Take Home Exam

QUESTIONS: 1. Performance and Completion, Variation, Defects, Delays, Damages and Extension of Time, case study (Nicholas Gould). An argument that time is at large is often raised during extension of time disputes, but in reality it is rarely if ever a real problem under the English common law . Discuss and compare to a civil system of law of your choice. Time at Large is essentially an English Law concept which is not a legal term, but which describes the situation where, if a delay event occurs that is the Employers fault and the contract does not make provision for the delay, the original completion date falls away and time is put at large (Common Law Time at large Arguments in a civil law context by John Bellhouse and Paul Cowan). Situations when time for completion of the Works can be said is at large arise in the following five situations:

(a) (b)

No time for completion is fixed in the contract; Improper administration or misapplication of the extension of time provision in the contract;

(c) (d) (e)

Waiver of time requirements; The Employers interference in the certification process; when the extension of time provision does not confer power on the Engineer/Architect/S.O. to extend the time for completion of the Works on the occurrence of event or events which fall(s) within the obligation of the Employer.

The concept of time at large originated from the English law prevention principle. The basic tenant of the prevention principle is that no person can take advantage of the nonfulfilment of a condition, the performance of which has been hindered by himself (per Vaughan Williams L.J. in Barque Quilpe Ltd v Brown [1904] 2 K.B.264 at 274).

The prevention principle was explained and enunciated in the English Court of Appeal decision of Peak Construction (Liverpool) Pty Ltd v. McKinney Foundation Ltd, arguably the leading case on this subject. An earlier authority regarding the prevention principle can be found in the case of Amalgamated Building Contractors Ltd v. Waltham Holy Cross UDC where DJ Denning stated that: I would also observe that on principle there is a distinction between cases where the cause of delay is due to some act or default of the building owner, such as not giving possession of the site in due time, or ordering

extras, or something of that kind. When such things happen the contract time may well cease to bind the contractors, because the building owner cannot insist on a condition if it is his own fault that the condition has not been fulfilled.

In Australia, the time at large principle was applied in its most extreme form in Gaymark Investments Pty Limited v Walter Construction Group Limited [1999] NTSC 143; (2005) 21 Construction Law Journal 71. In that case, the Arbitrator made the following findings:

(1) That the contractor was delayed in completing the work, including a delay of 77 days by causes for which the employer was responsible, but the contractor's application for an extension of time was barred because of its failure strictly to comply with the notification requirements for the extension of time clause.

(2) That the 77 days' delay constituted acts of prevention by the employer with the result that there was no date for practical completion and the contractor was then obliged to complete the work within a reasonable time (which the Arbitrator found that it in fact did) with the consequence being that Gaymark was prevented from recovering liquidated damages for delay.

The above case of law was widely criticised in Multiplex Constructions (UK) Ltd v. Honeywell Control Systems Limited Mr. Justice Jackson stated at paragraph 103: '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 financial 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.' The judge said that he had 'considerable doubts' whether the Gaymark case represented the law of England and concluded at paragraph 105, that: 'If the facts are that it was possible to comply with clause 11.1.3 [the extension of time clause] that Honeywell simply failed to do so (whether or not deliberately), then those facts do not set time at large.' On this basis, his Honour concluded that Honeywell's failure to comply with the notice requirement did not set time at large.

The effect of time being at large has an important consequence in what regards the liquidated damages clauses which become inoperative and, therefore, the Employer cannot longer rely on these clauses in order to impose liquidated damages onto the Contractor.

On the other hand, another consequence when the time is at large, is that the original completion dates or certified extended completion dates does not longer binds the Contractor, following for the work to be completed in a reasonable time. In this case another

question arises: what is a reasonable time within the work to be completed? This questions of what is the duration of reasonable time is a matter of facts, not of laws, and therefore an answer has to be given considering all the circumstances existing at the time of performing the obligations but excluding all those circumstances that are under the control of the Contractor namely the party performing these obligations.

In what regards the civil law systems, some general law principles permit for the courts to adjust the amount of damages to be recovered by the creditors (in our case Employers) or to adjust the standard of performance where is just to do so. In this sense we can quote art. 1147 from French Civil Code which states that le debiteur este condamne, sil y a lieu, au payment de domage et interets, soit a raison de lexecution de lobligation, soit a raison du retard dans lexecution, toutes les fois quil ne justifie pas que linexecution provient dune cause etrangere qui ne peut lui etre imputee, encore quil ny ait aucune mauvaise foi de sa part. Basically, the above quoted article states that a debtor shall be ordered to pay damages, if there is occasion, either by reason of the non-performance of the obligation, or by reason by delay in performing, whenever he does not prove that the non-performance comes from an external cause which may not be ascribed to him, although there is no bad faith on his part. Analysing this article we observe that the French legislator states that the debtor is to be exonerate to pay damages in case the non-performance comes from an external cause which may not be ascribed to him. This external cause can mean in terms of construction, for example an obstruction from the Employer on granting access to the site for starting the works or an order for new additional works. Therefore, in my opinion, these external causes are analogue with the act of prevention concept we have in the English common law system. Different provisions of this type we can find in Romanian Civil Law system where, for example, art. 1350 align. 1 from the New Civil Code states that any person must fulfil the obligation he contracted following in align. 2 to rules that when, without justification , does not fulfil this obligation, the party is liable for the damages caused to the other party and is due to repair this prejudice, in the terms and condition of the law Interpreting this article . per a contrario we can deduct that in case the debtor is not fulfilling his obligation, because he has justification for this conduct, then he will not be liable to pay damages. Therefore, the concept without justification is analogue with the act of prevention concept we have analysed in the common English system of law. A different example of this type of provisions can be seen in the same Romanian Civil Code, namely art. 1541 align. 1 which states that: the court shall not reduce the penalty ( here penalty has the meaning of liquidated damages in English common law) excepting the case when: a) the main obligation was partially executed and this performance profits the creditor; b) the penalty is way to excessive considering the prejudice which could have been presumed when the contract was concluded. From what we have related above, we can see that the legal concept of when the time can be at large is quite well set in English common law as well in the jurisdiction. On the other side, despite the fact that in civil law jurisdiction the formulation and legal arguments of the common law concept time at large can differ, we are, as we have seen, in the presence of principles that can be used in order relief the contractor whenever is just to do so. Basically, these civil law system principles does not allow the Employer to enforce the contractors obligations with the fixed completion date or to recover liquidated damages when these are a consequence of the Employers preventions and/or acts or its representatives. In conclusion these civil law principles are very consistent with the basics of time at large and

prevention principle concepts.

QUESTIONS

2. Design, Testing, Taking over, Variations, Case studies, Focus on Hydro Plants and FIDIC ( Mr Werner Marckhgott) Show advantages and disadvantages for the Employer and the Contractor in case the works of a 1999 FIDIC are split into sections. According to sub-clause 1.1.5.6 from FIDIC 1999 (Red Book) a section is defined as a part of the works specified in the Contract data as a section (if any). Splitting the works of a large project into section may be associated with advantages for all the main parties involved in the construction process, in our case the Employer and the Contractor. In what regards the Employer: Increases flexibility on the part of the project owner to adapt the project to changing circumstances; He is not oblige to deliver the entire site but only section of it, and therefore the Contractor cannot defend himself of asking EOT for not being delivered with the entire site. As a practical use, for example in motorway construction contracts developed in Romania, a split section contract is very advantageous for the Employer (Government) since at the moment contracts were signed the expropriation procedures for all the Land were not ready. Enables him to use a complete part of the work earlier than if the project/s was/were not divided into sections; In terms of planning this have a great effect on a programme. Each sectional completion produces a separate critical path method for each section and thereby reducing float that might exist if it was just a single completion date; Force the Contractors to focus on a progressive completion rather to endeavour to hand over the entire project in one single day. On the other side, the Contractor: Has his liability limited in different way. In this respect each section of works will have its own specificity concerning: Time for Completion (Sub-Clause 8.2). Delay Damages (Sub-Clause 8.7). Delay damages will run only in respect of the section delayed; Tests on Completion (Clause 9) Taking Over (Sub-Clause 10.1). The risk and possession of the section will be transfer gradually as the sections are finished and not only when the work is finished as a whole. Defects Notification Period (Clause 11). For each section will start running an independent defect notification period and this will be prolonged (in case defects are not remedied in the initial period) only in what regards the section to which performance was not achieved. Payment Conditions (Clause 14).

