CMS800003 Construction Law

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Define the Legal Principles that apply and the hierarchy of contract documentation.

What legal consequences would it have to stamp “approved” specifications on any future contractual position.

Discuss and explain the relevant legal principle.


Contracts are very common among construction workers.

It could be a Subcontractor and General contractor, Builder and Architect, or the Owner/Contractor.

Contracts are frequently subject to changes to accommodate the work demands. Parties may also agree to amend certain terms.

There are many situations where modifications can be made on the spot, but it is unlikely that writing will be possible. This could lead to oral amends.

You can also change the terms in writing at the office.

The paper will also look at the dispute between a builder or architect. It will determine if the oral modifications to the contract are part of the main contract.

Part A (1) Formation A Contract. The issue is about the formation of a contractual agreement and its amendment.

First, this paper recognizes the existence of a written agreement between Agro Builders (Ego Architects).

An agreement is valid if it contains five key elements. This scenario being the case, the paper will discuss the elements that make an agreement enforceable.

The offeror must make the offer to the recipient in order to create a valid contract.

Agro Builder began by offering Ego architects a draft of the architectural drawings.

After the offer has been made, the offeree must reply with an acceptance.

The terms and conditions of the offeree should be complied with by their acceptance.

Ego architects, in this case, accepted the offer and paid the amounts. It also agreed to the terms, which included drawing payments on a 3-stage schedule.

The law recognizes that the offeree and the law create a contract. Each party can then start performing the terms of the contract.

Ego Architect was in the case to begin drawing.

In a contract, there are two types: implied or impress terms.

Implied terms are defined verbally and in writing.

Implied terms refer to terms that are not explicitly stated in the contract but which will nevertheless be part of it.

The contract might include a requirement that the architect’s drawings must be in line with the project.

The law of contract can declare that there are implied terms in a contract that doesn’t contain such a clause.

Ego architect was required to produce drawings that corresponded with the project.

Therefore, it is essential that all terms and conditions of a contract are followed to the letter.

In the event that a contract’s performance isn’t in line with agreed terms, the innocent party can revoke the contract.

This ends the contract.

Agro builders was entitled to withhold any payments if the drawings were not in accordance with the project.

The parties can decide to change certain terms or not to discharge the entire agreement.

If the parties agree to modify the terms, the contract becomes null and void and the parties are bound by the terms of their new contract.

In constructions, it is very common to have cases of modification of contract and waiver of strict dependence on defective drawings.

Most cases the principal changes the contract or refuses permission to use the drawings.

Agro Builders & Ego Architect negotiated a modification to the contract. They were each bound by the terms and could not go back to the previous agreement.

Part A (2) Effects On A Verbal Agreement On A Previously Written Convention It was obvious that the parties had signed a written contract. But, later, when the drawings were not as they expected, they agreed orally and in writing to use the new’ drawings.

In law, the question is whether an oral contract can alter a written agreement.

It is possible to amend written contracts through oral agreements, or by their conduct.

An oral contract is enforceable by law so oral modifications are possible.

Agro Builders and the other parties agreed orally to amend the written agreement to allow for the new drawings.

The written agreement is the valid one. A duty to act in fairness and good faith by both parties is a rule in all construction contracts.

They also agreed to modify the existing contract to make the new terms effective. The old contract no longer applies.

Agro Builders also used Ego Architect’s drawings. This already proved that it was open to the new drawings.

“Oral agreements can be varied only if they are in a collateral form, do not contradict express or implicit conditions of the written agreement, and include terms that the parties could not reasonably expect to have to include in the written contracts.” Oral variations may also alter contracts that contain clauses that protect it from being modified.

The court of appeal’s decision in Globe Motors Inc. Vs TRW Lucas Varity Electric Steering Ltd. illustrates this principle.

After finding that the High Court did not consider the terms of the agreement, the Court of Appeal reversed its decision.

The Court of Appeal ruled that a clause contained in a written agreement did not have any weight and dismissed any amendments made to it.

Agro Builders should be aware that amendments can have the same effects as formal agreements, even if they are informal.

It doesn’t matter if both parties agreed to the modification.

Agro relied upon the drawing when constructing the facility. Therefore, its conduct proved that it considered the varying drawings valid.

A similar decision was reached in RTS Flexible Systems Ltd.

The Supreme Court found that the parties had performed their obligations and that this meant they accepted the terms of their contract, even though they hadn’t signed it.

Clarification: The court stated that their conduct demonstrated that they treated an unsigned contract like it was signed.

Agro Building dealt with the different drawings as though they were perfect.

It was to perform exactly as it promised.

Ego, which has already relied upon Agro’s promises, is also obliged to Agro.

Adrew Cheek explained that this means that any party acting in reliance on an assurance, representation, undertakings or conduct, of another party, in relation to a contractual relationship, would be prevented from benefiting from such misrepresentations.

