International Construction Contract Law. 2nd Edition

  • ID: 4459661
  • Book
  • Region: Global
  • 864 Pages
  • John Wiley and Sons Ltd
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The updated second edition of the practical guide to international construction contract law

The revised second edition of International Construction Contract Law is a comprehensive book that offers an understanding of the legal and managerial aspects of large international construction projects. This practical resource presents an introduction to the global construction industry, reviews the basics of construction projects and examines the common risks inherent in construction projects. The author an expert in international construction contracts puts the focus on FIDIC standard forms and describes their use within various legal systems. This important text contains also a comparison of other common standard forms such as NEC, AIA and VOB, and explains how they are used in a global context.

The revised edition of International Construction Contract Law offers additional vignettes on current subjects written by international panel of numerous contributors. Designed to be an accessible resource, the book includes a basic dictionary of construction contract terminology, many sample letters for Claim Management and a wealth of examples and case studies that offer helpful aids for construction practitioners. The second edition of the text includes:

    Updated material in terms of new FIDIC and NEC Forms published in 2017

    Many additional vignettes that clearly exemplify the concepts presented within the text   

    Information that is appropriate for a global market, rather than oriented to any particular legal system

    The essential tools that were highlighted the first edition such as sample letters, dictionary and more

   A practical approach to the principles of International Construction Contract Law and construction contract management. Does not get bogged down with detailed legal jargon

Written for consulting engineers, lawyers, clients, developers, contractors and construction managers worldwide, the second edition of International Construction Contract Law offers an essential guide to the legal and managerial aspects of large international construction projects.