Splitting a contract in section it may have also disadvantages for both the Contractor and

the Employer. In what concerns the Contractor: Under sub-clause 11.4, 2nd paragraph, case C, the Employer may terminate the contract as a hole (even is split in sections) if the Contractor has failed to remedy the defects notified and the defects deprive the Employer from the benefit of the whole of works. So, for example, even the other sections were good executed under the above clause the Employer has the right to terminate the entire contract, if the defects of one sections is not properly remedy and he is deprived form the benefit of the whole work.; The Contractor will be due to pay delay damages in case of delay in completion for each section, as the case it may be, even for example in case the final deadline for the whole work is respected; Under sub clause 11. 9 paragraph 2, the Performance Certificate will not be issued until the expiring of 28 days since all defects notification periods elapsed (for each sections) or soon thereafter the Contractor delivered all documents and completed and tested all works, including remedying any defects. This sub clause means that in the event works are split, for example, in 5 section and just one of them needs remedy, the Contractor is not going to get the Performance Certificate, even, in reality, the Employer use the entire project and possible obtains benefits. Until the Performance Certificate is not issued, under sub clause 11.9 paragraph 3 the works are not deemed to be considered accepted. Under sub clause 4.2., 5th paragraph, the performance security shall not be released until the Performance Certificate was issued, and as we have seen earlier this is not to be released only in the terms and conditions of sub clause 11.9. This mean that even This sub clause means that in the event works are split, for example, in 5 section and just one of them needs remedy, the Contractor is not going to get the Performance Certificate, and consequently the Performance security, even, in reality, the Employer use the entire project and possible obtains benefits; When trying to implement either sub - clause 10.1. or 10.2 will result in unfairness in release the retention money under sub clause 14.9. So, despite the fact the taking over certificate for a section is issued, the Employer will release 2 fifths after this moment, there other 2 fifths after the defect notification period expires and the last fifth, as we can understand from paragraph 1 and 2 of this sub - clause, after the defect notification period expires for the entire work. But, considering the specific of project when divided in sections, the period between one section and other can be even years, and is not fair to keep the retention until the last defect notification period of the work expires. The Contractor is due to meet several completion deadlines, and therefore to apply for different taking over certificates, and in case the sections are interdependent a delay in one section is going to delay the dependant section and therefore this will lead in delay damages. For better understanding let us consider the following example: the works are split in 4 sections and section 1 depends by section 4. If the works to section 1 are delayed because of the Contractors fault, automatically the works are to be delayed in section 4. Going further with our example, let us consider we are speaking about a school, and any delays in section 1 will lead in impossibility of taking possession of section 4 - pupils are there ( section 4) - and impossible to move them in section 1 since is not ready yet; If a section is to be delayed by the Contractor he has only the remainder part of time to make good the delay. If it was just a single completion date for the hole work, the Contractor has a greater chance to make good the delay and, thereby, no delay arising at the end.

In what concerns the Employer: In case of sectional works the Contractor is due to meet several completion deadlines, apply for different taking over certificates and, in case the sections are interdependent, a delay in one section caused by the Employer is going to delay the dependant section with consequences, maybe, over the entire work. For better understanding let us

consider the following example: the works are split in 3 sections and section 1 depends by section 3. If the works to section 1 are delayed because of the Employers fault, automatically the works are to be delayed in section 3. Going further with our example, let us consider we are speaking about a school, and any delays in section 1 will lead in impossibility of taking possession of section 3 - pupils are there ( section 3) - and impossible to move them in section 1 since is not ready yet. Consequently the works in section will not be able to start in section deadline delayed; From the moment of taking over of section the Employer will bear the risks of the section (sub clause 10.1);

QUESTIONS:

3. Performance and Completion, Variation, Defects, Delays, Damages and extension of time, Case studies: Focus on delay analysis (Mr Richard Morris)

a. What, according to the Society of Construction Law are the minimum information , requirements for the four main types of delay analysis? The minimum information requirements according to the Society of Construction Law are: The relevant conditions of the contract: The nature of causative events; The value of the disputes; The time available; The records available; The programme information available; The programmers skills level and familiarity with the project.

b. You are asked to advice on the delay analysis methodology to be adopted on a project where there is a dispute over the entitlement to an extension of time. The Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project.

What method of delay analysis would you suggest and why? Generally the program which was current prior to the delay event occurring is the correct one to commence the analysis with. Since, in our case, the Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis

throughout the course of the project which, in my opinion, the method of analysis to be used is the Time impact analysis (TIA). In the same manner, under art. 3.2.11 from the Protocol of Society of Construction Law from 2002 is recommendable to advice the method of Time impact analysis (TIA). This type of method, in contrast with the other 3(three) methods of delays analysis and theirs disadvantages, performs a series of analysis throughout the entire period of the projects. Time impact analysis is able to detect the causes of delays and theirs effect in the same time, simultaneously. By contrary the other type of delays analysis methods observe a schedule at single point in time (see Zack Jr. J. But for schedules- analysis and defence Cost Eng. AACE, 2001 43(8): 13 7; Sumpf Gr. Schedule delay analysis Cost Eng. AACE, 2000; 42(7):32 43). Basically the impact of each delay event is evaluated individually. Time impact analysis method using a CPM algorithm follows on the project, on a daily basis (day by day) from the beginning of the project until completion date. Additionally in this analysis, using that CPM algorithm, are included concurrent delays, recovery time and acceleration and consumption of float. This method, contrary to IAP and CAB method, incorporates both parties delay analysis. In this respect excusable compensable, excusable non compensable and non excusable delays are separately identified in this analysis. An indirect advantage of this method is mentioned to be that it provides for the contractual parties a discipline to keep project schedules up-dated and properly adjusted (see Wickwire J., Driscoll T., Hurlbut Construction scheduling preparation, liability and claims. New York NY. Wiley Law Publications 1991). Therefore, as a conclusion, we can say that the strengths of using this method are: Is easy to understand and has the more reliable result; Can be carried out contemporaneously since the Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project ( please to be seen art. 3.2.11 and section 2 of Protocol of Society of Construction law) Relies on contemporaneous intention; Considers dynamic critical path; Can identify approximate concurrency; Mitigation and concurrency can be addressed; Have support in case law Costain v Charles Haswell and Partners.

What would be the disadvantages of your chosen method? Limitations to this method exist, although, as we have stated earlier, this is the most credible delay analysis. First of all, as a general principle, this type of method requires a large amount of information, therefore as planed schedule in CPM format is mandatory as well as periodical up-dates to the schedule. Strictly in our case would not be disadvantage since produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project. Second of all this analysis method involves a large amount of resources and time. Therefore when time and resources are limited this type of method is not quit appropriate. Third of all the result of this analysis can be influenced by a variety of factors since is a complicated method which accumulates results from a variety of contemporaneous data.

In conclusion I can say that disadvantages of the method suggested above are: Labour intense; Technically complex; Requires frequently prepared progressed schedule. But in our case this method is chosen since the Contractor issued a fully networked contract project. Cannot identify actual concurrent delay; Produced theoretical results based on hypothetical questions.

Would your decision be any different if the parties agreed to try mediation or board levels meetings before starting formal disputes resolution proceedings?

Without reiterating the advantages of TIA method, I would like just to mention that TIA use fragments for analysing delay events. The duration of each delay and theirs relation with project activities are then reviewed in detail with contemporaneous information following for the delays to be inserted in the project. Therefore, in my opinion, this analysis method provide for both parties the possibility to scrutinize the delay and reduce future disputes. In conclusion my advice will be the same. I will still recommend TIA method.

QUESTIONS: 4. Performance and Completion, Variation, Defects, Delays, Damages and extension of time, Case studies: Focus on performance/legal (Mr Volker Motzkus)

a. Describe the concept of performance according to the FIDIC contract. How does completion interact with performance? FIDIC form of contract does not contain a definition of what really means performance. In this case our attention is directed towards the article 11.9 which states: in alignment 1 that: Performance of the Contractors obligation shall not be considered to have been done until the Engineer has issued the performance certificate to the Contractor stating the date on which the Contractor completed his obligation under the contract. an alignment 2 rules that The Engineer shall issue the Performance certificate within 28 days after the lasts of the expiry dates of the Defects Notification Period, or as soon thereafter as the Contractor has supplied all Contractors documents and completed and tested all the works, including remedying any defects. Consequently from this provision results that in FIDIC concept, performance is only achieved after: The defect notification period expired; and All Contractors documents have been supplied and completed and tested all the works, including remedying any defects.

Different from performance we can say that completion is generally defined under subclause 10.1 of FIDIC (Red Book, Yellow Book and Silver Book). But, in any case, interpreting FIDIC provisions results that completion precedes performance. Basically, we DO NOT have performance if prior we do not have completion fulfilled under the terms and conditions of FIDIC. But achieving completion does not mean automatically that performance is achieved. After completion the Contractor has to comply with other obligation for the performance in the FIDIC concept to be achieved. Therefore, after completion, and in order to achieve performance, the Contractor has other essential obligation to comply with, as: Site clearance (YB sub-clause 4.23, 11.11); Remedying of defects (YB sub-clause 11.1); Providing the Statement at Completion (YB sub-clause 14.10); Providing the Draft Final Statement; (YB sub-clause 14.11); Providing further information if required (YB sub-clause 14.11); Discharge of the Employer (YB sub-clause 14.12). Other unfulfilled obligations (YB sub-clause 11.10) In conclusion, as we can see from FIDIC clauses, performance is more than completion .

b. How is determined if performance has been achieved? What problems can arise in the process?

As we have showed earlier FIDIC does not provide us a guideline for performance as it does for completion in sub-clause 10.1. Therefore, when, how or if the performance has been achieved will depend on: The applicable law; and The content of the contract. The lack of guidance for what means performance, contrary to completion, results that in the end the Engineer will have the task to determinate it within the limits of the contract and the applicable law, and will depend on what the Engineer deems necessary to satisfy the contract. But, again, this is a general formulation, and depends very much of his training, professional experience and how this one understands the contract. Therefore is important, in practice to ensure that all the parties involved in the construction process, the Contractor, the Employer and the Engineer have the same understanding in what exactly the works will comprise. Since no guidance is provided in the FIDIC for what performance is and when is achieved we can believe that this sooner or later will be subject of dispute. We have mentioned earlier that in FIDIC terms performance is more than completion since, after completion has been reached, the Contractor has to comply with other obligations for the performance to be achieved. So, in order for the performance to be achieved, first, completion has to be reached. But, in this respect, FIDIC provide us with some guideline regarding what the Contractor needs to provide in order to achieve completion and consequently, after the other obligation are met,performance. Under sub clause 10.1 from FIDIC (red or yellow book) the Engineer must either: Accept the works; or Reject the works, case when the Engineer give reasons and specify the Work required to be done. In case the Engineer fails to actively reject the works, than the works shall be deemed taken-

In case the Engineer fails to actively reject the works, than the works shall be deemed takenover if they are substantially in accordance with the Contract. At this point a dispute can arise on 2 (two) matters: The Engineer reject the works and specify what works the Contractor considers is not obliged to perform; or The Engineer fails to react and the question is here if the works are substantially in accordance with the Contract?