Part A (3A), Legal Principles Applyable and The Hierarchy Of Documentation Problems are often caused by the subject of the hierarchy.

Due to the sheer volume of these documents that are part of the contract, the problems can be quite serious.

There is a greater chance of discrepancies in the contents of these papers the more extensive they are.

When there is a dispute, it can be a problem. To resolve the issue, one of these documents must govern.

Many of these contracts are held by ad hoc project managers.

They are all arranged in a hierarchical manner. Their layout just denotes which order the documents should be consulted in cases of dispute.

In most cases, the contract document usually begins the hierarchy.

Next, follow the specifications document, followed by drawings and finally, the bills or quantities or schedule rates.

It is common for contracts that include multiple documents to contain clauses or wording that describes how to deal with a conflict between the different documents.

It is common for the contracts to list the hierarchy of papers.

The parties may include a clause saying that inconsistencies or conflicts in documents will be resolved by the special terms and/or amendments in the contract.

Parties can also apply common law principles to the handling of ambiguities beyond the ones set out in the contract.

Common law says that discrepancies can only be solved if the document is interpreted in the reasonable man’s view, taking into account all background information.

Common law also holds that parties can find a solution to their problems by reasonably analyzing any ambiguities.

Parties can resolve the conflict by looking at the whole contract.

Parties can also dismiss any literal meaning that leads to an absurd result. Such methods can be used to end the conflict.

Part A (3B). Legal Effect of Stamping Specifications “Approved” On Any Future Contractual Situation In a construction, there are three parties: the Design professional (owner), the contractor and the designer professional. The designer professional owes the parties more than anyone else.

The designer has both contractual duties as well as legal obligations.

The contractor also owes it legal professionals.

Most contracts give the architect the authority to supervise the design.

This power confers the architect professional control. It also gives rise to liability for all negligence in the interpretation and implementation of the building specifications.

Not only do the drawings of the architect carry the responsibility, but also other consulting that the owner receives outside experts.

For instance, an engineer could be held responsible for the failure to inform the owner about the mistakes made by contractors. The court found that because the architect stamped the documents it implied that the architect had accepted the obligation to review them.

The architect assumes all responsibility after sealing the plans and drawings.

Additionally, although the architect has the overall authority to change the terms and transfer the burden to the owner, they are not empowered to do so.

Without agreeing with the owner, an architect could modify the contractual terms to change the terms.

The court will decide that the architects are not entitled to such powers and award damages.

After they have stamped the specifications, architects are required to use all of their skills, abilities, and reasonable judgment in order to complete the work.

After stamping the specifications, architects have to use all of their skills, abilities, and reasonable judgment on the work.

Typically, the specifications and project plans work together to determine the contract provisions.

The drawings show the work that will be assembled. They include dimensions, location and organization of components and systems.

Specifications contain technical data about construction materials, systems, and equipment. These include information regarding their quality, performance characteristics, and expected outcomes.

Part A (3C), Formulated Procedures To Avoid Amendment Problems During Construction

After stamping the specifications, architects are expected to use all of their skills, abilities, and reasonable judgment in order to complete the work.

Usually, the specifications and project plans work together to determine the contract provisions.

The drawings show the work that will be assembled. They include dimensions, location and organization of components and systems.

Specifications contain technical data about the construction materials, systems and equipment that are shown on the drawings. This includes information regarding quality, performance characteristics and expected results.

Sudden field status can also be avoided.

Most often, these conditions result from complications that were not included in the original design.

One of the most common causes for changes is an unexpected need to change the plan or modify specifications.

Most often, this happens when architects misunderstand or make mistakes reading contracts.

This happens most often when the shop drawing is being prepared.

Simply put, any plans that don’t work on paper will cause problems in field.

There are many ways to avoid this mistake in construction.

One option is for the engineers and architects to visit the site to perform a feasibility review of the plans before any work begins.

The engineers and architects can review the designs together with members of the construction management team, or have plans reviewed by other construction experts to verify that they are practical in the field.

Concern for expert determination refers to a process where disputing parties ask for the assistance of another party to analyze the matter and make a decision.

This is a form of ADR called arbitration.

Expert agreement can be used to solve technical problems in most cases. This is because the expert has specific knowledge about the subject.

An expert may be called upon by parties to a construction dispute to determine the cost of the work, assess its quality, and make other determinations.

A time extension may allow an expert to make a decision on the amount of money owed by the contractor.

Parties can also include a clause that specifies that technical disputes will be referred to an experts in most cases.

Part B (4A), Substantiating Claim For Incomplete Specifications Technical Material for the Claim. Agro builders may want to file a lawsuit against the court over insufficient specifications. It is important to understand that evidence proves the case will be successful.

