Construction Law: Contracts, Provisions, and Conflict Resolution

This article discusses the importance of contracts in construction work and the various provisions provided in the JCT. It also covers the methods of conflict resolution such as arbitration, litigation, and negotiation. The article explains the different types of remedies to breach of contract such as monetary damages, specific performance, rescission, and liquidation damages.

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Construction Law
Introduction
A contract is important as it binds the parties involved on the agreed terms; hence there
should be a compensation for breaching the contract to the other party by breaching party. There
are various provisions provided in the JCT which varies from insurance cover, payment options,
to the security provisions. A contract is essential when a business transaction takes place
especially when the goods involved are of huge value. It acts as a guide as it binds the buyer and
seller to their words to ensure that everyone fulfills their duties (under clauses 32, 34 and 36). In
case of a legal dispute, the contract can be used in the court of law as proof by both the parties
along with the terms of transactions.
Breach of the contract results in losses to either of the party involved in the contract.
Construction contracts should adequately be drawn up with all the terms and conditions as there
are many aspects and parties involved. Also, a contract may extend for prolonged than it had
been expected, hence if no contract is signed by any one party, the other party may feel
disgruntled. Construction work brings together much technical personnel, and some contracts or
parts of it may be outsourced to lower construction cost and ensure quality.
The breach of the contract should be solved using avenues such as negotiation or
arbitration to save time and to resume the work to be completed soon. The contractor may not
have anticipated the pre-commencement delay; hence, new terms should be renegotiated to both
parties against losses and damages (reference clause 2.28.3).
The joint contracts tribunal provides provisions in the public sector that relate to
transparency and fair payment. The JCT also provide provisions for the granting of company
guarantees from the parent company and performance bonds. An extension of the clause that

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provides for optional provisions includes third party rights from sub-contractors as collateral
warranties (clause 2.14). They are adjustments to the JCT such as provisions for Construction
(Management and design) Regulations. Also an amendment to the insurance provisions for
existing structures and works to make them flexible. A simplifying and revision of section four
payment provisions include:
 Interim valuation dates were established that apply to main sub-subcontract, contract and
subcontract levels.
 Flexibility is increased with fluctuations provisions
 A Consolidation of the notice prerequisites of the Construction, Housing Grants and
Regeneration Act 1996.
They are three major changes to the payment system.
 A valuation date that's common.
 A change in the payment frequency.
 A mechanism to recover the debt (clause 2.17).
There are various methods to resolve a conflict. These methods include arbitration,
litigation, and negotiation. Arbitration seeks to resolve the dispute out of the court where a
referee hears the parties involved, and both the parties need to get agree beforehand to accept
outcomes of the arbitration process. The arbiter should be neutral and not be biased on either side
to ensure after the conflict is resolved it does not leave any party feeling disgruntled. Arbitration
is practical, fast and cost-effective as a quick solution is provided and the solution does not favor
either of the parties involved in the dispute (clause 4.23). Arbitration is meant to help with an
amicable solution rather than only benefit one party. It's essential to consider the other person's
feelings and concerns while arbitrating.

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While negotiating, I would propose a middle ground and try to see things from other person's
point of view. Both parties need to give some to get some from the arbitration and need to
suggest creative ways for both parties to achieve a solution. This information is important as it
will assist to arrive at a solution where it's a win-win situation for both parties. It understands the
essence of keeping calm and holding one's ground while negotiating to ensure one party does not
get the advantage over other. I prefer mutual bargaining as it's an interactive problem-solving
exercise and it depends on open communication, mutual respect and trust and in this, negotiators
focus on fulfilling the mutual interests of both the parties (under clause 4.25).
Negotiation Techniques.
An integrative negotiation process refers to a win-win situation for both parties involved in
the negotiation. It is also referred to as interested based bargaining where both parties work
together to solve a dispute by addressing each other's interests. Interests include concerns, needs,
and fears and desires which is important to both parties involved. It seeks to combine both sides
in the most appropriate manner that can enlarge the pie and integration occurs only when there
are multiple issues involved. This is because both parties must give and take so that they come
up with an amicable solution to solve the issues (reference clause 2.28.6.4).
Litigation is where the courts are approached to settle disputes. In a litigation process, the
defendant and prosecution side present the evidence in front of the court where a judge decides
and give the judgment which needs to be agreed by both the parties. It's useful in conflict
resolution and it is the most commonly used method (clause 4.25).
Warranty for the goods. Warranty is meant to protect the buyer for a period of time under
which the said goods can be returned as per the contrary to the contract. The validity of the
contract and termination procedure should be laid out in the contract. The contract should