Between these two cases are very important differences namely, in case of the first matter we are in the presence of a legal question: What is the Contractor obliged to perform and provide? When in the second case is more of technical problem which respond to the question: Is what the contractor already provided substantially in accordance with the Contract? In the first case the eventual dispute will be subject to the scope of additional or remedial works, and there will be questions if the Engineer is entitled under the contract to demand these works? As we have stated earlier this is a problem of interpreting the terms of the contract and the applicable law and to see if, finally, the Engineers way of interpreting the contract and the law matches with the point of view of a DAB member or arbitrator by case. When preparing the team for such a dispute is good to consider a lawyer with some Engineer support behind. In the second case since the Engineer has not made any kind of remarks rest for the Contractor to prove the works are substantially in accordance with the Contract. Here, first of all a determination of the works scope is mandatory which, in my opinion, is a problem of a legal nature. Sub-clause 10.1 from FIDIC changes the target from no defects that will substantially affect the use of the works, (see here sub-clause 10.1 a) to the works must be substantially in accordance with the contract (see here sub clause 10.1 last paragraph). Since no works were demanded by the Engineer the entire works must be investigated. So, is recommended a neutral investigation and an assessment of the result of the said investigation, which usually takes more time. In conclusion if in the first case, when preparing a team for dispute was good to consider a lawyer with some technical support and this second case we need a good Engineer with a great legal support.

c. Base your above answers on a legal system of your choice. Briefly discuss changes that might result from applicable law Bullets point suffices. .

FIDIC contracts were drafted considering English common law background and, therefore, they are complying one with each other quit well. While in English common law the construction contract is just another contract in French law the construction contract is, according to art. 1779 from Civil Code, specie of what is called: luoage douvrage et dindustry. Ruled by articles 1787-1799, le contract dentreprise, the construction contract as its called by the French legislator, can be according to article 1787 from Civil Code for providing materials and workmanship, or either only for workmanship. The differences mentioned above have consequences in what regards the Contractors responsibility. In case the Contractor provides materials, according to art. 1788, and the works perish before being handed over, he is liable towards the Employer. It was ruled in French jurisprudence that the parish of works before being handed over due to a fire, is, for

the Contractor in the application of art. 1788, a case when he cannot demand for the working costs because he was not able to deliver (Civ. 3e, 27 janv. 1976: Bull. Civ. III, n o 34.). If the Contractor provides only the workmanship and the work perish, he is held liable only for his fault, states article 1789 from French Civil Code. Accordingly, French jurisprudence held that it results from article 1789 that the Contractor (the French term uses was locateur douvrage), debtor of the things he was entrusted with, is not be released until is not established that they were not perished due to his fault (Civ. 1re, 9 fevr. 1966: Bull. Civ. I, no 103; 24 mars 1987: ibid. I, no 106). Following this situation we find that it has been stated lately that construction contracts under the French Civil Code are split in two parts, namely to provide workman shaft and second to provide proper materials. Despite all this, and for avoiding any doubts, the Contractor is due to deliver the works as agreed under the contract so that work to be fit for the intended purpose, functional and complete. For this reason the French courts decided that if during performing the works a fire destroys an important part of the work, which was consider a fortuity case, the Employer can get the contracts resolution and asking for his money back (Cass. Civ. 3e, 27 janvier 1976, Bull.civ. III, n 0 34). Comparing with FIDIC contract we can see that this construction contracts are made considering both operation: work performance and material delivery to be incorporated in the work. In some cases, as we will see bellow Contractors performance include also design responsibility. So, comparing with the FIDIC books, where clear if the Contractor is responsible for design (see Yellow and Silver Book) or is not (see Red Book) under the French Civil Book we cannot find such provisions. Therefore, will be necessary to determine very clear for what the Contractor is responsible or not. Nevertheless this minus can be covered by contractual provisions in roder to avoid useful future disputes. Different approach we can see in what regards the concept of completion. Under the French Civil Code can be reasonable said that completion is reach when the work is fully completed. Our opinion is grounded by interpreting article 1792 6 from French Civil Code but also by considering the related jurisprudence. So, based under the above quoted article the works is deemed to be fully completed when all the remedial works mentioned in the taking over minute were performed and after completed mutual agreed or, in case of disagreement, approved by the court (see paragraph 5 of article 1792 6 from French Civil Code). Another interesting aspect in relation with this article is that completion of works (French term being achievement de louvrage) is not seen as a condition for the works to be taken over. In this way is also the French jurisprudence which rules that article 1792 6 do not states that the construction of the imoble must be completed for the taking over to take place (Civ. 3e, 12 juill. 1989: Bull. Civ. III, no 161; Defrenois 1990. 376, obs. Souleau; Gaz. Pal. 1989.2. Doctr. 737, etude Guevel.). So, reception of woks can be done even they are not fully completed following for any remedies and defects to be mentioned in the taking over minute and performed within an agreed period of time or, contrary, within a period settled by the court. Following the above said and compering them with the FIDIC concepts of completion I reach the conclusion that: The concept of reception douvrage (taking over of works) we find in the Franch Civil Code is more similar to the FIDIC concept of completion.

We have seen similar that similar to the FIDC concept of completion weve found in French Civil Code the concept of reception douvrage. But, what about the FIDIC concept of performance? There is any similar concepts in the French Civil Code? In order to give an answer to this question we are coming back, again, to article 1792 6, paragraph 2 from the French Civil Code that rules: the guaranty of perfect execution, for which the Contractor liable within a period of 1 year since taking over of works, consist in all the remedies pointed by the Employer, by way of reserves mentioned in the takingover minute or by way of written notice for those occurring after taking over. Of course this guaranty of perfect execution can be aggravated and increased to 2 or 3 years, or even more. In the same time this type of guarantee continues to exist with the general liability (biannual, ten years liability etc.) (Civ. 3e, 17 Nov. 1993; Civ. 3 e; 27 janv. 2010). The execution of the works subject to the guarantee of perfect execution is ascertained by mutual agreement, or contrary, by the court according to article 1792 6, paragraph 5, from the French Civil Code. Basically, in my opinion, interpreting this article, results that: After the Contractor performs within 1 years guarantee period (or more, if otherwise agreed under the contract) the remedies pointed by the Employer, by way of reserves mentioned in the taking-over minute or by way of written notice for those occurring after taking over; and After the performance of all remedies subject to the guarantee of perfect execution are mutually ascertained or, contrary, by the court; the works can be consider as perfect executed ( in French parfait achevee). Following the above said and compering them with the FIDIC concepts of performance I reach the conclusion that: The concept of parfait achevement (perfect performance) we find in the French Civil Code is more similar and close to the FIDIC concept of performance. This because in both cases the performance and parfait achievement are attained after: The works are executed, following for the remedial works and/or by case the defects occurred within the defects liability period to be executed accordingly; The defect notification period elapsed and all the remedies/defects were executed accordingly.

In conclusion, we can see that each national law has its own concepts, which can be translated, but, even though in the majority of times a translation is possible, the real meaning of that concept is totally different. Because of that is very important when we choose a type of contract to see to what extent this complies with the concepts of the national law, and not only to translate it word by word in the language chosen to be used in the contract. Take Home Exam on Performance and Completion, Variation, Defects, Delays,

Damages and Extension of Time concerning the lectures from June 28 th to June 30th 2012

Author: Mag. MARIUS ANDREI ARIZAN

QUESTIONS: 1. Performance and Completion, Variation, Defects, Delays, Damages and Extension of Time, case study (Nicholas Gould). An argument that time is at large is often raised during extension of time disputes, but in reality it is rarely if ever a real problem under the English common law . Discuss and compare to a civil system of law of your choice. Time at Large is essentially an English Law concept which is not a legal term, but which describes the situation where, if a delay event occurs that is the Employers fault and the contract does not make provision for the delay, the original completion date falls away and time is put at large (Common Law Time at large Arguments in a civil law context by John Bellhouse and Paul Cowan). Situations when time for completion of the Works can be said is at large arise in the following five situations:

(a) (b)

No time for completion is fixed in the contract; Improper administration or misapplication of the extension of time provision in the contract;

(c) (d) (e)

Waiver of time requirements; The Employers interference in the certification process; when the extension of time provision does not confer power on the Engineer/Architect/S.O. to extend the time for completion of the Works on the occurrence of event or events which fall(s) within the obligation of the Employer.

The concept of time at large originated from the English law prevention principle. The basic tenant of the prevention principle is that no person can take advantage of the nonfulfilment of a condition, the performance of which has been hindered by himself (per Vaughan Williams L.J. in Barque Quilpe Ltd v Brown [1904] 2 K.B.264 at 274).