It is important to note that the party with the strongest documentation will be the one who wins.

Without great documentation, however, it can be hard to establish a true claim.

Agro’s attorney will need to examine the correspondence files to determine how the task was organized chronologically.

You should find a contract document within these files.

A bid document, including all costs, should be found in these correspondence files.

Agro would also need to prepare the daily reports, if any, that hold equipment of writing.

This would allow for the determination of progress and costs.

Once you have provided the daily reports, it is worth also proving any payroll records or delivery receipts.

The next step is requisition. It will often show the amount of work completed at particular times.

Agro could also provide schedules that would show the actual program.

It’s a good idea for attorneys to see any photographs.

Expert Witness Assessment Judges will consider several factors before accepting an expert witness.

The first is whether the witness can be tested for technical accuracy.

The judge will then consider whether or not a technique has high-realism errors or potential rates of errors and whether principles can be applied to control such technical errors.

Expert evidence is also acceptable in claims trials if it supports the judge and jury in solving the problem.

While the court may accept the evidence, it is important that the evidence be supported by a sufficient foundation.

If the court finds the evidence to be speculative and concludes that expert testimony was based on unsatisfactory facts, it will not accept it.

Other instances may result in expert evidence being rejected if an expert fails to reflect on all aspects of the practical facts.

Expert witnessing can pose problems and risks. Expert witnessing is useful but it comes with some risks.

An expert may become attached to the dispute by becoming involved in it.

It can lead to expert credibility being compromised as they are biased.

When the attorney attempts to find the facts for a federal case, both the expert and witness roles can create difficulties.

Part B (4b), Claim under the Building Industry Security Of Payment Act, Victoria.

There are many reasons why people enter into construction contracts.

The ‘Building and Construction Industry Security of Payment Act’ (SOP) helps protect any person’s payment as long as they have worked in a construction sector or were involved in providing associated goods and services.

For a claim to be valid under this law, it must adhere to certain rules.

Every payment claim must be made to the respondent by the date it can be served, the reference date.

The claim must also be served with the latest date it can be served.

A payment claim covers the claimant’s amount that must be paid by the date of reference. The amount is calculated in accordance with the contract document.

If the amount is not specified in the contract, the claimant can value the work performed and the delivered goods and services.

The act provides for different dates.

These can be the periodic advance payment, final payment, or one payment.

The act allows the contract’s reference date and the latest date to be specified in the contract.

If a periodic progres is required, the latest date must be at least three months after the reference.

The payment of a periodic progression payment can be for no less than three months or one day.

No further claims should be made after you apply for a final payment.

Only those contracts which only allow periodic progress claims are exempted from the requirement to make a single payment.

Others contracts allow periodic claims for as long as the contract lasts.

You can also set dates for filing such claims in the contract.

In the absence of such a provision, the claim may be made within 20 business days after the work was completed.

The act allows the contract author to set the dates for filing a claim.

If the contract does not specify a date, it should contain a final certification. The earliest date is the date after the last claim.

Progress payment can contain a single, or one-off payment claim.

This can happen when the contract only specifies a short amount of work or delivery and the payments are to have a very brief duration.

This includes cases in which the claimant should be paid before the work is done.

All of this information is accessible to the public at the Building and Construction Industry Security of Payment Act.

In conclusion, parties to a contract for construction can agree to and follow the laws to avoid any dispute.

Parties to a construction contract may agree to work within the contract’s terms and conditions to avoid potential disputes.

The building industry will evolve if this happens. Everyone will be able to see honest engineers and subcontractors as well as the owner.

Such a doctrine would be a significant part of the entire construction sector.

This paper has discussed what makes a contract enforceable and what an engineer should do to prevent any amendments or changes to the contract.

This paper examines the effects on stamping specifications and provisions of building industry acts.

It also highlighted some key points that construction workers should know.

References Frey M. Essentials Of Contract Law (2nd edn), Cengage Learning 2015); Miller R. Cross F., Jentz G., Business Law (12th edn), South-Western Cengage Learning 2012); White F. Commercial And Economic Law In Ireland (1st edn), Kluwer Law International 2011); Klass G. Contract Law In The USA (1st edn), Kluwer Law International 2010); Fishman S. Contracts: Keyed To Courses Studies In Contract Law & Business 2009); Andrew C.

(2004) 21 International Construction Law Review

accessed 11 May 2017. Szypszak CC, Understanding Law for Public Administration (1st edition, Jones and Bartlett Publishers 2010) Klinger MM and Susong MP, The Construction Project (3rd Edition, Tort Trial and Insurance Practice Sections, American Bar Association 2006) Halpin DB and Senior B Construction Management (4th Edn, Wiley 2012). Ulbrick DR, Tradies and The Trade Practices Act 2009) 25 BCLC.

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