Construction Law Assignment: Consultancy Agreements and Case Study

This construction law assignment delves into several key areas of the field. It begins with a critical analysis of two construction consultancy service contracts, comparing provisions for remuneration, client obligations, and copyright of works. The analysis highlights the differences in how these contracts address payment terms, client responsibilities, and intellectual property ownership. The assignment then reviews the case of MT Højgaard A/S v. E.On Climate & Renewables UK Robin Rigg East Ltd, examining the key issues and findings related to fitness for purpose and design life in construction contracts. Finally, the assignment requires completion of the RICS ‘Ethics Walkthrough’ online course, emphasizing the importance of ethical standards in the construction profession. The report provides a comprehensive overview of these aspects of construction law, offering insights into contractual agreements, legal precedents, and professional ethics.

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Q2: Critical analysis on 2 consultancy services contracts
Introduction
The Conditions of Contract for Consultancy Services was an agreement jointly developed by
Auckland Region Contracts Group alongside Transit NZ in 2000 to provide general conditions
that are meant for to be adapted or amplified as needed to fit a certain engagement using
Special Conditions.
NZIA Agreement for Architects Services is a documemy that outlines the clear phases within
the standard contract for offering architectural services as part of the requirements of
information in supporting a design statement as from the deliverables which would be expected
to be offered by a qualified designer to the client.
Comparison of Provisions for
I. Remuneration
CCCS construction professional consultancy service discusses enumeration in two sub-clauses:
time for payment as well as disputed alongside unpaid invoices.
Terms of payment: The client has to pay to the client all the sum of money claimed as well as
owed under the Agreement within stipulated set out time in Special Conditions.
Unpaid & Disputed Invoices: In case a client rejects an invoice in part or whole, client has to
offer basis for withholding the amount that is under dispute promptly and do payments of any
undisputed amounts (Wright & Fergusson, 2009).
In cases where an invoice or its part has not been disputed and the payments are not made as
expected in the clause above, the client is obliged to pay the interest on any amount that is not
paid from date it was due until date of actual payment at non-penalty overdraft interest of the
consultant.
NZIA AAS construction professional consultancy service provides the following standards:
Accounts for fees may be rendered each month by the Architect or otherwise at some interval
and the client has to: remit all the undisputed amounts as claimed and due as per the
Agreement and with regard to any amounts that have been disputed, and regardless of whether
the account is part of payment claim under the Construction Act 2001, offer details as well as
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the reasons regarding not making the payments to the extent needed for any payment
schedule, with 10 working day of the account date without further deduction or set-off
The two construction professional consultancy services provide similar standards as far as
remuneration is concerned as each of them provides for compelling the client to make payments
of the amount owed within the provided time frame. However there is a difference as far as not
making payments on time is concerned. CCCS provides for the client paying interest on the
amount delay for the time delayed (Rajeh, Tookey & Rotimi, 2015).
II. Client’s Obligations
NZIA AAS provides that the client is obliged to make payments to the architect for the services
agreed as per the provisions of Part C and Section D7
CCCS provides for an obligation of the client to make payments to the construction professional
consultancy service as per the terms as well as conditions that are outlined in the Appendix B
and anywhere else in the Agreement. The client is as well obliged to offer information to the
consultant with regard to:
 Offering information that is free of charge
 Making a declaration of the property rights or any ownership rights
 Offering additional information deemed relevant
 Accepting the responsibility of the information accuracy offered
Client Decision: The client is obliged to offer responses any requests in written form from the
consultant for a decision arrived at within a timeline deemed reasonable to minimize chances of
delay to providing works or services. In cases where the services are to be offered in phases,
the client has to append his approvals to the current stage before the Consultant is able to move
to the subsequent phase (Loosemore, Lim, Ling & Zeng, 2018). Where the client has concerns
regarding the current phase, communication is made through writing before offering an approval
to enable the consultant get to the subsequent phase.
Other consultants: In case where the client is obliged to coordinate or direct the work performed
by other consultants, the terms of the contract with the other consultants have to be included
and they will serve under the watch and instructions of as well as cooperate with the Consultant
 Arrangement for and payments for the services offered by other consultants have to be
made
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 Responsibility of the work or services offered other consultants is bestowed upon the
client
Going by the above provisions, CCCS tends to attach a role of obligations to the client that
make him be an integral part of the agreement and leaving at his disposal a lot of
responsibilities. On the other hand, NZIA AAS just obliges the client to make the payments for
the services rendered by the consultant without defining further what happens thereafter. This
may be interpreted as an assumption that upon making payments, the consultant will take
responsibility that is associated with the provision of works and services (Samorow, Davies,
Puolitaival & Kestle, 2018).
