Construction Contract Law: Suspension, Termination, and Negligence

This report provides a comprehensive analysis of construction contract law, addressing key aspects such as suspension, termination, and negligence within the construction industry. It examines the employer's obligations regarding payment, the contractor's right to suspend work, and the implications of termination under both common law and contractual terms. The report delves into the legal principles of builder's liability, professional negligence, and the use of collateral warranties and third-party rights. It references the JCT 2016 standard form of contract and relevant legislation like the Housing Grants, Construction and Regeneration Act 1996. The analysis covers scenarios involving defective buildings, economic loss, and the importance of adhering to contract stipulations to avoid legal disputes. The report also highlights the significance of clear definitions, such as 'material breach,' and the impact of termination on various parties within the construction supply chain.

Running head: CONSTRUCTION CONTRACT
CONSTRUCTION CONTRACT
Name of the student
Name of the university
Author note

1
CONSTRUCTION CONTRACT
Section A
Answer to Question 1
Major construction undertakings are complicated agreement engaging diverse commerce
as well as several parties that are suppliers, sub-contractors, and sub-sub-contractors. Thus
despite the complication the general target is to conclude the undertaking within the specified
time1. Fulfilling the mutual objective is especially challenging due to the fact that the
construction undertakings are generally affected by the impacts of both internal that is the fault
of the contracting parties and external that is action and natural occurrences by the governmental
agencies or the third parties that are beyond the dominion of the parties. Thus all the influences
inclined to delay the conclusion of undertakings2.
For the purpose of providing proper incentives, however there require to be a proper device for
the functioning of the cycle of payment to be applied. This is clearly envisaged in JCT 2016
standard form of contract that is made in obedience with the Housing Grants, Construction and
Regeneration Act, 1996taht miscarries to cater to pay less intimation will imply that payment
should be made3. Despite having a high margin of consensus, contracting parties might have
while negotiating the construction undertakings it is wise to facilitate for the probability of the
1 Chappell, David. Understanding JCT standard building contracts. (Routledge, 2017).
2 Lupton, Sarah. Which Contract?: choosing the appropriate building contract. (Routledge, 2019).
3 Brook, Martin. Estimating and tendering for construction work. (Taylor & Francis, 2016).

2
CONSTRUCTION CONTRACT
association of them turning sour4. This is the cause of the standard form of the construction
undertakings envisage conditions that entitle the parties to suspend the further conduct of the
liability under the agreement or bring the association to conclude by terminating the
arrangement. One of the entitlement that is guaranteed under the agreement is the right of the
contractor to suspend for non-payment. Consideration is given as the factor that provides the
legal impact of the contractual obligation that is conferring on the distinct parties as well as the
right to terminate or suspend the arrangement.
Suspension engage bringing the construction undertakings to the provisional standstill by
stopping for the particular period the conduct of the liability that is enumerated in the agreement.
The suspension of the undertakings is not designed as a permanent action. The significant
construction agreement must facilitate clear rules on the period the suspension of the contract
may last. The entitlement of the employer to suspend the arrangement is solely rest on the
agreement. There exist neither statutory right nor common law for the employer to suspend the
construction agreement. Nevertheless the entitlement of the employer is necessary permitting the
employer to stay its liability under the agreement without incurring expenses as well as finality
that arrives with the termination. It is significant at the stage of negotiation for the employer to
guarantee that the entitlement to suspend is involved in the agreement stipulations. It is also at
the phase that the employer must pact with several issues that are as follows. The contemporary
United Kingdom standard form of contract facilitates for the right of the employer to suspend. In
accordance to clause 3.10 of JCT Design and Build Contract, 20165 the employer in the
4 Thomas, Reginald William, and Mark Wright. Construction contract claims. (Macmillan International
Higher Education, 2016).
5 Adriaanse, Mr John. Construction contract law. (Macmillan International Higher Education, 2016).

