preparatory work and/or procurement of materials, often up to a maximum indicated value, pending formal conclusion of a contract. Letters of intent should be used with caution as frequently they may result in unintentional commitments without the benefit of properly negotiated terms. Limitation – under English law the relevant periods of limitation i.e. the periods in which you must bring a claim, are six years from the date of damage for a negligence claim, or (if later) three years after the claimant could have known of the damage; and six years from a breach of contract where the contract is a simple contract, and 12 years from the breach where the contract is a deed. Liquidated damages – a pre-determined sum included in the contract as an agreed amount to be paid in respect of certain breaches. Most usually, liquidated damages are included as a remedy for delay to the works, but may also be used as a remedy for performance below the specified standard in projects for process or power plants. The sum applied to delays is usually calculated on a daily or weekly basis. Care must be taken to use a sum that either represents a genuine pre-estimate of loss, or where such an estimate is not possible, a commercially justifiable amount ( El Makdessi v Cavendish Square Holdings BV and another [2013] ) otherwise it may be unenforceable as a penalty. Local Democracy, Economic Development and Construction Act 2009 – a piece of legislation amending the Housing Grants, Construction and Regeneration Act 1996 . In particular, it extends the right to adjudicate to oral, as well as written, contracts and provides for a contractor’s application for payment to constitute a payment notice where the employer fails to serve such a notice. Loss and expense – additional payment which is claimed by a contractor when he has suffered delay during the course of the contract works.
Misrepresentation – where a party makes an inaccurate statement either
(1) knowingly or recklessly or (2) negligently. If acted upon or relied upon by another party it may give rise to a claim if that party suffers a loss as a result. Mitigation – a rule requiring a claimant to take reasonable steps to minimise its loss, alternatively not to take any unreasonable steps which would increase its loss. A party will not be able to claim for a loss which he could reasonably have avoided. The burden will be on the defendant to show that the claimant did not mitigate its loss. main contract document and whom the main contractor will appoint to undertake particular works. Once appointed, the subcontractor becomes a domestic subcontractor for whom the main contractor is responsible. To be contrasted with the now seldom used Nominated subcontractor . NEC – the New Engineering Contract, first introduced in 1995, and now in its third edition. It is designed to be more flexible than more traditional standard forms such as JCT , but has a very strong emphasis on project management. Negligence – a failure to exercise Reasonable skill and care , by breaching either a contract term or a duty of care in tort. In order to bring a claim in tort for negligence a claimant will need to demonstrate (1) it was owed a duty of care by the negligent party, (2) that the duty was breached, and (3) that it suffered loss as a result of that breach. Net contribution clause – a clause which design teammembers commonly seek to insert in their appointment documents in order to reverse the effects of the common law doctrine of Joint and several liability . Employers resist its insertion Named subcontractor – a subcontractor who is named in the
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