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About the Author xxiii

Foreword xxvSvend Poulsen

Acknowledgments xxvii

Introductory Remarks xxixShuibo Zhang

Introductory Remarks xxxiRobertWerth

Introductory Remarks xxxiiiIlya Nikiforov

1 International Construction Projects 1

1.1 The unique nature of the construction industry 1

1.2 Individuality of construction projects 1

1.3 Roles and relationships 2

1.4 Contract administration:The Engineer 4

1.5 Further important aspects of construction projects 11

1.6 Typical contractual relationships 12

1.7 Motivation for international business 15

1.8 Managerial analysis 20

1.9 Hazards and risks 21

1.10 Hazard identification 21

1.11 Risk analysis 22

1.12 Anti–risk measures 22

1.13 Typical hazards in the international construction business 23

1.14 Risk allocation in contracts 35

1.15 Form of Business Organization 42

2 Civil Law and Common Law 55

2.1 Specifics of the governing law 55

2.2 Common law versus civil law:Differences and interconnections 55

2.3 Delay damages (liquidated damages) versus contractual penalty 59

2.4 Substantial completion versus performance 76

2.5 Binding nature of adjudication awards 78

2.7 Lapse of claim due to its late notification (time bars) 79

2.8 Allocation of unforeseeable and uncontrollable risk to the contractor 80

2.9 Contract administration (the Engineer s neutrality and duty to certify) 90

2.10 Termination in convenience 90

2.11 Time–related issues 93

2.12 Quantification of claims 94

2.13 Statutory defects liability 95

2.14 Performance responsibility: Reasonable skill and care versus fitness for purpose 95

2.15 Common law, civil law, and Sharia interconnections 96

3 Common DeliveryMethods 102

3.1 Common delivery methods: Main features 102

3.2 General contracting 104

3.3 Design–build 105

3.4 Construction management 131

3.5 Multiple–prime contracts 138

3.6 Partnering 138

3.7 Alliancing 140

3.8 Extended delivery methods (PPP, BOT, DBO) 143

3.9 Further aspects of delivery methods 153

4 Specifics of EPC and EPCM 172

4.1 EPC and EPCM 172

4.2 Engineer procure construct (EPC) 172

4.3 Bespoke EPC contracts 177

4.4 Turnkey EPC contracts 185

4.5 Front end engineering design 188

4.6 Engineer procure construction management (EPCM) 192

4.7 EPC versus EPCM 200

5 Unification and Standardization in International Construction 215

5.1 Unification of contracts 215

5.2 Unification per law, principles, and sample documents 215

5.3 Lenders and their influence on unification 220

5.4 Standard form of contract in a governing law context 222

5.5 Purpose of sample documents in construction projects 222

5.6 Standard sample forms as a source of law 224

5.7 Lex causae 224

5.8 Interpretation 225

5.9 Trade usage and business custom 229

5.10 Lex constructionis principles 232

5.11 The use of lex constructionis 240

6 Price 244

6.1 Contract price 244

6.2 Bid pricing methods 247

6.3 Methods of contract price determination 248

6.4 Re–measurement 249

6.5 The lump sum 252

6.6 Cost plus 252

6.7 Guaranteed maximum price 253

6.8 Target price 253

6.9 Payment 254

6.10 Contract price under FIDIC forms 261

6.11 Cost overruns 263

6.12 Abnormally low tender (ALT) 264

6.13 Claims as part of contract price 273

6.13.1 Limitation and prescription periods for claims 273

6.14 Public procurement law limitations 273

7 Time 280

7.1 Time in construction 280

7.2 Delay 280

7.3 The United Kingdom society of construction law delay and disruption protocol 282

7.4 Time program 283

7.5 Ownership of floats 285

7.6 Time at large and extension of time (EOT) 298

7.7 Concurrent delay 300

7.8 Disruption 302

7.9 Time for completion under FIDIC forms 303

7.10 Time program under FIDIC forms 304

7.11 Delay and suspension under FIDIC forms 306

7.12 Contract termination under FIDIC forms 309

8 Variations 313

8.1 Variation clauses 313

8.2 Variations under FIDIC forms 315

8.3 Claims related to variations 319

8.4 Acceleration 329

8.5 Proving the acceleration claim 340

8.6 Substantial change 342

9 Claims 364

9.1 Claims 364

9.2 Contractor s claims under FIDIC forms 368

9.3 Employer s claims under FIDIC forms 369

9.4 Lapse of claim 377

9.5 Cause of the claim 378

9.6 Limits of the lapse of claim 379

10 ClaimManagement 395

10.1 Claim management 395

10.2 Claims for extension of time (EOT) 396

10.3 Claims for additional payment 398

10.4 Claims resulting from delay and/or disruption under the provisions of the contract 399

10.5 Claims resulting from governing law 424

10.6 Global claims 425

10.7 Contractor s claim management under FIDIC forms 429

10.8 Employer s claim management under FIDIC forms 431

10.9 Intercultural aspects 432

10.10 Claim management implementation 436

11 Construction Dispute Boards 442

11.1 Construction disputes 442

11.2 Dispute boards 444

11.3 Contractual adjudication: The use of DAB in FIDIC forms 454

11.4 Enforcement of dispute board decisions 465

11.5 Statutory adjudication 471

12 FIDIC 485

12.1 FIDIC expansion 485

12.2 FIDIC 487

12.3 FIDIC s influence on the construction industry 488

12.4 FIDIC membership 488

12.5 Networking activities 489

12.6 FIDIC forms of contract 523

12.7 The structure of the contract under FIDIC forms 527

12.8 Conditions of contract for construction (CONS) 1999 Red Book 530

12.9 Conditions of contract for plant and design–build (P&DB) 1999 Yellow Book 536

12.10 Conditions of contract for EPC/Turnkey projects (EPC) 1999 Silver Book 537

12.11 Short form of contract Green Book 538

12.12 Construction subcontract 538

12.13 Conditions of contract for design, build, and operate (DBO) Gold Book 540

12.14 Other FIDIC standard forms 548

12.15 Risk allocation under FIDIC forms 554

12.16 Design responsibility under FIDIC forms 567

13 Other Standard Forms of Construction Contracts: NEC, ICC, ENNA, IChemE, Orgalime, AIA, VOB 580

13.1 Common standard forms of construction contracts 580

13.2 The NEC (New Engineering Contract) 580

