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PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
BY A POACHER TURNED GAMEKEEPER
STEPHEN TENNANT, Director - Plus Three Consultants (HK) Ltd
CONTRACTS, DISPUTES,ETHICS AND ARCHITECTS
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
Today’s Discussion
• Contracts– Who needs them?
• Disputes– Origins and effect of Change.
• Ethics and Architects– Duties and Liabilities.
• Crystal Ball Gazing
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Why do we need Contracts?• To provide a
description of responsibilities.
• Bind parties to their duties.
• Establish a time frame for duties.
• To secure payment.• To provide recourse
when the relationship falters.
• Best to be in writing, but oral contract can be valid!
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
Where do Disputes come from?
Change!!!
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Change?• Revised/New
Drawings.• Revised/New
Specifications.• Revised/New
Timings.• Revised/New
Requirements.
• Changed Law/ Regulations.
• Changed Weather.• Changed Economy.• Changed Labour
Situation.• Changed
Expectations.
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
How does the Contract Address Change?
• Does the Change fall within the scope of the Variation Clauses?
• Does the Change fall within the scope of the Claims Clauses?
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
What are the Architect’s primary duties?
• Design the Project, or approve the Design for the Project.
• Administer the Contract.
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
How does the Architect undertake his duties?
Rule 3.2A member shall inform his client in advance of the Conditions in the HKIA Agreement and shall agree with his client that those Conditions shall be the basis of his appointment.
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
How does the Architect undertake his duties?
Rule 1.3A Member shall act impartially in all cases in which he is acting between parties, and shall interpret the conditions of a building contract with fairness.
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Impartiality and the Architect• How do you tell the
client you got it wrong?
• Should I give the client a draft of my award for approvalcomment?
• Its OK to do what the client says, isn’t it?
Reality Check• Who pays the
Architect’s Fees?• Who gives the
Architect more work?
• Who is in charge of the Design?
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Fairness and the Architect• Architect not a party
to Contract (privity of contract!).
• Architect cannot change or ignore terms of Contract.
• Who is the Architect liable to?
Reality Check• Are Contracts fair?• Should the Contract
be fair?• Apply a fair
Contract unfairly?• Apply an unfair
Contract fairly?
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Who is the Architect Liable to?Third Parties
• Liability in Tort (duty of care).
• If acts or omissions cause loss and damage to “other” person or “other” property.
• Subsequent purchasers?
His Client• Express terms under
Contract.• Implied terms under
law.– e.g. reasonable skill
and care– Higher standard if
employed by Contractor under D&C Contract
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Architect Liable to Contractor?
• No privity of contract.• Act /omission of Architect can
adversely affect Contractor directly.• It WAS the law that an Architect does
not owe duty of care (liability under tort) to Contractor in issuing certificates.
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Architect Liable to Contractor?
• In 21st Century, law continues to develop, and change!
• Some Courts now considering liability of Architect to Contractor as certifier.
• Architect has been found, in some cases, as certifier, to owe duty of care to Contractor.
• Developing area of law!
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Liability from BIM?
• Multiple parties inputting into model.• Who owns the model?• Are you jointly and severally liable
(Only 20% to blame but 100% liable!)?• Absence of case law, at the moment!• Does your PI Insurance respond?
PLANNINGPROJECT CONTROL
FINAL ACCOUNTCONTRACT CLAIM
ARBITRATIONEXPERT WITNESS
www.plus3.com.my
COMMERCIALCONTRACT MANAGEMENT
www.plus3.com.my
Architects and the Future?
• More complex projects.• Increased liabilities for Architects.• You look after your client.
But who looks after You?
n Preliminary Claim Evaluation Reportn Technical Issue Analysis
n Schedule and Delay Analysisn Loss of Productivity, Acceleration and Out Of Sequence Work Analysis
n Damages Quantification
n Defective Plans and Specifications Analysisn Claims Avoidance
n Quantum & Delay Expert Reportsn Change Order/Claims Evaluation, Preparation and Negotiation
n Mediationn Documents Discoveryn Litigation Support
n Exhibits Preparationn Expert Witness Testimonyn Project Management and Contract Managementwww.plus3.com.my
PLUS THREE CONSULTANTSContractual & Commercial Services For Construction, Infrastructure and Oil & Gas
Thank You
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