Frustration Under English Law – Key issues in a global pandemic

The extraordinary circumstances that COVID-19 has forced us to adapt to are demonstrated by the fact that we are routinely looking at an area of law that has developed, primarily, as a result of world-changing events such as wartime shortages, the first Gulf War and the global financial crisis of 2008. How does Frustration operate? Frustration discharges both parties from all of their future obligations pursuant to the contract. It operates automatically. It requires no positive act by either party. It requires there to have been an “outside event or extraneous change of situation” which has arisen without blame of the person seeking to rely on it. The key is whether the situation makes the obligation pursuant to the contract impossible to perform, not simply more difficult, or even financially catastrophic for one of the parties. The circumstances that you must find yourself in have to be “radically different” from when the contract was concluded. The test has a high bar and…

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20 Changes in the FIDIC 2017 Editions

You probably know by now that FIDIC have published new editions of the Red, Yellow and Silver FIDIC Forms of Contract. I have highlighted 20 changes that are particularly relevant to claims practitioners. The Red Book now has 106 pages of General Conditions as opposed to the 1999 Edition which had 62 pages. The Yellow and Silver books have been similarly increased. The increased volume is said to be to bring greater clarity and include more procedures to be followed as a matter of contract. The word “Claim” is defined as ‘a request or assertion by either Party to the other Party for an entitlement of relief under any Clause of these Conditions or otherwise in connection with, or arising out of, the Contract or the execution of the Works.’ There is a provision to include a percentage in the Contract Data (formerly the Appendix to Tender) for profit and if no percentage is stated, the percentage shall be 5%. The term “No-objection” has been introduced and defined. “Notice” is defined…

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Why It’s Important To Understand Your Contract – From A Claims Perspective

Did you know that there are 11 clauses in the FIDIC Red Book form of contract that allow the Employer to claim money from the Contractor and 16 clauses that allow the Contractor to claim either time, money or both from the Employer? No? Well, to be honest, neither did I until I sat down and counted them when writing a book on the subject…and I have been dealing with the FIDIC contracts in detail and extensively for around 15 years! This just goes to show that if an ‘expert’ such as myself is sometimes surprised by things, then less-familiar users will almost definitely fail to appreciate all the nuances of what are very complicated contracts. Money is often tight in the construction industry. Employers are seeking the best possible prices for their projects and this often means that projects are let to less contractually aware contractors. Some of these contractors are not only unaware of their contractual obligations and rights but are not really capable of delivering the projects…

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Leading Edge in Construction Technology, but not Contracts

I recently read a contractual article in one of the major Middle East construction industry magazines. It took me a while to realise what the author was talking about, but it eventually dawned on me that he was using references from the FIDIC 1987 construction contract. The 1987 contract is over 30 years old and was superseded 20 years ago by the FIDIC rainbow suite. Whilst I have to criticise the author for not bringing his subject up to date, it is not an unusual occurrence for construction contracts to be entered into based on the 1987 contract and in fact, over the past couple of years I have been involved with several projects on which this form is still being used. Given the leading edge of construction design and technology used in the Middle East and particularly the Gulf countries over the past couple of decades, I would suggest that if anyone suggested to an Employer that they should revert to 1980’s construction design and technology they would be laughed at. Why then, do…

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Notices, Conditions Precedent and Time Bars

One of the questions I get asked the most at CPD events and workshops is in connection with notices. The questions are usually in the form of ‘If we fail to send a notice of claim, or we do not send the notice in time, will our claim be time-barred?’

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