13.3 FIDIC forms versus NEC3 594

13.4 ICC forms of contract 597

13.5 ENAA forms of contract 597

13.6 IChemE forms of contract 598

13.7 Orgalime forms of contract 599

13.8 AIA forms of contract: U.S. standard 600

13.9 VOB: German standard 608

14 Risk and Insurance 623

14.1 Insurance in construction 623

14.2 Commercial risk, risk of damage, and exceptional risk 624

14.3 Risk management in the standard forms of contract 630

14.4 Hazards and risks in construction projects 632

14.5 Insurance requirements in standard forms of contract 640

14.6 Practical aspects of insurance in construction projects 652

14.7 International insurance law and insurance standards in the construction industry 655

15 Risk in Underground Construction 664

15.1 Underground construction hazards and risks 664

15.2 Code of practice for risk management of tunnel works 665

15.3 Alternatives of unforeseeable physical conditions risk allocation 667

15.4 Unforeseeability 684

15.5 Unforeseeability according to FIDIC forms 685

15.6 Site data 686

15.7 Sufficiency of the accepted contract amount 691

15.8 Unforeseeable physical conditions 692

15.9 Unforeseeable operation of the forces of nature 697

15.10 Force majeure 700

15.11 Release from performance under law 701

16 Securities 703

16.1 Securities in construction 703

16.2 Bank guarantees 704

16.3 Functions and parameters of bank guarantees 704

16.4 Specifics of retention guarantee 706

16.5 Governing law 709

16.6 ICC rules related to securities 712

16.7 Suretyship 712

16.8 Stand–by letter of credit 713

16.9 Securities under FIDIC forms 714

17 Civil EngineeringWorks: Infrastructure Construction Projects 716

17.1 Investments in developing countries 716

17.2 The approach to the risk allocation in the United States 717

17.3 The approach to the risk allocation in the United Kingdom 719

17.4 The approach to the risk allocation in Central and Eastern Europe 722

17.5 The polish experience 731

17.6 The czech experience 748

18 Building Construction: Health Care Facilities 756

18.1 Health care facility construction project 756

18.2 Pre–design planning phase 756

18.3 Design phase 757

18.4 Basic structure of a hospital 758

18.5 Efficiency and cost effectiveness 758

18.6 Flexibility and expandability 759

18.7 Therapeutic environment 759

18.8 Cleaning and maintenance 759

18.9 Controlled circulation and accessibility 760

18.10 Aesthetics 760

18.11 Health and safety 761

18.12 Use of information technology 761

18.13 Relevant regulations and standards 761

18.14 Health care facility construction project: Suitable delivery method 762

Appendix A: Interactive Exercises 766

A.1 Interactive exercise 1: Delivery method selection 766

A.1.1 Task 766

A.2 Interactive exercise 2: Claim for delayed site handover 767

A.2.1 Task 767

A.2.2 Time schedule (program) 768

A.2.3 Site handover procedure 768

A.2.4 Mobilization 768

A.2.5 Acceleration 768

A.2.6 Claims 768

A.3 Interactive exercise 3: Claim due to suspension of work 769

A.3.1 Task 769

A.3.2 Suspension 769

A.3.3 Mobilization 769

A.3.4 Claims 770

A.4 Interactive exercise 4: Subcontractor claim for contractor delay (lack of cooperation, inadequate on–site coordination and improper, unclear, and delayed instructions) 770

A.4.1 Task 770

A.4.2 Fact 1 Lack of cooperation 771

A.4.3 Fact 2 Inadequate on–site coordination 771

A.4.4 Fact 3 Improper, unclear, and delayed instructions 771

Appendix B: Sample Letters (Examples of Formal Notices) 772

B.1 Contractor s sample letters: Notice of probable future event 773

B.2 Contractor s sample letters: Notice of contractor s claims 774

B.3 Contractor s sample letters: Contractor s claim No.——————— submission (quantification) 776

B.4 Contractor s sample letters: Request for evidences of financial arrangements 777

B.5 Contractor s sample letters:Written confirmation of oral instruction 778

B.6 Contractor s sample letters: Notice of dissatisfaction with a determination of the engineer 779

B.7 Contractor s sample letters: Notice of contractor s entitlement to suspend work 780

B.8 Contractor s sample letters: Notice of contractor s claim under the sub–clause 16.1 781

B.9 Contractor s sample letters: Application for taking over certificate 782

B.10 Employer s sample letters: Notice of employer s claim 783

B.11 Employer s sample letters: Answer to request for evidence of financial arrangements 784

B.12 Engineer s sample letters: Engineer s determination 785

B.13 Engineer s sample letters: Engineer s instruction 787

B.14 Engineer s sample letters: Engineer s notice to correct 788

B.15 Engineer s sample letters: Engineer s instruction to remove a person employed on the site 789

B.16 Engineer s sample letters: Engineer s instruction lack of mobilization 790

Appendix C: Dictionary of Construction Terms: Chinese, Czech, English, French, German, Hungarian, Polish, Portuguese, Russian, and Spanish 791

C.1 Dictionary General part 792

C.2 Dictionary Contractor s claims 800

C.3 Dictionary Employer s claims 804

Appendix D: ClaimManagement System Under FIDIC Forms 807

D.1 Claim management team responsibilities 807

D.1.1 E1 Project manager 807

D.1.2 E2 Design and time schedule (program) 808

D.1.3 E3 Site manager 808

D.1.4 E4 Contract interpretation, monthly statements, invoicing, insurance, subcontractors, employer s claims, mutual Claims in a joint venture 809

D.1.5 E5 Administrative support 809

D.2 Claim management processes 810

D.3 Table of contractor s claims under FIDIC CONS 811

D.4 Table of employer s claims under FIDIC CONS 811

Appendix E: FIDIC Forms Risk Allocation Charts 813

E.1 Chart No.1: Basic risk allocation alternatives in connection with unforeseeable physical conditions 813

E.2 Chart No. 2: Basic comparison of risk allocation (claims options) in FIDIC CONS/1999 red book, P&DB/1999 yellow book, and EPC/1999 silver book 813

Index 817

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