The prevention principle was explained and enunciated in the English Court of Appeal decision of Peak Construction (Liverpool) Pty Ltd v. McKinney Foundation Ltd, arguably the leading case on this subject. An earlier authority regarding the prevention principle can be found in the case of Amalgamated Building Contractors Ltd v. Waltham Holy Cross UDC where DJ Denning stated that: I would also observe that on principle there is a distinction between cases where the cause of delay is due to some act or default of the building owner, such as not giving possession of the site in due time, or ordering extras, or something of that kind. When such things happen the contract time may well cease to bind the contractors, because the building owner cannot insist on a condition if it is his own fault that the condition has not been fulfilled.

In Australia, the time at large principle was applied in its most extreme form in Gaymark Investments Pty Limited v Walter Construction Group Limited [1999] NTSC 143; (2005) 21 Construction Law Journal 71. In that case, the Arbitrator made the following findings:

(1) That the contractor was delayed in completing the work, including a delay of 77 days by causes for which the employer was responsible, but the contractor's application for an extension of time was barred because of its failure strictly to comply with the notification requirements for the extension of time clause.

(2) That the 77 days' delay constituted acts of prevention by the employer with the result that there was no date for practical completion and the contractor was then obliged to complete the work within a reasonable time (which the Arbitrator found that it in fact did) with the consequence being that Gaymark was prevented from recovering liquidated damages for delay.

The above case of law was widely criticised in Multiplex Constructions (UK) Ltd v. Honeywell Control Systems Limited Mr. Justice Jackson stated at paragraph 103: '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 financial 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.' The judge said that he had 'considerable doubts' whether the Gaymark case represented the law of England and concluded at paragraph 105, that: 'If the facts are that it was possible to comply with clause 11.1.3 [the extension of time clause] that Honeywell simply failed to do so (whether or not deliberately), then those facts do not set time at large.' On this basis, his Honour concluded that Honeywell's failure to comply with the notice requirement did not set time at large.

The effect of time being at large has an important consequence in what regards the liquidated damages clauses which become inoperative and, therefore, the Employer cannot

longer rely on these clauses in order to impose liquidated damages onto the Contractor.

On the other hand, another consequence when the time is at large, is that the original completion dates or certified extended completion dates does not longer binds the Contractor, following for the work to be completed in a reasonable time. In this case another question arises: what is a reasonable time within the work to be completed? This questions of what is the duration of reasonable time is a matter of facts, not of laws, and therefore an answer has to be given considering all the circumstances existing at the time of performing the obligations but excluding all those circumstances that are under the control of the Contractor namely the party performing these obligations.

In what regards the civil law systems, some general law principles permit for the courts to adjust the amount of damages to be recovered by the creditors (in our case Employers) or to adjust the standard of performance where is just to do so. In this sense we can quote art. 1147 from French Civil Code which states that le debiteur este condamne, sil y a lieu, au payment de domage et interets, soit a raison de lexecution de lobligation, soit a raison du retard dans lexecution, toutes les fois quil ne justifie pas que linexecution provient dune cause etrangere qui ne peut lui etre imputee, encore quil ny ait aucune mauvaise foi de sa part. Basically, the above quoted article states that a debtor shall be ordered to pay damages, if there is occasion, either by reason of the non-performance of the obligation, or by reason by delay in performing, whenever he does not prove that the non-performance comes from an external cause which may not be ascribed to him, although there is no bad faith on his part. Analysing this article we observe that the French legislator states that the debtor is to be exonerate to pay damages in case the non-performance comes from an external cause which may not be ascribed to him. This external cause can mean in terms of construction, for example an obstruction from the Employer on granting access to the site for starting the works or an order for new additional works. Therefore, in my opinion, these external causes are analogue with the act of prevention concept we have in the English common law system. Different provisions of this type we can find in Romanian Civil Law system where, for example, art. 1350 align. 1 from the New Civil Code states that any person must fulfil the obligation he contracted following in align. 2 to rules that when, without justification , does not fulfil this obligation, the party is liable for the damages caused to the other party and is due to repair this prejudice, in the terms and condition of the law Interpreting this article . per a contrario we can deduct that in case the debtor is not fulfilling his obligation, because he has justification for this conduct, then he will not be liable to pay damages. Therefore, the concept without justification is analogue with the act of prevention concept we have analysed in the common English system of law. A different example of this type of provisions can be seen in the same Romanian Civil Code, namely art. 1541 align. 1 which states that: the court shall not reduce the penalty ( here penalty has the meaning of liquidated damages in English common law) excepting the case when: a) the main obligation was partially executed and this performance profits the creditor; b) the penalty is way to excessive considering the prejudice which could have been presumed when the contract was concluded. From what we have related above, we can see that the legal concept of when the time can be at large is quite well set in English common law as well in the jurisdiction. On the other

side, despite the fact that in civil law jurisdiction the formulation and legal arguments of the common law concept time at large can differ, we are, as we have seen, in the presence of principles that can be used in order relief the contractor whenever is just to do so. Basically, these civil law system principles does not allow the Employer to enforce the contractors obligations with the fixed completion date or to recover liquidated damages when these are a consequence of the Employers preventions and/or acts or its representatives. In conclusion these civil law principles are very consistent with the basics of time at large and prevention principle concepts.

QUESTIONS

2. Design, Testing, Taking over, Variations, Case studies, Focus on Hydro Plants and FIDIC ( Mr Werner Marckhgott) Show advantages and disadvantages for the Employer and the Contractor in case the works of a 1999 FIDIC are split into sections. According to sub-clause 1.1.5.6 from FIDIC 1999 (Red Book) a section is defined as a part of the works specified in the Contract data as a section (if any). Splitting the works of a large project into section may be associated with advantages for all the main parties involved in the construction process, in our case the Employer and the Contractor. In what regards the Employer: Increases flexibility on the part of the project owner to adapt the project to changing circumstances; He is not oblige to deliver the entire site but only section of it, and therefore the Contractor cannot defend himself of asking EOT for not being delivered with the entire site. As a practical use, for example in motorway construction contracts developed in Romania, a split section contract is very advantageous for the Employer (Government) since at the moment contracts were signed the expropriation procedures for all the Land were not ready. Enables him to use a complete part of the work earlier than if the project/s was/were not divided into sections; In terms of planning this have a great effect on a programme. Each sectional completion produces a separate critical path method for each section and thereby reducing float that might exist if it was just a single completion date; Force the Contractors to focus on a progressive completion rather to endeavour to hand over the entire project in one single day. On the other side, the Contractor: Has his liability limited in different way. In this respect each section of works will have its own specificity concerning: Time for Completion (Sub-Clause 8.2). Delay Damages (Sub-Clause 8.7). Delay damages will run only in respect of the section delayed; Tests on Completion (Clause 9) Taking Over (Sub-Clause 10.1). The risk and possession of the section will be transfer gradually as the sections are finished and not only when the work is finished as a whole. Defects Notification Period (Clause 11). For each section will start running an independent defect notification period and this will be prolonged (in case defects are not remedied in the initial period) only in what regards the section to which performance was not achieved.

Payment Conditions (Clause 14).

Splitting a contract in section it may have also disadvantages for both the Contractor and the Employer. In what concerns the Contractor: Under sub-clause 11.4, 2nd paragraph, case C, the Employer may terminate the contract as a hole (even is split in sections) if the Contractor has failed to remedy the defects notified and the defects deprive the Employer from the benefit of the whole of works. So, for example, even the other sections were good executed under the above clause the Employer has the right to terminate the entire contract, if the defects of one sections is not properly remedy and he is deprived form the benefit of the whole work.; The Contractor will be due to pay delay damages in case of delay in completion for each section, as the case it may be, even for example in case the final deadline for the whole work is respected; Under sub clause 11. 9 paragraph 2, the Performance Certificate will not be issued until the expiring of 28 days since all defects notification periods elapsed (for each sections) or soon thereafter the Contractor delivered all documents and completed and tested all works, including remedying any defects. This sub clause means that in the event works are split, for example, in 5 section and just one of them needs remedy, the Contractor is not going to get the Performance Certificate, even, in reality, the Employer use the entire project and possible obtains benefits. Until the Performance Certificate is not issued, under sub clause 11.9 paragraph 3 the works are not deemed to be considered accepted. Under sub clause 4.2., 5th paragraph, the performance security shall not be released until the Performance Certificate was issued, and as we have seen earlier this is not to be released only in the terms and conditions of sub clause 11.9. This mean that even This sub clause means that in the event works are split, for example, in 5 section and just one of them needs remedy, the Contractor is not going to get the Performance Certificate, and consequently the Performance security, even, in reality, the Employer use the entire project and possible obtains benefits; When trying to implement either sub - clause 10.1. or 10.2 will result in unfairness in release the retention money under sub clause 14.9. So, despite the fact the taking over certificate for a section is issued, the Employer will release 2 fifths after this moment, there other 2 fifths after the defect notification period expires and the last fifth, as we can understand from paragraph 1 and 2 of this sub - clause, after the defect notification period expires for the entire work. But, considering the specific of project when divided in sections, the period between one section and other can be even years, and is not fair to keep the retention until the last defect notification period of the work expires. The Contractor is due to meet several completion deadlines, and therefore to apply for different taking over certificates, and in case the sections are interdependent a delay in one section is going to delay the dependant section and therefore this will lead in delay damages. For better understanding let us consider the following example: the works are split in 4 sections and section 1 depends by section 4. If the works to section 1 are delayed because of the Contractors fault, automatically the works are to be delayed in section 4. Going further with our example, let us consider we are speaking about a school, and any delays in section 1 will lead in impossibility of taking possession of section 4 - pupils are there ( section 4) - and impossible to move them in section 1 since is not ready yet; If a section is to be delayed by the Contractor he has only the remainder part of time to make good the delay. If it was just a single completion date for the hole work, the Contractor has a greater chance to make good the delay and, thereby, no delay arising at the end.