3
CONSTRUCTION CONTRACT
construction project may publish instruction with respect to the postponement of the project to be
implemented under the agreement. Thus it is clear that the right of the employer to interrupt is
not based on the mistake of either parties or the happening of the event. The clause empowers the
employer of the project to suspend at any point in time. The continuous duration of length as
enumerated in the particulars of contract that is implemented to clause 8.9.2 is the significant
term that is subject to the negotiation. It guarantees the maximum duration that is permissible of
the employer to postpone the work under clause 3.10 as the entitlement to postpone is not
unlimited.
Answer to question 2
In case the contractor under clause 8.9 has to dismiss the arrangement due to the
suspension that has been extended beyond the specified date the termination is classified as
arising out of default of the employer. This must authorize the contractor to lose of profit as well
as the damage. The contractor must be careful to cater intimidation necessary prior to the
entitlement to terminate is stimulated. It is generally applicable for the construction undertaking
to positioned obligation on the part of the employer in respect of the direct expense or loss
evolving from the suspension that involves remobilization expense. In the context of security of
materials the contracting parties must approve on the way of storing and securing the materials
for the construction undertakings to evade deterioration, damage or loss with the limit of liability
of the employer to make payment for the charge of doing so6. In the context of entitlement to
6 El-adaway, Islam, et al. "Change order provisions under national and international standard forms of
contract." (2016) Journal of Legal Affairs and Dispute Resolution in Engineering and Construction 8.3:
03716001.

4
CONSTRUCTION CONTRACT
remove plant and machinery the parties must approve on the limit to which the contractor is
permitted to reorganize machinery and plant that is being applied for the undertakings. This is to
permit the employer to accomplish the expense of remobilization more effectively while
permitting the contractor to alleviate any loss evolving from the deficiency of functioning
impacting from the postponement of the undertakings. From the perspective of the performance
of insurance and bonds the contracting parties must approve on the method payment as well as
other obligations under the auxiliary agreement must be organized during the period of
suspension. Furthermore, it is significant to note that Section 112(1) of the 1996 Act guarantees
that the practice of the entitlement to suspend the contract by the contractor does not prevent it
from other relief that is obtainable under the agreement or at the common law that is the measure
for claiming damages. The contractor must also regard how the suspension of the arrangement
might affect other associates of the supply chain which are reliant on the contractor.
Termination of the contract is designated as the procedure by which the contracting
parties individually and prior to the conclusion of the undertaking brings the construction
agreement to an end by either the procedure that is set forth in the arrangement or by the
implementation of rights that is evolving under the common law7. Termination can be of two
routes that is termination under the common law and termination under the contract. It is a
common rule for the construction agreement for the contractor or the employer to terminate the
agreement on the happening of a specified incident. The entitlement of the contractor to
terminate is historically connected to the nonpayment of the sums that is unpaid by the employer
7 Ter Haar, Roger, Anna Laney, and Marshall Levine. Construction insurance and UK construction contracts.
(CRC Press, 2016).

5
CONSTRUCTION CONTRACT
or the expectation of incapability of the employer to fulfill the requirement under the agreement.
The right of the contractor to terminate the agreement has expanded in the contemporary period
to the non-financial liabilities such as miscarries to provide accessibility to the site in addition to
that enduring the suspension beyond the approved longstop date.
Answer to question 3
In terminating in pursuance with the agreement the distinct parties must closely monitor
the stipulations of the arrangement and provide the intimation that is enumerated for under the
agreement. The danger is not monitoring the conditions of the contract is that the distinct parties
are at the option to treat the termination or intimation as the repudiatory violation of the
agreement ad to take action party who are terminating for compensation. To permit the
contracting parties to cohere closely to the conditions of the arrangement it is significant for the
draftsman to be precise and clear regarding the grounds on which the parties might terminate a
construction agreement in addition to that describe properly any general words that are applied8.
One term frequently insufficiently describes the material violation. The term generally
characterize in contract down the supply chain of the process of construction9. It is usually stated
by the draftsman that the distinct parties might terminate the arrangement on the material
violation of the agreement by either of the parties. There is no usually approved statutory
8 Chern, Cyril. The law of construction disputes. (CRC Press, 2016).
9 El-Adaway, Islam, et al. "Studying payment provisions under national and international standard forms of
contracts." (2017) Journal of Legal Affairs and Dispute Resolution in Engineering and Construction 9.2:
04516011.

