builder will do his work in a good and workmanlike manner; that he will supply good and proper materials; and that it will be reasonable fit for human habitation.
    17

    Facts

    Young & Marten v McManus Childs [1969] 1 AC 454; [1968] 3WLR 630.

    A roofing sub-contractor complied fully to clients instruction on installation of Somerset 13 tiles which were manufactured by sole maker to the roof.

    18

    Young & Marten v McManus Childs [1969] 1 AC 454; [1968] 3WLR 630.
    Held
    The sub-contractor was held liable when the tiles failed due to a latent and undiscovered defect for breach of the implied warranty.

    19

    Young & Marten v McManus Childs [1969] 1 AC 454; [1968] 3WLR 630.
    Legal principle embedded in Young & Marten?
    The contractor must carry out his work with proper skill and care or, as sometimes expressed, in a workmanlike manner. Goods and materials must normally be of good quality and reasonable fit for their purpose. (Uff, 2002)
    20

    Merton L.B v Leach (1985) 32 BLR 51.


    In Merton, there are some important terms which are usually to be implied into building and engineering contracts.
    Such terms require that the building owner shall give possession of the site within reasonable time, and give instructions and information at reasonable times.
    21

    Question to ponder

    If the contractor build the according to detailed instructions, does he provide implied warranty as to the fitness of the finish product?

    22

    Lynch v Thorne [1956] 1 WLR 303.


    Lord Evershed held that: If a skilled person promises to do a job, that is, to produce a particular thing, and he makes no provision, as a matter of bargain, as to the precise structurewhich he will create, then it may well be that the buyer of the structure or article relies on the judgment and skill of the other party to produce that which he says he will produce. That, however, is only way of formulating the existence in such circumstances of an implied warranty
    23

    Lynch v Thorne [1956] 1 WLR 303.


    Lord Evershed (contd) On the other hand, it two parties elect to make a bargain which specifies in precise detail what one of them will do, then, in the absence of some other express provision, it would appear to me that the bargain is that which they have made; and so long as the party doing the work does that which he has contracted to do, that is the extent of his obligation. 24

    Contractors Obligations Under Standard Forms of Construction Contracts


    25

    26

    PAM 2006 Private Edition With Quantities


    Clause 1.1 Completion of works in accordance with Contract Document
    Clause 2.1 Comply with A.I. Clause 3.5 To provide 6 copies of the works programme 27 within 21 days of receipt of the L.A.

    PAM 2006 Private Edition With Quantities


    Clause 4 Comply with statutory requirements Clause 6.1 Standard of Works, Materials, Workmanship and Goods. [See also clause 6.3 (Inspection and Testing), clause 6.5 (Works, Materials, Workmanship and Goods Not in Accordance with Contract) and clause 6.7 (Failure to Comply with Architects Instruction)]. 28

    PAM 2006 Private Edition With Quantities


    Clause 8.1 To appoint Site Agent constantly on site.
    Clause 14.3 Contractor will be responsible for loss or damage to materials or goods on site supplies by NSC and NS.

    Clause 17.3 Should not sub-contracting


    29

    PAM 2006 Private Edition With Quantities


    Clause 18 Indemnify Employer against any expenses, liability, loss etc in respect of personal injury [occupier liability]. Clause 19 Contractor to insure against injury to persons and property.
    30

    PAM 2006 Private Edition With Quantities


    Clause 20.A Contractor to join names with employer insure against loss and damage by fire, tempest. Lighting etc. Clause 20.A.3 & 20.B.5 Restoration of damaged work / unfixed materials / goods upon settlement of any claim under insurance.
    31

    PAM 2006 Private Edition With Quantities


    Clause 20.C.6 (ii) & (iii) Contractor to remove and dispose debris and restatement and make good. Clause 21.1 To commence the work regularly and diligently. Clause 22.2 To pay LAD amount as agreed.
    32

    PAM 2006 Private Edition With Quantities


    Clause 23.6 Constantly use his best endeavours to prevent delay. Clause 27.5 Payment to NSC Clause 27.9 Contractor fully responsible for all NSCs and NSs.
    33

    PAM 2006 Private Edition With Quantities


    Clause 30.1 Submit details and particulars to the Architect to consider and ascertain the amount to be stated in an Interim Certificate. Clause 30.10 6 months after CPC, Contractor shall send all documents necessary for preparing the Final Account (accounts of NSC, NS) 34

    PAM 2006 Private Edition With Quantities


    Clause 33.1 Stop work and not disturb the fossils, antiques etc. Notify the Architect upon discovery.

    35

    PAM 2006 Private Edition With Quantities


    Issues
    What is meant by reasonable satisfaction [clause 1.1]? No definition on what constitute as reasonable satisfaction. Strong element of personal judgment.
    36

    PWD 2010 FORM 203 A


    Clause 5 Comply with S.O instructions. Clause 6 Scope of contract.

    37

    PWD 2010 FORM 203 A


    Clause 8.2(b) Inform the S.O if any discrepancy.
    Clause 10.0 Obligation of the Contractor Clause 13.1(a) Provide a Performance bond

    38

    PWD 2010 FORM 203 A


    Clause 21 Comply with statutory requirement
    Clause 36.2 Carry out the inspection and tests

    Contd.

    39

    GROUP DISCUSSION CONTRACTORS AND CONSTRUCTION CONTRACTS

    Discuss the roles and obligations of the contractors that expressly and impliedly stated in construction contracts
    15 marks

    40

    GROUP DISCUSSION
    ARCHITECTS AND CONSTRUCTION CONTRACTS

    Dual liability of an architect can be seen in standard contract and common law. Based on your understanding, highlights cases that implicitly describe the architect obligations and give examples of the scenario that happen in construction projects.
    15 marks
    41

    Thank you

    42

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