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“Be careful out there”

John Sheils is a partner at Shadbolt specialising in wide range of building and civil engineering disputes, with clients including local authorities, developers, architects, engineers, main contractors and sub-contractors. He has also acted in international arbitrations on behalf of French contractors. John lectures widely and is a visiting lecturer at Kingston University.

I can never seem to get to the TV these days. If it is not Big Brother on Ice it’s Strictly Come Dancing in the Jungle. The valkyrie has monopolised the TV. However, I do encourage her to watch Casualty in the vain hope that she might one day become a doctor and bring honour on our family especially now that the Little Prince has announced that he wants to be a lawyer… God forbid!

Anyhow, I did manage to get a look at the beautifully filmed programme about the Olympics that was put out on BBC2 recently.

While watching this programme my mind turned once again to the NEC, the favoured contract for the Olympics and especially the Third Edition and what appears to be a nasty condition at precedent clause 61.3 which states that if a Contractor does not notify a Compensation Event within eight weeks of becoming aware of the Event he is not entitled to a change in prices, the Completion Date or a Key Date.

Thus it would appear to be perfectly possible for a Contractor to be delayed by the actions of the Employer and still get lumbered with Liquidated Damages.

According to at least one Australian case called Gaymark such provisions are unfair. However, our brothers in Scotland in a case called City Inns held that the contract means what it says. 

As for our own jurisdiction, it is notable that Mr Justice Jackson made the following observation in the case of Mulitplex Construction (UK) Limited v Honeywell Control Systems Limited.

Contractual terms requiring a contractor to give prompt notice of delay serve a valuable purpose, such notice enables matters to be investigated while they are still current. Furthermore, such notice sometimes gives the Employer the opportunity to withdraw instructions when the final consequences become apparent. If Gaymark is good law then a Contractor could disregard with impunity any provision making proper notice a condition precedent. At his option the Contractor could set time at large. 

Although I have considerable doubts that Gaymark represents the law of England nevertheless that is not a question which I am required finally to decide”.

In the later case of Steria Limited v Sigma Wireless Communications Limited his honour Judge Steven David in considering the notice requirements in the MF/1 form stated that he would “gratefully adopt [Mr Justice Jackson’s] analysis and agree with his preliminary conclusions”.

What I would say about all of this is ‘be careful out there’. As they used to say in Hill Street Blues in a time when we still had decent telly.

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