III. Copyright of Works
Among the provisions regarding copyrights of property or intellectual property, CCCS outlines
that:
 There is no guarantee of the suitability of the new intellectual Property for any functions
apart from Services or otherwise any stated in the Agreement
 It is to the ownership and right of the Consultant to use the information disclosed or
offered to consultant under agreement
 Ownership of factual information as well as data gathered by Consultant with payments
made by client upon making payments is with the client
 As of clause 9.6, every new intellectual property that is held in any form of medium
would be co-owned by Consultant as well as Client and thus both grant to other an
unlimited royalty free licence in perpetuity to use or eve copy part of or whole of new
intellectual property without necessary having to obtain the consent of the other or
explain any possible future benefits.
NZIA AAS provides that all the rights inclusive of copyrights exclusively belong to the Architect.
The client is granted non-exclusive licences which is not assignable to use the Service Materials
only for functions that are related to the project and not any other purpose. The provision of the
licence is conditional and only viable as soon as the client successfully complies with the
obligations of the client under the Agreement inclusive of all fees as well as the due
disbursements.
In case the agreement ends prior to the completion the licence remains applicable even though
to the finished Material Services only (Finnie & Ali, 2015).
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The agreement under NZIA AAS provides exclude property rights to the Architect and in case
the client intends to use any of the intellectual part or part thereof, the consent of the architect
has to be sought in order to be granted a license which is subject to conforming to the
obligations of the client. On the other hand, CCCS provides for co-ownership of every
intellectual property that in available making either of the parties free to use the property at
convenience. This offered limited immunity to the property as it may be subject to manhandling
and misuse.
Q3: Case review - MT Højgaard A/S v E.On Climate & Renewables UK Robin Rigg East
Ltd and another
Key issues ad findings of the case
The services of MT Højgaard A/S were sought by E.On Climate and Renewables UK Robin
Rigg East Limited in 2006 to design, install as well as fabricate 60 wind turbine foundations in
Solway Frith for Robin Rigg offshore wind farm.
Part of contract was Clause 8.1 (x) that outlined, “The Contractor shall, in accordance with
this Agreement, design, manufacture, test, deliver and install and complete the Works so that
each item of Plant and the Works as a whole shall be……. fit for its purpose as determined in
accordance with the Specification using Good Industry Practice”
The Technical Requirement offer that design should be as per universal standard in design of
the offshore wind turbines and as well that design of every foundation will ensure a 20 years
lifetime in each part.
The issue in the case was to determine if contract included an express warranty compelling MT
Højgaard A/S to attain a service life for foundations of the wind farm of two decades as
opposed to a design life of the same period.
The findings
In the reversal of the initial instance judgement, the Court of Appeal maintained that on an
adequate construction, the contract was not inclusive of a warranty for the service life of 20
years (Jaffe & Chappell, 2018). The Court of Appeal offered very precise distinction between
service life & design life outlining should a structure have a design life of 20 years, then that
would not absolutely mean it will be functional for 20 years even though it ought to be.
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Following the wording that is used in Technical Requirements, The design of foundations will
ascertain a lifetime of 20 years,” Court of Appeal made a statement at initial sight, that the
clause, in case included into the contract would offer a warranty compelling that the
foundations must be operational for 20 years. The Court of Appeal, nevertheless, noted that
Technical Requirements found numerous references to foundation requirements to be having
a design life of 20 years. Besides, DNV-OS-J101 standard was anticipated to be adopted in
offshore structures with design life of two decades.
The Court of Appeal as well maintained that Contract provision was not composed of at all
free standing guarantee or warranty. The sentiments in Clause 8.1 (x) providing that work in
their entirety be fit for its purpose would be qualified by the clause “as determined in
accordance with Specification using Good Industry Practice”. Good Industry of Practice as
defined by Contract called for exercise of reasonable care and skill alongside complying with
the standard of DNV-OS-J101 even though didn’t impose a guarantee as to operational life
length (Wilinson, Suzanne & Scofield, 2010).
The Court of Appeal, on the cross-appeal, established that MT Højgaard A/S breached the
test data as well experimental proof needs even though concluded such tests will not
necessarily have uncovered defects which took place hence there was no loss as a result of
the breach. Therefore, E.On was entitled to a recovery of £10 nominal damages only.
The law states that in the non-existence of any terms and conditions in written form in
contravention of the same, a skilled and professional designer is tasked with the responsibility to
ensuring him actions are with reasonable skill as well as care. Such a duty is extracted from
Supply of Good and Services Act 1982 that expects the services supplier to offer the service
with what is termed as reasonable skill and care and the test for negligence common law that
outlines that any professional individual is not deemed negligent should s/he perform his work to
same level another member who is adequately competent of the same profession will meet.