6
CONSTRUCTION CONTRACT
definition of the term. The court regarded the material violation in the case of National Power plc
v. United gas Company Limited [1998] All ER (D) 312. In the case the plaintiff under the
contract agreed to sell gas to defendants. The contract facilitates the termination with
instantaneously impact on the material violation that is being committed by the distinct parties in
case the defaulting parties miscarries to compensate such violation within a period of seven days.
The contract does not invite definition for the expression "material breach" the issues
evolve as to whether the miscarries of the plaintiff to facilitate with the defendants with the
requesting information in addition to that miscarries to compensate the default within the period
of seven days was adequate to be classified as a material violation under the arrangement. The
argument raised by the plaintiff was that the material violation was identical to the fundamental
violation was disallowed as the court took the opinion that since the agreement had facilitated
with the entitlement to compensate the violation it would be inappropriate to describe the
violation as fundamental. Nevertheless the court held that the violation that is complained of was
of the minor business impact and in the view of the court does not amount to the material
violation the parties had in observation10. It is significant for the distinct contractual parties to be
clear at the time of drafting termination entitlements in the construction agreements. The ideal
place is for the agreement to stipulate exactly what terms or the occasion of default authorize the
parties to terminate the agreement and what meaning of the significant expression from the
perspective of the agreement. The standard form of the construction agreement facilitates
several; events of default and the contractual parties are at the option to supplement the same. in
10 Liu, Jianlin, and Jianlei Niu. "CFD simulation of the wind environment around an isolated high-rise building: An
evaluation of SRANS, LES and DES models." (2016) Building and Environment 96 91-106.

7
CONSTRUCTION CONTRACT
addition to the entitlement to terminate the contract by observing any stipulations as set forth in
the agreement the party is supplementary authorized to terminate the construction contract under
the common law. Termination of the agreement under the common law necessitates the
defaulting parties to commit a violation of the terms of the contract that is treated to be the
stipulation of the contract and not to be treated as a warranty.
The section discovers more depth some concerns evolving from the termination of the
agreement under the construction law of the United Kingdom11. The place of the statute on the
obligation of the parties wherein the employer terminates the agreement at the time of the
procedure of adjudication came for the determination in Westwood Structural Services Ltd v.
Blyth Wood Management Company Ltd [2008] EWHC 3138 in the case the employer
terminated the employment of the contractor under the agreement during the period of pending
of adjudication but prior the adjudicator had arrived in a decision. The question for identifying
was whether the practical completion had attained by the contractor. The adjudicator dropped the
jurisdiction on the issue of the correctness of the termination by the employer. Thus the
adjudicator in the case held that the contractor was authorized to the payment that was totaling
40,000 in addition to that VAT for carrying the work to the practical completion along with that
ordered payment within seven days12.
11 Finnie, David, Naseem Ameer Ali, and Kenneth Park. "Enhancing off-site manufacturing through early contractor
involvement (ECI) in New Zealand." (2018) Proceedings of the Institution of Civil Engineers-Management,
Procurement and Law 171.4 176-185.
12 Srivastava, Santosh. Administration of Construction Contracts. (Notion Press, 2016).

8
CONSTRUCTION CONTRACT
Answer to question 4
The professional negligence can be described as miscarries to conduct professional
obligations such as designing or providing advice. There are probable to move from the violation
of the terms of the contract that is implied or express terms or in the tort or delict as the
presumptions of the obligation on the grounds of D & F Estates, Murphy and Bates that has been
reestablished the conservative opinion in the statute of tort in the zone of recovery for the
financial loss impacting from the negligent act. Clearly this is beneficial from the viewpoint of
the developer and builders however it did not provide the remedy to the owner or the occupier
whose land had been affected by the building defects impacting from the negligent construction
effort13. What cause can be put forward for denying recovery for the economic loss impacting
from the negligence of the builder? The following involves the arguments that were put forward
in House of Lords. The general cause is the "floodgate" argument. In another manner it would
expose the floodgates to the prospective limitless quantum of allegations thereby unfolding the
particular defendant to the probability of indeterminate obligations14. That would establish a
larger zone of tortious obligation constituting to the judicial legislation that might in itself not be
considered as the appropriated exercise of the judicial function.
13 Simmons, Chad R., et al. "Construction and structure determination of a three-dimensional DNA crystal." (2016)
Journal of the American Chemical Society 138.31 10047-10054.
14 Rasooli, Arash, Laure Itard, and Carlos Infante Ferreira. "A response factor-based method for the rapid in-situ
determination of wall’s thermal resistance in existing buildings." (2016) Energy and Buildings 119 51-61.

