This article discusses the principles of offer and acceptance in contract law and the usage of New Engineering Contract in construction projects. It also explains the positive aspects of using New Engineering Contract over other forms of contract. The article provides references for further reading.
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Running head: CONTRACT LAW IN CONSTRUCTION Contract Law Name of the Student Name of the University Author Note
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1CONTRACT LAW IN CONSTRUCTION Answer to question 1: The present case law is based on the principle of offer and acceptance. Offer and acceptance are the popular legal term in the case of contract law (Stone 2014). When one party makes certain proposals to other with an intention to create legal relationship with him, it is termed as offer. If the other party accepts the offer, contract is made in between them. In general, an offer can be accepted through direct communication. This rule has been established through the case ofCities Service Oil Co., v. National Shawmut Bank, 172 N.E.2d 104. However, there are certain exceptions to this rule are present. One of the most common exceptions is the postal rule (Sasso 2016). According to this rule, if an offer has been made to a person and that person gives his consent over the issue by letter, the offer will be regarded as accepted as soon as he will post the letter (Bayern 2015). It has been stated by the court that the acceptance rule will prevail even if the letter address has been disturbed (Poole, Devenney and Shaw-Mellors 2017). The postal rule has been confirmed by the court in the case ofAdams v Lindsell (1818) 1 B & Ald 681. Further it has been observed in the case ofHenthorn v Fraser[1892] 2 Ch 27that if the parties to a contract has been mentioned about the communicating method of acceptance, the acceptance will be made when the party will post his consent. The court of appeal in case of Entores Ltd v Miles Far East Corporation[1955]EWCA Civ 3has been observed that the postal rule is not applied in case of instantaneous communication like telex; rather the rule will be applied in case of message sending machines. Therefore, it can be stated that postal rule will apply in case of fax. According to the general rule, an acceptance to an offer is said to be made when the offer maker will receive the acceptance.
2CONTRACT LAW IN CONSTRUCTION It has also been stated by the postal rule that the process of acceptance is not maintained in cases of fax transaction. It has been observed in postal rule that acceptance can be held as the person post the letter of consent. It is not important whether the opposite party received the acceptance or not. However, in the case of fax, the other party should have to receive the acceptance. In case of any adverse situation, the acceptance will not create any binding agreement between the parties. According to the “mailbox rule”, contract through fax can be established when the offer maker will receive the fax. In the present case, it has been observed that the Benmark Steel Ltd has made an offer to Lands End Limited and certain conditions regarding the acceptance have been mentioned in this case (Bayern 2016). However, it has been observed that Lands End has accepted the offer and sent a fax within the stipulated period to the Benmark. The fax was delivered from the machine of Lands End. However, the fax machine of Benmark was troubled and the company could not receive the acceptance. According to the provisions mentioned in the Entores Ltd, contract through the fax can only be accepted when the offer maker will receive the response. In this case, Benmark could not receive the acceptance and therefore, it can be stated that no binding contract has been made in this case. Answer to question 2: In United Kingdom, there are certain forms of contract that are used in the civil engineering and construction projects. New Engineering Contract (NEC) is one of them (Chan 2014). This type of contract has been made by the Institute of Civil Engineers and provides certainguidelinesregardingtheconveyanceofconstruction-orientedprojects.Themain intention of this contract is to get tenders or award contracts. The relationship between the two
3CONTRACT LAW IN CONSTRUCTION contracting parties is well maintained by this contract. Further, the use of this contract is not limited up to the constructional circumstances. This contract can be used in different commercial situations. However, there are certain positive aspects present regarding the usage of this contract over other forms of contract. it is a fact that the terms mentioned in the contract are quite uncomplicated (Marsh 2017). Further, the terms that are being used in the contract are quite liberal in nature. The terms are constructed with the fit for purpose methods and are used to do commercialarrangements.Theprovisionsregardingtheriskallocationand financialand technical strength of the project have also been discussed under these types of contract. the contract has been drafted clearly and the phrases used in the contract are simple so that everyone can understand the facts of the draft and the roles and responsibilities of the parties are constructed chronologically. The contract has been drafted with an intention to make all the people follow the rules contained in it. The compensation provisions in case of breaching any rules have also been mentioned in this contract. a good management skill is required to draft such contract so that all the probable future dispute can be resolved in between the parties. New Engineering Contract promotes the idea on mutual approach and is very popular in the countries like United Kingdom (Al-Shammari 2017). It postulates the principle of good faith while making any contract with the parties. The rules mentioned in the contract are unswerving with the governmental regulation. Such contract offers more elasticity and malleability to the contracting parties and all the subjective terminologies are avoided during the drafting of the contract. All these characters have positioned this contract in the list of choices of the people. All the parties can understand all the requirements made in the contract and if any issue has been cropped up in between the parties that can be addressed and mitigated in a quick manner. In
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4CONTRACT LAW IN CONSTRUCTION certain circumstances, it can be seen that the contractors to a projects are asked to bear the responsibility for the unforeseen difficulties. Due to all these reasons, the New Engineering Contracts are positioned in a good place.
5CONTRACT LAW IN CONSTRUCTION Reference: Al-Shammari, M.A., 2017. USING THE NEW ENGINEERING CONTRACTS (NEC3) TO CONSIDERANDEVALUATETHELEGALLIABILITIESARISINGFROM CONTRACTUAL FAILURES: A CASE STUDY RESEARCH.Journal of Engineering and Sustainable Development Vol,21(03). Bayern, S., 2015. Offer and Acceptance in Modern Contract Law: A Needles Concept.Cal. L. Rev.,103, p.67. Bayern, S., 2016. Offer and Acceptance in Modern Contract Law.California Law Review,103. Chan, W.F., 2014.A Study Into Adoption of New Engineering Contract (NEC) Effectively to Reduce Dispute in Hong Kong Construction Project(Doctoral dissertation, City University of Hong Kong). Marsh, P., 2017.Contracting for engineering and construction projects. Routledge. Poole, J., Devenney, J. and Shaw-Mellors, A., 2017.Contract law concentrate: law revision and study guide. Oxford University Press. Sasso, L., 2016. Certain comparative notes on electronic contract formation.Право. Журнал Высшей школы экономики, (1). Stone, R., 2014. Offer and Acceptance. InQ&A Contract Law(pp. 23-46). Routledge.
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