In what concerns the Employer: In case of sectional works the Contractor is due to meet several completion deadlines, apply for different taking over certificates and, in case the sections are interdependent, a delay in one section caused by the Employer is going to delay the dependant section with consequences, maybe, over the entire work. For better understanding let us consider the following example: the works are split in 3 sections and section 1 depends by section 3. If the works to section 1 are delayed because of the Employers fault, automatically the works are to be delayed in section 3. Going further with our example, let us consider we are speaking about a school, and any delays in section 1 will lead in impossibility of taking possession of section 3 - pupils are there ( section 3) - and impossible to move them in section 1 since is not ready yet. Consequently the works in section will not be able to start in section deadline delayed; From the moment of taking over of section the Employer will bear the risks of the section (sub clause 10.1);

QUESTIONS:

3. Performance and Completion, Variation, Defects, Delays, Damages and extension of time, Case studies: Focus on delay analysis (Mr Richard Morris)

a. What, according to the Society of Construction Law are the minimum information , requirements for the four main types of delay analysis? The minimum information requirements according to the Society of Construction Law are: The relevant conditions of the contract: The nature of causative events; The value of the disputes; The time available; The records available; The programme information available; The programmers skills level and familiarity with the project.

b. You are asked to advice on the delay analysis methodology to be adopted on a project where there is a dispute over the entitlement to an extension of time. The Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project.

What method of delay analysis would you suggest and why? Generally the program which was current prior to the delay event occurring is the correct one to commence the analysis with. Since, in our case, the Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project which, in my opinion, the method of analysis to be used is the Time impact analysis (TIA). In the same manner, under art. 3.2.11 from the Protocol of Society of Construction Law from 2002 is recommendable to advice the method of Time impact analysis (TIA). This type of method, in contrast with the other 3(three) methods of delays analysis and theirs disadvantages, performs a series of analysis throughout the entire period of the projects. Time impact analysis is able to detect the causes of delays and theirs effect in the same time, simultaneously. By contrary the other type of delays analysis methods observe a schedule at single point in time (see Zack Jr. J. But for schedules- analysis and defence Cost Eng. AACE, 2001 43(8): 13 7; Sumpf Gr. Schedule delay analysis Cost Eng. AACE, 2000; 42(7):32 43). Basically the impact of each delay event is evaluated individually. Time impact analysis method using a CPM algorithm follows on the project, on a daily basis (day by day) from the beginning of the project until completion date. Additionally in this analysis, using that CPM algorithm, are included concurrent delays, recovery time and acceleration and consumption of float. This method, contrary to IAP and CAB method, incorporates both parties delay analysis. In this respect excusable compensable, excusable non compensable and non excusable delays are separately identified in this analysis. An indirect advantage of this method is mentioned to be that it provides for the contractual parties a discipline to keep project schedules up-dated and properly adjusted (see Wickwire J., Driscoll T., Hurlbut Construction scheduling preparation, liability and claims. New York NY. Wiley Law Publications 1991). Therefore, as a conclusion, we can say that the strengths of using this method are: Is easy to understand and has the more reliable result; Can be carried out contemporaneously since the Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project ( please to be seen art. 3.2.11 and section 2 of Protocol of Society of Construction law) Relies on contemporaneous intention; Considers dynamic critical path; Can identify approximate concurrency; Mitigation and concurrency can be addressed; Have support in case law Costain v Charles Haswell and Partners.

What would be the disadvantages of your chosen method? Limitations to this method exist, although, as we have stated earlier, this is the most credible delay analysis. First of all, as a general principle, this type of method requires a large amount of information, therefore as planed schedule in CPM format is mandatory as well as periodical up-dates to the schedule. Strictly in our case would not be disadvantage since produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project. Second of all this analysis method involves a large amount of resources and time.

Therefore when time and resources are limited this type of method is not quit appropriate. Third of all the result of this analysis can be influenced by a variety of factors since is a complicated method which accumulates results from a variety of contemporaneous data. In conclusion I can say that disadvantages of the method suggested above are: Labour intense; Technically complex; Requires frequently prepared progressed schedule. But in our case this method is chosen since the Contractor issued a fully networked contract project. Cannot identify actual concurrent delay; Produced theoretical results based on hypothetical questions.

Would your decision be any different if the parties agreed to try mediation or board levels meetings before starting formal disputes resolution proceedings?

Without reiterating the advantages of TIA method, I would like just to mention that TIA use fragments for analysing delay events. The duration of each delay and theirs relation with project activities are then reviewed in detail with contemporaneous information following for the delays to be inserted in the project. Therefore, in my opinion, this analysis method provide for both parties the possibility to scrutinize the delay and reduce future disputes. In conclusion my advice will be the same. I will still recommend TIA method.

QUESTIONS: 4. Performance and Completion, Variation, Defects, Delays, Damages and extension of time, Case studies: Focus on performance/legal (Mr Volker Motzkus)

a. Describe the concept of performance according to the FIDIC contract. How does completion interact with performance? FIDIC form of contract does not contain a definition of what really means performance. In this case our attention is directed towards the article 11.9 which states: in alignment 1 that: Performance of the Contractors obligation shall not be considered to have been done until the Engineer has issued the performance certificate to the Contractor stating the date on which the Contractor completed his obligation under the contract. an alignment 2 rules that The Engineer shall issue the Performance certificate within 28 days after the lasts of the expiry dates of the Defects Notification Period, or as soon thereafter as the Contractor has supplied all Contractors documents and completed and tested all the works, including remedying any defects.

Consequently from this provision results that in FIDIC concept, performance is only achieved after: The defect notification period expired; and All Contractors documents have been supplied and completed and tested all the works, including remedying any defects. Different from performance we can say that completion is generally defined under subclause 10.1 of FIDIC (Red Book, Yellow Book and Silver Book). But, in any case, interpreting FIDIC provisions results that completion precedes performance. Basically, we DO NOT have performance if prior we do not have completion fulfilled under the terms and conditions of FIDIC. But achieving completion does not mean automatically that performance is achieved. After completion the Contractor has to comply with other obligation for the performance in the FIDIC concept to be achieved. Therefore, after completion, and in order to achieve performance, the Contractor has other essential obligation to comply with, as: Site clearance (YB sub-clause 4.23, 11.11); Remedying of defects (YB sub-clause 11.1); Providing the Statement at Completion (YB sub-clause 14.10); Providing the Draft Final Statement; (YB sub-clause 14.11); Providing further information if required (YB sub-clause 14.11); Discharge of the Employer (YB sub-clause 14.12). Other unfulfilled obligations (YB sub-clause 11.10) In conclusion, as we can see from FIDIC clauses, performance is more than completion .

b. How is determined if performance has been achieved? What problems can arise in the process?

As we have showed earlier FIDIC does not provide us a guideline for performance as it does for completion in sub-clause 10.1. Therefore, when, how or if the performance has been achieved will depend on: The applicable law; and The content of the contract. The lack of guidance for what means performance, contrary to completion, results that in the end the Engineer will have the task to determinate it within the limits of the contract and the applicable law, and will depend on what the Engineer deems necessary to satisfy the contract. But, again, this is a general formulation, and depends very much of his training, professional experience and how this one understands the contract. Therefore is important, in practice to ensure that all the parties involved in the construction process, the Contractor, the Employer and the Engineer have the same understanding in what exactly the works will comprise. Since no guidance is provided in the FIDIC for what performance is and when is achieved we can believe that this sooner or later will be subject of dispute. We have mentioned earlier that in FIDIC terms performance is more than completion since, after completion has been reached, the Contractor has to comply with other obligations for the performance to be achieved. So, in order for the performance to be achieved, first, completion has to be reached. But, in this respect, FIDIC provide us with some guideline regarding what the Contractor needs to provide in order to achieve completion and consequently, after the other obligation are met,performance. Under sub clause 10.1 from FIDIC (red or yellow book) the

Engineer must either: Accept the works; or Reject the works, case when the Engineer give reasons and specify the Work required to be done. In case the Engineer fails to actively reject the works, than the works shall be deemed takenover if they are substantially in accordance with the Contract. At this point a dispute can arise on 2 (two) matters: The Engineer reject the works and specify what works the Contractor considers is not obliged to perform; or The Engineer fails to react and the question is here if the works are substantially in accordance with the Contract?

Between these two cases are very important differences namely, in case of the first matter we are in the presence of a legal question: What is the Contractor obliged to perform and provide? When in the second case is more of technical problem which respond to the question: Is what the contractor already provided substantially in accordance with the Contract? In the first case the eventual dispute will be subject to the scope of additional or remedial works, and there will be questions if the Engineer is entitled under the contract to demand these works? As we have stated earlier this is a problem of interpreting the terms of the contract and the applicable law and to see if, finally, the Engineers way of interpreting the contract and the law matches with the point of view of a DAB member or arbitrator by case. When preparing the team for such a dispute is good to consider a lawyer with some Engineer support behind. In the second case since the Engineer has not made any kind of remarks rest for the Contractor to prove the works are substantially in accordance with the Contract. Here, first of all a determination of the works scope is mandatory which, in my opinion, is a problem of a legal nature. Sub-clause 10.1 from FIDIC changes the target from no defects that will substantially affect the use of the works, (see here sub-clause 10.1 a) to the works must be substantially in accordance with the contract (see here sub clause 10.1 last paragraph). Since no works were demanded by the Engineer the entire works must be investigated. So, is recommended a neutral investigation and an assessment of the result of the said investigation, which usually takes more time. In conclusion if in the first case, when preparing a team for dispute was good to consider a lawyer with some technical support and this second case we need a good Engineer with a great legal support.

c. Base your above answers on a legal system of your choice. Briefly discuss changes that might result from applicable law Bullets point suffices. .