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indicate when it comes into force and for how long contractual liabilities are discharged. This
would ensure should the quantity surveyor find that the roofing tiles were of poor quality then
the manufacturer compensates the employer under clause 2.4.
The quality of the goods should be assured in the contract and who is responsible when the
goods sold are found to be of the low quality. Other miscellaneous terms such as the stipulation
that the buyer shall not assign the contract to a third party without informing the employer. The
risk of damage or loss of the goods shall pass over the buyer than the seller transfers the goods to
the buyer (clause 2.9).
Also, proper communication is necessary to ensure that no misunderstanding occurs while
the contract is signed and carried out. Communication covers many aspects as it addresses the
cost of the contract and ensures the terms of the contract which are agreed by both the parties.
Other factors to be considered are quality assessment where the organization's analyses if the
vendors can deliver as per the agreed terms and conditions. Also, competitive bidding is crucial
to the process. It covers cost-saving, financial stability, and transaction cost and project profit.
Upon assessment, the quantity surveyor found the brickwork poorly done as the roofing tiles had
been kept in a place where the roof was leaking (clause 2.12).
Negotiation and consultation are also important factors in the process of outsourcing and
subcontracting. It offers the vendor and organization a chance to iron out issues that they may
have with the contract and begin work on an environment where they can deal with the issues as
they arise under clause 2.12.
Mutual adjustments occur if the negotiating parties can find a middle ground to negotiate
from. If both sides can see things from each other's viewpoints, they can mutually agree. Both
have to be willing to give and compromise on some matters raised by each party. This is only

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plausible if both view arbitration as a solution to their problem as it tries to arrive at a win-win
solution. The arbiters have to be understanding and try to find an outcome that's beneficial to all.
Mutual adjustment plays a significant role in finding a solution that both negotiating parties can
agree upon (clause 4.23). It brings the opposing parties together by making them see the situation
from each other's viewpoint.
Choose the right arbitrator.
It goes hand in hand to choosing your decider. Casting is critical because post-award
recourse is limited. At the outset, consider potential points of conflict and the issues in your
dispute. Finding an arbitrator who can run a proceeding and deliver sound rulings on the process
and the merits since the downside of procedural flexibility is the potential for procedural laxity.
Where there are more than one arbitrator persuasiveness and cooperativeness are also important
attributes.
Get the right type of arbitration.
Institutional arbitration rules should be specified as they provide a procedural framework
guide and are incorporated into the contract for reference, is the best practice. The tribunal is
forced to create procedural rules from scratch or choose from existing regulations to adopt, in the
absence of rules there is no institution to step in if there is a failure to make an appointment or
challenge which probably means the parties will most likely have to go to court for relief of the
commercial dispute under clause 2.4.
Remedies to Breach of Contract
Monetary damages.
The breaching party takes responsibility for breaching the contract terms and assume
responsibility for any financial losses incurred. In this case, the contractor has the right to ask for

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an extension of the stand down period and £15,000 compensation per week for the
inconvenience. The contractor had men at the construction site, and work can just come to a halt
hence should be compensated and the extension period requested granted (clause 2.20).
Specific performance.
In some cases, the most suitable solution for a breach of contract terms and conditions is to
correct the violation by forcing the breaching party to complete the terms agreed. The contractor
should be forced to complete the work since for the employer to put another contractor on site
would be expensive and part of the work is already paid (reference clause 2.27).
Rescission.
Rescission allows the non-breaching party to be released from performance obligations
permanently.
Liquidation damages.
At times, it is challenging to determine how much a breach of contract damaged a person.
The contractor can't complete the contract on the terms and conditions than the employer is liable
to compensate for the damages to the other party. The air conditioning units should be valued at
their interim value, and since they had not been delivered by the manufacturer, then the employer
should not pay for them. The roofing tiles are located on site, and it's the contractor's fault that
they were stored in a leaking condition, hence, the brickwork will be considered poor (reference
clause 2.29).
The issue of time scales towards the issue of the certificate can be discussed between the
employer and contractor for reaching a middle ground. An Interim Payment Certificate is
released after five days after the Due Date, with the Payment date which will be further nine days
as per the main contract, nineteen days later in the sub-contractor sixteen days later in the sub-

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contract. Regarding termination of the contract, the contractor should compensate the employer
as the contractor moved to a new site without completing the work (clause 2.28.4). The employer
should not have terminated the contract even though the contractor was non-responsive, hence,
the two should discuss how much each should compensate to the other.
The contractor violated the contract by moving to a new site and did not respond nor
provided any assurances to the employer for completing the contract. The contractor should have
completed the contract within the agreed period as per the contract to avoid termination of the
contract by the employer. The contractor fails on his part as the number of operatives on site
dwindle which shows the kind of games that the employer had to put up with, hence, the
contractor will be held liable (clause 2.28.3).
Conclusion
In summary, there are solutions to breach of contract, and the contract could still be
completed in time without inflating the initial estimated cost. Contracts are meant to protect
parties involved from a loss and to ensure construction work is completed as per the agreed terms
and conditions. At times, this is not possible as some factors before the commencement of the
contract cannot be factored, thus, the contract may need to be relooked.

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Reference
The joint contracts tribunal; standards building contract 2016 edition.