so that if there are subsequently problems with the development, the owner or occupier may sue under the agreement. This is because the courts have restricted the ability of a purchaser of a development to bring a claim in tort for negligence if they have only suffered economic loss ( Murphy v Brentwood District Council [1991] UKHL 2 ).
delayed by the employer, the employer will not be able to insist that the contractor meets the original date for completion. In these circumstances, the original completion date falls away, and the contractor’s only obligation is to complete within a reasonable time. For this reason, construction contracts will usually provide a mechanism for extending time if works are delayed, and a contractor may also be entitled to payment of Loss and expense .
Entire agreement clause – a clause in a contract which limits the remedies available to the parties to those expressly set out in the contract ie
FIDIC – an acronym for the Fédération Internationale des Ingénieurs Conseils , a professional body of engineers, founded in Europe, which produces
neither party may rely on any representations, statements or promises which took place when the contract was being negotiated and which are not reflected in the written terms. In effect, a form of Exclusion clause . Escrow – something which is held in escrow is held pending the outcome of a process, for example a deed may be held in escrow pending payment, or a deposit of money may be held in escrow pending resolution of a dispute or completion of a transaction. Exclusion clause – a provision in a contract which serves to exclude a party’s liability, either wholly or in part, in relation to breach of a term or terms. It is not uncommon to see an exclusion clause limiting liability for Consequential loss . Expert determination – a form of dispute resolution where the parties refer the dispute to an independent expert for a decision. Usually the nature of the dispute will be technical, and the expert will be an individual with relevant technical, rather than legal, expertise. Expert determinations are generally binding and can only be appealed in very limited circumstances. Extension of time – the Prevention principle provides that a party cannot insist on performance of a contractual obligation by the other party where it has prevented that performance. In the context of construction contracts, this means that, if a contractor is
a suite of international contracts which were originally based on the English ICE forms. The FIDIC contracts are often referred to as the ‘Rainbow suite’ because the different types of contract have different coloured covers. Fiduciary interest – usedwhen a party’s interest in something is subject to a duty of good faith, as for example in the case of a trustee. The JCT contract forms use the expression to describe the Employer’s interest in the Retention monies, and case law suggests that suchwording in effect creates a trust of themoney held by the Employer. Final certificate – a certificate issued by the contract administrator following submission of the contractor’s final account which confirms the final valuation of the completed works, and any balance due to the contractor, taking into account the valuation of any claims submitted by the contractor and/or deductions such as Liquidated damages made by the employer. The JCT forms of contract state that the final certificate is conclusive evidence of various matters such as quality of workmanship and materials, and Extensions of time . Final date for payment – the date on which, under the Construction Act , the employer must make payment to the contractor of the sum stated in the Payment notice or Pay less notice .
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