FIDIC contracts were drafted considering English common law background and, therefore, they are complying one with each other quit well. While in English common law the construction contract is just another contract in French law the construction contract is, according to art. 1779 from Civil Code, specie of what is called: luoage douvrage et dindustry. Ruled by articles 1787-1799, le contract dentreprise, the construction contract as its called

by the French legislator, can be according to article 1787 from Civil Code for providing materials and workmanship, or either only for workmanship. The differences mentioned above have consequences in what regards the Contractors responsibility. In case the Contractor provides materials, according to art. 1788, and the works perish before being handed over, he is liable towards the Employer. It was ruled in French jurisprudence that the parish of works before being handed over due to a fire, is, for the Contractor in the application of art. 1788, a case when he cannot demand for the working costs because he was not able to deliver (Civ. 3e, 27 janv. 1976: Bull. Civ. III, n o 34.). If the Contractor provides only the workmanship and the work perish, he is held liable only for his fault, states article 1789 from French Civil Code. Accordingly, French jurisprudence held that it results from article 1789 that the Contractor (the French term uses was locateur douvrage), debtor of the things he was entrusted with, is not be released until is not established that they were not perished due to his fault (Civ. 1re, 9 fevr. 1966: Bull. Civ. I, no 103; 24 mars 1987: ibid. I, no 106). Following this situation we find that it has been stated lately that construction contracts under the French Civil Code are split in two parts, namely to provide workman shaft and second to provide proper materials. Despite all this, and for avoiding any doubts, the Contractor is due to deliver the works as agreed under the contract so that work to be fit for the intended purpose, functional and complete. For this reason the French courts decided that if during performing the works a fire destroys an important part of the work, which was consider a fortuity case, the Employer can get the contracts resolution and asking for his money back (Cass. Civ. 3e, 27 janvier 1976, Bull.civ. III, n 0 34). Comparing with FIDIC contract we can see that this construction contracts are made considering both operation: work performance and material delivery to be incorporated in the work. In some cases, as we will see bellow Contractors performance include also design responsibility. So, comparing with the FIDIC books, where clear if the Contractor is responsible for design (see Yellow and Silver Book) or is not (see Red Book) under the French Civil Book we cannot find such provisions. Therefore, will be necessary to determine very clear for what the Contractor is responsible or not. Nevertheless this minus can be covered by contractual provisions in roder to avoid useful future disputes. Different approach we can see in what regards the concept of completion. Under the French Civil Code can be reasonable said that completion is reach when the work is fully completed. Our opinion is grounded by interpreting article 1792 6 from French Civil Code but also by considering the related jurisprudence. So, based under the above quoted article the works is deemed to be fully completed when all the remedial works mentioned in the taking over minute were performed and after completed mutual agreed or, in case of disagreement, approved by the court (see paragraph 5 of article 1792 6 from French Civil Code). Another interesting aspect in relation with this article is that completion of works (French term being achievement de louvrage) is not seen as a condition for the works to be taken over. In this way is also the French jurisprudence which rules that article 1792 6 do not states that the construction of the imoble must be completed for the taking over to take place (Civ. 3e, 12 juill. 1989: Bull. Civ. III, no 161; Defrenois 1990. 376, obs. Souleau; Gaz. Pal. 1989.2. Doctr. 737, etude Guevel.). So, reception of woks can be done even they are not fully completed following for any remedies and defects to be mentioned in the taking over minute and performed within an agreed period of time or, contrary, within a period settled by the court.

agreed period of time or, contrary, within a period settled by the court. Following the above said and compering them with the FIDIC concepts of completion I reach the conclusion that: The concept of reception douvrage (taking over of works) we find in the Franch Civil Code is more similar to the FIDIC concept of completion.

We have seen similar that similar to the FIDC concept of completion weve found in French Civil Code the concept of reception douvrage. But, what about the FIDIC concept of performance? There is any similar concepts in the French Civil Code? In order to give an answer to this question we are coming back, again, to article 1792 6, paragraph 2 from the French Civil Code that rules: the guaranty of perfect execution, for which the Contractor liable within a period of 1 year since taking over of works, consist in all the remedies pointed by the Employer, by way of reserves mentioned in the takingover minute or by way of written notice for those occurring after taking over. Of course this guaranty of perfect execution can be aggravated and increased to 2 or 3 years, or even more. In the same time this type of guarantee continues to exist with the general liability (biannual, ten years liability etc.) (Civ. 3e, 17 Nov. 1993; Civ. 3 e; 27 janv. 2010). The execution of the works subject to the guarantee of perfect execution is ascertained by mutual agreement, or contrary, by the court according to article 1792 6, paragraph 5, from the French Civil Code. Basically, in my opinion, interpreting this article, results that: After the Contractor performs within 1 years guarantee period (or more, if otherwise agreed under the contract) the remedies pointed by the Employer, by way of reserves mentioned in the taking-over minute or by way of written notice for those occurring after taking over; and After the performance of all remedies subject to the guarantee of perfect execution are mutually ascertained or, contrary, by the court; the works can be consider as perfect executed ( in French parfait achevee). Following the above said and compering them with the FIDIC concepts of performance I reach the conclusion that: The concept of parfait achevement (perfect performance) we find in the French Civil Code is more similar and close to the FIDIC concept of performance. This because in both cases the performance and parfait achievement are attained after: The works are executed, following for the remedial works and/or by case the defects occurred within the defects liability period to be executed accordingly; The defect notification period elapsed and all the remedies/defects were executed accordingly.

In conclusion, we can see that each national law has its own concepts, which can be translated, but, even though in the majority of times a translation is possible, the real meaning of that concept is totally different. Because of that is very important when we choose a type of contract to see to what extent this complies with the concepts of the

national law, and not only to translate it word by word in the language chosen to be used in the contract. Take Home Exam on Performance and Completion, Variation, Defects, Delays, Damages and Extension of Time concerning the lectures from June 28 th to June 30th 2012

Author: Mag. MARIUS ANDREI ARIZAN

QUESTIONS: 1. Performance and Completion, Variation, Defects, Delays, Damages and Extension of Time, case study (Nicholas Gould). An argument that time is at large is often raised during extension of time disputes, but in reality it is rarely if ever a real problem under the English common law . Discuss and compare to a civil system of law of your choice. Time at Large is essentially an English Law concept which is not a legal term, but which describes the situation where, if a delay event occurs that is the Employers fault and the contract does not make provision for the delay, the original completion date falls away and time is put at large (Common Law Time at large Arguments in a civil law context by John Bellhouse and Paul Cowan). Situations when time for completion of the Works can be said is at large arise in the following five situations:

(a) (b)

No time for completion is fixed in the contract; Improper administration or misapplication of the extension of time provision in the contract;

(c) (d) (e)

Waiver of time requirements; The Employers interference in the certification process; when the extension of time provision does not confer power on the Engineer/Architect/S.O. to extend the time for completion of the Works on the occurrence of event or events which fall(s) within the obligation of the Employer.

The concept of time at large originated from the English law prevention principle. The basic tenant of the prevention principle is that no person can take advantage of the nonfulfilment of a condition, the performance of which has been hindered by himself (per Vaughan Williams L.J. in Barque Quilpe Ltd v Brown [1904] 2 K.B.264 at 274).

The prevention principle was explained and enunciated in the English Court of Appeal decision of Peak Construction (Liverpool) Pty Ltd v. McKinney Foundation Ltd, arguably the leading case on this subject. An earlier authority regarding the prevention principle can be found in the case of Amalgamated Building Contractors Ltd v. Waltham Holy Cross UDC where DJ Denning stated that: I would also observe that on principle there is a distinction between cases where the cause of delay is due to some act or default of the building owner, such as not giving possession of the site in due time, or ordering extras, or something of that kind. When such things happen the contract time may well cease to bind the contractors, because the building owner cannot insist on a condition if it is his own fault that the condition has not been fulfilled.

In Australia, the time at large principle was applied in its most extreme form in Gaymark Investments Pty Limited v Walter Construction Group Limited [1999] NTSC 143; (2005) 21 Construction Law Journal 71. In that case, the Arbitrator made the following findings:

(1) That the contractor was delayed in completing the work, including a delay of 77 days by causes for which the employer was responsible, but the contractor's application for an extension of time was barred because of its failure strictly to comply with the notification requirements for the extension of time clause.

(2) That the 77 days' delay constituted acts of prevention by the employer with the result that there was no date for practical completion and the contractor was then obliged to complete the work within a reasonable time (which the Arbitrator found that it in fact did) with the consequence being that Gaymark was prevented from recovering liquidated damages for delay.

The above case of law was widely criticised in Multiplex Constructions (UK) Ltd v. Honeywell Control Systems Limited Mr. Justice Jackson stated at paragraph 103: '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 financial 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.' The judge said that he had 'considerable doubts' whether the Gaymark case represented the law of England and concluded at paragraph 105, that: 'If the facts are that it was possible to comply with clause 11.1.3 [the extension of time clause] that Honeywell simply failed to do so (whether or not deliberately), then those facts do not set time at large.' On this basis, his Honour concluded that Honeywell's failure to comply with the notice requirement did not set time at large.