Owing to the dependence on skill and judgment, the duty of a designer does not obviously
compel him to attain a certain outcome provided he has done the required care level (Carson &
Abbott, 2012).
Fitness for purpose on the other hand rest a greeter duty as it offers an express responsibility to
attain a certain outcome that if breached doesn’t need evidence of negligence. Such insinuates
that a contractor is sufficiently guaranteeing the segments as well as the finished structure
would be fit for the intended purpose of design.
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It is of importance that the parties involved in a contract take into considering the issues that
touch on responsibility and risk when going into negotiations for construction contracts but
specifically where build and design are joined (Seuffert, 2018). Absolute obligations for fitness
for any function related to design ought to still be approached with a lot of caution and dilutions
provided where needed and possible since a clause on reasonable skill and care may not be
such protective against absolute obligation in attaining a specific work standard.
Relevance of English cases in New Zealand
New Zealand has looked into the courts of England as used them as sources of precedents so
as to apply grounded principles as well as rules. The issues that came before the New Zealand
courts have gained greater complexity with the development of local statutes making the
countries to expand the number of countries from which they examine foreign cases.
The English cases have aided New Zealand in coming up with solid decisions that are based on
international standards and practice of justice in the determination of the various cases. Owing
to the fact that the system of common law give focus on using the precedents in ensuring that
the decisions are legitimate, the factor translates to the fact that judges will normally seek to
depend on the decisions that have been made by the foreign courts in the interpretation of rights
as opposed to beginning from scratch (Zeveleva, 2019).
Lessons can be learned from the decision in this case
 There may arise uncertainties in cases a contractor is needed in order to abide by a
specific industry standard
 Contractors should often take into consideration the implications of insurance should a
contract be inclusive of absolute warranty
 It is important that a clear difference is made is between the obligations which are
absolute against those which are subject to reasonable care and skill in case the
documents of construction ideally include specifications as well as standards prepared
by various institutions
Q4: Discussion on tender withdrawal
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Introduction
The lack of a proper comprehension as well as wrong interpretation in contract and agreement
would commit ignorance of the intended terms contained within a contract. By far and large,
mistakes may be linked with misrepresentation, negligence as well as fraud as some of the
mistakes committed by either be in good or bad faith as it may result in confusion to the parties
involved (Castellano, 2015).
Discussion
The process of tendering comes with time as well as cost implications in which the process of
tendering is adopted as it is not a liability to the tenderer. The possibility of withdrawing from a
tender has no universal legal provision and is a matter that is to be decided upon by the
contracting company. Nevertheless, withdrawal from tenders may have an effect on the timely
completion of a project especially in cases where the withdrawals are made to correct a mistake
that was made at the time of tendering by the contractor.
The bid security is used in the protection of the implications of withdrawal from tender by
contractors; a bid security defines a sum of money that may be determined as a fraction of the
budget estimate of the requirement of procurement or a fraction of the bid price of a bidder. It is
often used by the client to serve as protection against the tenderers withdrawing from tenders
before the end of the validity period of the bid or for turning down signing the contract (Thomas
& Wright, 2016).
The intention of the bid security is to deter tenderers from withdrawal of their tenders as such
would make them forefeet the amount of bid security to the client. It offers the client some extent
of guarantee that the chosen bidder will be ready to sign the contract or abandon their bid
security.
A bid security may be needed of combines who submit offers responding to bid invitations. It is
seldom used in cases where procurement of non-consultant services, goods and services is
done even though applicable should it be outlined in the bidding document as well as in the
rules of public Procurment.
Nevertheless, in cases where the Procurment method adopted do not allow quoting the budget
that has been allocate, the bid security should be carefully set as a fixed sum of money or
fraction of the tenderer’s tender as opposed to a fraction of the budget that has been allocated.
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This would be preclusive of inadvertently or indirectly quoting the budget through setting the
amount of bid security as a fraction of the approximated budget for requirement of procurement
(Zhao, Feng, Pienaar & O’Brien, 2017).
A bid security guarantee is often acceptable in either of each of the formats:
 Bond
 Certified check
 Irrevocable credit letter
 Unconditional bank guarantee
Conclusion
The bid security has to be dropped to the client in case the bidder:
 Does not sign the contract upon notification of the validity period of the bid
 Withdraws his tender prior to the lapse of the validity period of the bid
 Does not provided a performance security if needed
Words=2804
References
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Zhao, X., Feng, Y., Pienaar, J., & O’Brien, D. (2017). Modelling paths of risks associated with
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