9
CONSTRUCTION CONTRACT
In connection to the arguments that permitting the recovery in the instance of negligence
for the defective buildings would execute transmissible warranty of the quality, the house of
lords desires to reinforce15. Firstly the demarcation between the duties under the tort and
contract. Secondly the obligation for the defective structure as well as defective products as the
material of notion belongs to the zone of contract legislation and not under the tort law.
Section B
The procedure of adjudication is the dispute resolution method that is employed in the
construction project that provides a statutory basis as per the 1996 16Act as well as a range of
statutory mechanisms involving the Scheme for Construction Contracts17 (England and Wales)
Regulations 1998. According to the opinion of John Uff, it is the broadly applicable method of
dispute resolution that is employed in the construction industry of the United Kingdom18. The
decision put forward by the adjudicator is enforceable until the disagreement is finally settled in
between the contracting parties by other obtainable methods, however, it seems that 90 percent
15 Mason, Jim. Construction law: from beginner to practitioner. (Routledge, 2016).
16 Trushell, J. M. "THE ADJUDICATION REPORTING CENTRE TWELVE YEARS IN RETROSPECT." (2017).
17 Todd, Nicholas, and Elimma C. Ezeani. "Adjudication costs under the Housing Grants, Construction and
Regeneration Act 1996: the attractions of Singapore's Building and Construction Industry Security of Payment Act
2004." (2016) Juridical review 4.
18 Hetherton, Tony, and Jennifer Charlson. "When statutes collide: potential recovery of own party adjudication
costs." (2015).

10
CONSTRUCTION CONTRACT
of decisions are either approved or resulting in the settlement and thus in either occasion do not
inclined to further actions.
Critical analysis
The adjudication is s method of dispute resolution that is in the manner as set forth under
both the 1996 Act as well as the default statutory scheme that lies in between expert
determination and conventional arbitration. Primarily adjudication has contractual form although
where the contractual agreement miscarries to comply with comprehensive necessities of 1996
Act, the statutory arrangement as contrasting to anything that is literally contained in the
agreement applies by the default. The arrangement of the contractual parties is thus the
foundation of the authority of the adjudicator to act19. The demarcation between the arbitral
determination and the expert determination might be fine. Thus generally an expert is obligatory
to practice her or his judgment and skill in arriving at decision and could in opinion be sued for
the negligence20. Furthermore the court is unwilling to challenge the decision of expert except the
expert acted in a fraudulent manner or has conspired with any one of the contractual parties in
dispute.
The demarcation in between arbitral and expert determination is identified in the case of
Campbell v. Edwards might have less practical relevance in the perspective of adjudication set
that the statutory scheme necessitates the adjudicator to consider to the significant information
19 Skaik, Samer Hisham. Introducing review mechanisms into statutory construction adjudication. No. PhD.
(Deakin University, 2017).
20 MUTHALIB, MOHD FAISAL BIN A. CONTRACT IN WRITING REQUIREMENT FOR STATUTORY
ADJUDICATION CLAIM UNDER CIPAA 2012. Diss. (Universiti Teknologi Malaysia, 2018).

11
CONSTRUCTION CONTRACT
that is submitted by the contractual parties and to make obtainable to the parties any data taken in
consideration in arriving at decision. To the degree, the adjudication edges to the process of
arbitration. The legislation emphasizes the positioning by expressly facilitating that adjudicator is
not to be entitled to anything that is done or mislaid in the release of adjudicatory duties expect
they conduct in bad faith. Nevertheless, the statute rebalance the adjudication in the way of
expert determination by facilitating both under Section 108(2)(f) of 1996 Act as well as the
scheme itself that adjudicator might take attempt in determining the fact as well as the legislation
require to identify the disagreement of the parties.
The evolving resolution procedure is consistent with the aim of Latham Report to
facilitate a procedure that is rapid as arguably it is less somewhat than more probable to be the
subject matter of the subsequent encounter by the means of protracted actions such as litigation
or arbitration. The statutory outline of arbitration evolves from the recommendations of "Sir
Michael Latham report, constructing the team". The report concluded that the adjudication must
be the normal procedure of the dispute resolution in the construction business. The legislative
right to mention the dispute to adjudication is obtainable in the cases where the agreement comes
with the meaning of construction contract as envisaged in Part II of the 1996 Act. The definition
from Section 104 to 107 of the 1996 Act determines both categories of the agreement to which
the adjudication applies as well as those which are omitted from the scope of the statutory
adjudication. Statutory adjudication thus foes not applicable if the meaning of construction
agreement is not fulfilled.
The construction agreement within the connotation of Part II of the 1996 Act is the arrangement
in connection to the construction operations. Construction work is involved as particular services
of the consultancy nature such as design, architectural, services and other advisory assistance.