The effect of time being at large has an important consequence in what regards the liquidated damages clauses which become inoperative and, therefore, the Employer cannot longer rely on these clauses in order to impose liquidated damages onto the Contractor.

On the other hand, another consequence when the time is at large, is that the original completion dates or certified extended completion dates does not longer binds the Contractor, following for the work to be completed in a reasonable time. In this case another question arises: what is a reasonable time within the work to be completed? This questions of what is the duration of reasonable time is a matter of facts, not of laws, and therefore an answer has to be given considering all the circumstances existing at the time of performing the obligations but excluding all those circumstances that are under the control of the Contractor namely the party performing these obligations.

In what regards the civil law systems, some general law principles permit for the courts to adjust the amount of damages to be recovered by the creditors (in our case Employers) or to adjust the standard of performance where is just to do so. In this sense we can quote art. 1147 from French Civil Code which states that le debiteur este condamne, sil y a lieu, au payment de domage et interets, soit a raison de lexecution de lobligation, soit a raison du retard dans lexecution, toutes les fois quil ne justifie pas que linexecution provient dune cause etrangere qui ne peut lui etre imputee, encore quil ny ait aucune mauvaise foi de sa part. Basically, the above quoted article states that a debtor shall be ordered to pay damages, if there is occasion, either by reason of the non-performance of the obligation, or by reason by delay in performing, whenever he does not prove that the non-performance comes from an external cause which may not be ascribed to him, although there is no bad faith on his part. Analysing this article we observe that the French legislator states that the debtor is to be exonerate to pay damages in case the non-performance comes from an external cause which may not be ascribed to him. This external cause can mean in terms of construction, for example an obstruction from the Employer on granting access to the site for starting the works or an order for new additional works. Therefore, in my opinion, these external causes are analogue with the act of prevention concept we have in the English common law system. Different provisions of this type we can find in Romanian Civil Law system where, for example, art. 1350 align. 1 from the New Civil Code states that any person must fulfil the obligation he contracted following in align. 2 to rules that when, without justification , does not fulfil this obligation, the party is liable for the damages caused to the other party and is due to repair this prejudice, in the terms and condition of the law Interpreting this article . per a contrario we can deduct that in case the debtor is not fulfilling his obligation, because he has justification for this conduct, then he will not be liable to pay damages. Therefore, the concept without justification is analogue with the act of prevention concept we have analysed in the common English system of law. A different example of this type of provisions can be seen in the same Romanian Civil Code, namely art. 1541 align. 1 which states that: the court shall not reduce the penalty ( here penalty has the meaning of liquidated damages in English common law) excepting the

case when: a) the main obligation was partially executed and this performance profits the creditor; b) the penalty is way to excessive considering the prejudice which could have been presumed when the contract was concluded. From what we have related above, we can see that the legal concept of when the time can be at large is quite well set in English common law as well in the jurisdiction. On the other side, despite the fact that in civil law jurisdiction the formulation and legal arguments of the common law concept time at large can differ, we are, as we have seen, in the presence of principles that can be used in order relief the contractor whenever is just to do so. Basically, these civil law system principles does not allow the Employer to enforce the contractors obligations with the fixed completion date or to recover liquidated damages when these are a consequence of the Employers preventions and/or acts or its representatives. In conclusion these civil law principles are very consistent with the basics of time at large and prevention principle concepts.

QUESTIONS

2. Design, Testing, Taking over, Variations, Case studies, Focus on Hydro Plants and FIDIC ( Mr Werner Marckhgott) Show advantages and disadvantages for the Employer and the Contractor in case the works of a 1999 FIDIC are split into sections. According to sub-clause 1.1.5.6 from FIDIC 1999 (Red Book) a section is defined as a part of the works specified in the Contract data as a section (if any). Splitting the works of a large project into section may be associated with advantages for all the main parties involved in the construction process, in our case the Employer and the Contractor. In what regards the Employer: Increases flexibility on the part of the project owner to adapt the project to changing circumstances; He is not oblige to deliver the entire site but only section of it, and therefore the Contractor cannot defend himself of asking EOT for not being delivered with the entire site. As a practical use, for example in motorway construction contracts developed in Romania, a split section contract is very advantageous for the Employer (Government) since at the moment contracts were signed the expropriation procedures for all the Land were not ready. Enables him to use a complete part of the work earlier than if the project/s was/were not divided into sections; In terms of planning this have a great effect on a programme. Each sectional completion produces a separate critical path method for each section and thereby reducing float that might exist if it was just a single completion date; Force the Contractors to focus on a progressive completion rather to endeavour to hand over the entire project in one single day. On the other side, the Contractor: Has his liability limited in different way. In this respect each section of works will have its own specificity concerning: Time for Completion (Sub-Clause 8.2). Delay Damages (Sub-Clause 8.7). Delay damages will run only in respect of the section delayed;

Tests on Completion (Clause 9) Taking Over (Sub-Clause 10.1). The risk and possession of the section will be transfer gradually as the sections are finished and not only when the work is finished as a whole. Defects Notification Period (Clause 11). For each section will start running an independent defect notification period and this will be prolonged (in case defects are not remedied in the initial period) only in what regards the section to which performance was not achieved. Payment Conditions (Clause 14).

Splitting a contract in section it may have also disadvantages for both the Contractor and the Employer. In what concerns the Contractor: Under sub-clause 11.4, 2nd paragraph, case C, the Employer may terminate the contract as a hole (even is split in sections) if the Contractor has failed to remedy the defects notified and the defects deprive the Employer from the benefit of the whole of works. So, for example, even the other sections were good executed under the above clause the Employer has the right to terminate the entire contract, if the defects of one sections is not properly remedy and he is deprived form the benefit of the whole work.; The Contractor will be due to pay delay damages in case of delay in completion for each section, as the case it may be, even for example in case the final deadline for the whole work is respected; Under sub clause 11. 9 paragraph 2, the Performance Certificate will not be issued until the expiring of 28 days since all defects notification periods elapsed (for each sections) or soon thereafter the Contractor delivered all documents and completed and tested all works, including remedying any defects. This sub clause means that in the event works are split, for example, in 5 section and just one of them needs remedy, the Contractor is not going to get the Performance Certificate, even, in reality, the Employer use the entire project and possible obtains benefits. Until the Performance Certificate is not issued, under sub clause 11.9 paragraph 3 the works are not deemed to be considered accepted. Under sub clause 4.2., 5th paragraph, the performance security shall not be released until the Performance Certificate was issued, and as we have seen earlier this is not to be released only in the terms and conditions of sub clause 11.9. This mean that even This sub clause means that in the event works are split, for example, in 5 section and just one of them needs remedy, the Contractor is not going to get the Performance Certificate, and consequently the Performance security, even, in reality, the Employer use the entire project and possible obtains benefits; When trying to implement either sub - clause 10.1. or 10.2 will result in unfairness in release the retention money under sub clause 14.9. So, despite the fact the taking over certificate for a section is issued, the Employer will release 2 fifths after this moment, there other 2 fifths after the defect notification period expires and the last fifth, as we can understand from paragraph 1 and 2 of this sub - clause, after the defect notification period expires for the entire work. But, considering the specific of project when divided in sections, the period between one section and other can be even years, and is not fair to keep the retention until the last defect notification period of the work expires. The Contractor is due to meet several completion deadlines, and therefore to apply for different taking over certificates, and in case the sections are interdependent a delay in one section is going to delay the dependant section and therefore this will lead in delay damages. For better understanding let us consider the following example: the works are split in 4 sections and section 1 depends by section 4. If the works to section 1 are delayed because of the Contractors fault, automatically the works are to be delayed in section 4. Going further with our example, let us consider we are speaking about a school, and any delays in section 1 will lead in impossibility of taking possession of section 4 - pupils

are there ( section 4) - and impossible to move them in section 1 since is not ready yet; If a section is to be delayed by the Contractor he has only the remainder part of time to make good the delay. If it was just a single completion date for the hole work, the Contractor has a greater chance to make good the delay and, thereby, no delay arising at the end.

In what concerns the Employer: In case of sectional works the Contractor is due to meet several completion deadlines, apply for different taking over certificates and, in case the sections are interdependent, a delay in one section caused by the Employer is going to delay the dependant section with consequences, maybe, over the entire work. For better understanding let us consider the following example: the works are split in 3 sections and section 1 depends by section 3. If the works to section 1 are delayed because of the Employers fault, automatically the works are to be delayed in section 3. Going further with our example, let us consider we are speaking about a school, and any delays in section 1 will lead in impossibility of taking possession of section 3 - pupils are there ( section 3) - and impossible to move them in section 1 since is not ready yet. Consequently the works in section will not be able to start in section deadline delayed; From the moment of taking over of section the Employer will bear the risks of the section (sub clause 10.1);

QUESTIONS:

3. Performance and Completion, Variation, Defects, Delays, Damages and extension of time, Case studies: Focus on delay analysis (Mr Richard Morris)

a. What, according to the Society of Construction Law are the minimum information , requirements for the four main types of delay analysis? The minimum information requirements according to the Society of Construction Law are: The relevant conditions of the contract: The nature of causative events; The value of the disputes; The time available; The records available; The programme information available; The programmers skills level and familiarity with the project.

b. You are asked to advice on the delay analysis methodology to be adopted on a project

where there is a dispute over the entitlement to an extension of time. The Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project.

