Construction Contract Law: Obligations, JCT Contracts, Compensation Events

This document provides an overview of construction contract law, focusing on the obligations of clients and contractors, the features of JCT contracts, and the concept of compensation events. It emphasizes the importance of fulfilling express and implied terms in construction contracts. The document includes references to relevant books and journals.

CONSTRUCTION
CONTRACT LAW

Table of Contents
Question 1........................................................................................................................................2
Questions 2.......................................................................................................................................2
Question 4........................................................................................................................................3
Question 6........................................................................................................................................3
REFERENCES................................................................................................................................5

Question 1
Contract conditions set principal legal relationship between parties to construction
projects, determining allocation of the risks and price consequently. Contract reperesent entire
and the integrated agreements between parties and superseded the prior representations,
negotiations or agreements either oral or written. Contract could be modified or amended only
through modification.
Contractual obligations of client
Under the construction contract client has the obligation to provide the funds to the
contractors timely as agreed by the contract. At the end of construction contract they are also
required to accept the property within the time. Clients are under obligations to accept the
property within the time scheduled and make payment for full at time of completion.
Contractual obligation of the Contractor
The contractor has to complete the construction within agreed period of time or date . It
has to provide the report for progress of works in the time specified. Failure of this will make
contractor liable to pay for the damages. Contracts have to intimate in advance if extension of
time is required for completion of contract citing the reasons of such extensions. Also the work
has to be initiated within reasonable time from the start of contract (Alves, and Shah, 2018.).
The contract has to state the progress of work to clients whenever asked by them. If the work is
not progressed within the reasonable time clients may cause the contractor to pay damages.
Questions 2
JCT are the standard form of contract that is traditional form of the contract. JCT
maintains traditional approach which concentrates over transfer of the risks and liabilities under
contract. Jct contracts include payment of fixed price for lumpsum contract and contains the
provisional sums. In the JCT contacts there could be cost scrutiny via contract sum analysis and
the tender negotiations. The ground risks reside with contractor under the contract. Also JCT
contract do not have programme as the contractual documents. In relation to the payment JCT
contracts payment sections are clear and all in one section and also easy to follow. In relation
with time and loss expenses, JCT contract has the relevant matter and the relevant event and time
and money deals with separate concepts. JCT contracts has clear interactions between
contractor's proposals and requirement of employers and there are also extensive drafting in JCT.
There is guidance regarding the work information and it is also dangerous and also the bad

practices simply re – badge the JCT employee requirement documents. The client is required to
make the payments as specified in the contract as per the progress of work (Haloush, 2020).
They are also required to adhere. The payment and pay less notifications provide about the
details of the payments. Clients is required to make the payments and contractors has the right to
stop the work if the clients do not make the payment within the agreed time. They could notify
the clients if less payments are made.
Question 4
Compensation events are those events in the contractual work which does not arise out of
the contractor’s fault. If there is occurrence of such event then the contractor has to be
compensated for the effect of the same event which can be in the manner of price extension,
completion date or key date of the contract (NEC, 2020). Some of such events may lead to
additional payment or providing additional time whereas the others reduce the payment of the
contractor. Such events lie outside the control of the contractor, and so they do not qualify as
their fault. For example, tunnel excavation cycle time exceeds eight working hours for all the
consecutive working cycles and the reason for such is outside the control of the contractor.
In case of occurrence of the compensation events which are listed outside the contract the
notification has to make either by the project manager or the contractor within the time frame
(Eggleston, 2019). The time frame available is one week or as longer as decided by the project
manager. In case the manager is not able to manage to notify the decision then compensation
event is not automatically accepted. But the contractor can notify thee the project manager which
have failed to notify their decision.
Question 6
For any of the contract the most essential thing is to manage the terms and condition of
the contract which need to be fulfilled by all the parties to the contract. The most important thing
for the contract to be successful is to fulfil all the requirement of the contract. For the
construction contract the most essential aspect is that all the express and implied terms of the
contract need to be fulfilled (Abdul-Malak and Khalife, 2017). For the construction contract the
express terms are the terms and condition which being expressed in written among all the parties.
On the other side the major implied terms in the contract are the terms which is not expressed but
which occurs because of the contract taking place among all the parties. Under the contract of the

construction company the major express terms and condition is to contract the thing for which
the contract is being signed. This is particularly because of the reason that the major contract is
for construction project only. Hence, if this express term will not be followed then the contract
will not be valid and correct.
In addition to this when the company has come in contract with the other company for
constructing then this involves many of the different types of the implied terms and conditions as
well. This involves the terms like when construction will take place then it is the inbuilt duty of
the company to provide all the work to be done in qualitative aspect (Demirel and et.al., 2017).
This is particularly because of the reason that when the company is responsible for the working
of any activity then this involves the use of the qualitative products so that the express contract
can be managed in proper and effective manner. In addition to this the another major implied
contract is to deliver the project on time so that the project is being delivered on time.

REFERENCES
Books and Journals
Abdul-Malak, M.A. and Khalife, S., 2017. Classification and analysis of notice requirements for
construction contract administration. Journal of Legal Affairs and Dispute Resolution in
Engineering and Construction, 9(3), p.04517016.
Alves, T.D.C. and Shah, N., 2018. Analysis of construction contracts: searching for
collaboration. In Construction Research Congress 2018 (pp. 148-157).
Demirel, H.Ç., and et.al., 2017. Flexibility in PPP contracts–Dealing with potential change in the
pre-contract phase of a construction project. Construction Management and Economics,
35(4), pp.196-206.
Eggleston, B., 2019. The NEC4 Engineering and Construction Contract: A Commentary. John
Wiley & Sons.
Haloush, H., 2020. Rethinking traditional approaches of parties' autonomy in construction
contracts: decennial liability as a case study. International Journal of Law and
Management.
Online
NEC. 2020. [Online]. Available through: <
https://www.neccontract.com/NEC-in-Action/FAQs/Is-silence-deemed-acceptance>