What method of delay analysis would you suggest and why? Generally the program which was current prior to the delay event occurring is the correct one to commence the analysis with. Since, in our case, the Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project which, in my opinion, the method of analysis to be used is the Time impact analysis (TIA). In the same manner, under art. 3.2.11 from the Protocol of Society of Construction Law from 2002 is recommendable to advice the method of Time impact analysis (TIA). This type of method, in contrast with the other 3(three) methods of delays analysis and theirs disadvantages, performs a series of analysis throughout the entire period of the projects. Time impact analysis is able to detect the causes of delays and theirs effect in the same time, simultaneously. By contrary the other type of delays analysis methods observe a schedule at single point in time (see Zack Jr. J. But for schedules- analysis and defence Cost Eng. AACE, 2001 43(8): 13 7; Sumpf Gr. Schedule delay analysis Cost Eng. AACE, 2000; 42(7):32 43). Basically the impact of each delay event is evaluated individually. Time impact analysis method using a CPM algorithm follows on the project, on a daily basis (day by day) from the beginning of the project until completion date. Additionally in this analysis, using that CPM algorithm, are included concurrent delays, recovery time and acceleration and consumption of float. This method, contrary to IAP and CAB method, incorporates both parties delay analysis. In this respect excusable compensable, excusable non compensable and non excusable delays are separately identified in this analysis. An indirect advantage of this method is mentioned to be that it provides for the contractual parties a discipline to keep project schedules up-dated and properly adjusted (see Wickwire J., Driscoll T., Hurlbut Construction scheduling preparation, liability and claims. New York NY. Wiley Law Publications 1991). Therefore, as a conclusion, we can say that the strengths of using this method are: Is easy to understand and has the more reliable result; Can be carried out contemporaneously since the Contractor produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project ( please to be seen art. 3.2.11 and section 2 of Protocol of Society of Construction law) Relies on contemporaneous intention; Considers dynamic critical path; Can identify approximate concurrency; Mitigation and concurrency can be addressed; Have support in case law Costain v Charles Haswell and Partners.

What would be the disadvantages of your chosen method? Limitations to this method exist, although, as we have stated earlier, this is the most credible delay analysis.

First of all, as a general principle, this type of method requires a large amount of information, therefore as planed schedule in CPM format is mandatory as well as periodical up-dates to the schedule. Strictly in our case would not be disadvantage since produced and issued a fully networked contract programme and updated that program on a monthly basis throughout the course of the project. Second of all this analysis method involves a large amount of resources and time. Therefore when time and resources are limited this type of method is not quit appropriate. Third of all the result of this analysis can be influenced by a variety of factors since is a complicated method which accumulates results from a variety of contemporaneous data. In conclusion I can say that disadvantages of the method suggested above are: Labour intense; Technically complex; Requires frequently prepared progressed schedule. But in our case this method is chosen since the Contractor issued a fully networked contract project. Cannot identify actual concurrent delay; Produced theoretical results based on hypothetical questions.

Would your decision be any different if the parties agreed to try mediation or board levels meetings before starting formal disputes resolution proceedings?

Without reiterating the advantages of TIA method, I would like just to mention that TIA use fragments for analysing delay events. The duration of each delay and theirs relation with project activities are then reviewed in detail with contemporaneous information following for the delays to be inserted in the project. Therefore, in my opinion, this analysis method provide for both parties the possibility to scrutinize the delay and reduce future disputes. In conclusion my advice will be the same. I will still recommend TIA method.

QUESTIONS: 4. Performance and Completion, Variation, Defects, Delays, Damages and extension of time, Case studies: Focus on performance/legal (Mr Volker Motzkus)

a. Describe the concept of performance according to the FIDIC contract. How does completion interact with performance? FIDIC form of contract does not contain a definition of what really means performance. In this case our attention is directed towards the article 11.9 which states: in alignment 1 that: Performance of the Contractors obligation shall not be considered to have been done until the Engineer has issued the performance certificate to the Contractor stating the date on which the Contractor completed his obligation under the contract.

an alignment 2 rules that The Engineer shall issue the Performance certificate within 28 days after the lasts of the expiry dates of the Defects Notification Period, or as soon thereafter as the Contractor has supplied all Contractors documents and completed and tested all the works, including remedying any defects. Consequently from this provision results that in FIDIC concept, performance is only achieved after: The defect notification period expired; and All Contractors documents have been supplied and completed and tested all the works, including remedying any defects. Different from performance we can say that completion is generally defined under subclause 10.1 of FIDIC (Red Book, Yellow Book and Silver Book). But, in any case, interpreting FIDIC provisions results that completion precedes performance. Basically, we DO NOT have performance if prior we do not have completion fulfilled under the terms and conditions of FIDIC. But achieving completion does not mean automatically that performance is achieved. After completion the Contractor has to comply with other obligation for the performance in the FIDIC concept to be achieved. Therefore, after completion, and in order to achieve performance, the Contractor has other essential obligation to comply with, as: Site clearance (YB sub-clause 4.23, 11.11); Remedying of defects (YB sub-clause 11.1); Providing the Statement at Completion (YB sub-clause 14.10); Providing the Draft Final Statement; (YB sub-clause 14.11); Providing further information if required (YB sub-clause 14.11); Discharge of the Employer (YB sub-clause 14.12). Other unfulfilled obligations (YB sub-clause 11.10) In conclusion, as we can see from FIDIC clauses, performance is more than completion .

b. How is determined if performance has been achieved? What problems can arise in the process?

As we have showed earlier FIDIC does not provide us a guideline for performance as it does for completion in sub-clause 10.1. Therefore, when, how or if the performance has been achieved will depend on: The applicable law; and The content of the contract. The lack of guidance for what means performance, contrary to completion, results that in the end the Engineer will have the task to determinate it within the limits of the contract and the applicable law, and will depend on what the Engineer deems necessary to satisfy the contract. But, again, this is a general formulation, and depends very much of his training, professional experience and how this one understands the contract. Therefore is important, in practice to ensure that all the parties involved in the construction process, the Contractor, the Employer and the Engineer have the same understanding in what exactly the works will comprise. Since no guidance is provided in the FIDIC for what performance is and when is achieved we

can believe that this sooner or later will be subject of dispute. We have mentioned earlier that in FIDIC terms performance is more than completion since, after completion has been reached, the Contractor has to comply with other obligations for the performance to be achieved. So, in order for the performance to be achieved, first, completion has to be reached. But, in this respect, FIDIC provide us with some guideline regarding what the Contractor needs to provide in order to achieve completion and consequently, after the other obligation are met,performance. Under sub clause 10.1 from FIDIC (red or yellow book) the Engineer must either: Accept the works; or Reject the works, case when the Engineer give reasons and specify the Work required to be done. In case the Engineer fails to actively reject the works, than the works shall be deemed takenover if they are substantially in accordance with the Contract. At this point a dispute can arise on 2 (two) matters: The Engineer reject the works and specify what works the Contractor considers is not obliged to perform; or The Engineer fails to react and the question is here if the works are substantially in accordance with the Contract?

Between these two cases are very important differences namely, in case of the first matter we are in the presence of a legal question: What is the Contractor obliged to perform and provide? When in the second case is more of technical problem which respond to the question: Is what the contractor already provided substantially in accordance with the Contract? In the first case the eventual dispute will be subject to the scope of additional or remedial works, and there will be questions if the Engineer is entitled under the contract to demand these works? As we have stated earlier this is a problem of interpreting the terms of the contract and the applicable law and to see if, finally, the Engineers way of interpreting the contract and the law matches with the point of view of a DAB member or arbitrator by case. When preparing the team for such a dispute is good to consider a lawyer with some Engineer support behind. In the second case since the Engineer has not made any kind of remarks rest for the Contractor to prove the works are substantially in accordance with the Contract. Here, first of all a determination of the works scope is mandatory which, in my opinion, is a problem of a legal nature. Sub-clause 10.1 from FIDIC changes the target from no defects that will substantially affect the use of the works, (see here sub-clause 10.1 a) to the works must be substantially in accordance with the contract (see here sub clause 10.1 last paragraph). Since no works were demanded by the Engineer the entire works must be investigated. So, is recommended a neutral investigation and an assessment of the result of the said investigation, which usually takes more time. In conclusion if in the first case, when preparing a team for dispute was good to consider a lawyer with some technical support and this second case we need a good Engineer with a great legal support.

c. Base your above answers on a legal system of your choice. Briefly discuss changes that might result from applicable law Bullets point suffices. .

FIDIC contracts were drafted considering English common law background and, therefore, they are complying one with each other quit well. While in English common law the construction contract is just another contract in French law the construction contract is, according to art. 1779 from Civil Code, specie of what is called: luoage douvrage et dindustry. Ruled by articles 1787-1799, le contract dentreprise, the construction contract as its called by the French legislator, can be according to article 1787 from Civil Code for providing materials and workmanship, or either only for workmanship. The differences mentioned above have consequences in what regards the Contractors responsibility. In case the Contractor provides materials, according to art. 1788, and the works perish before being handed over, he is liable towards the Employer. It was ruled in French jurisprudence that the parish of works before being handed over due to a fire, is, for the Contractor in the application of art. 1788, a case when he cannot demand for the working costs because he was not able to deliver (Civ. 3e, 27 janv. 1976: Bull. Civ. III, n o 34.). If the Contractor provides only the workmanship and the work perish, he is held liable only for his fault, states article 1789 from French Civil Code. Accordingly, French jurisprudence held that it results from article 1789 that the Contractor (the French term uses was locateur douvrage), debtor of the things he was entrusted with, is not be released until is not established that they were not perished due to his fault (Civ. 1re, 9 fevr. 1966: Bull. Civ. I, no 103; 24 mars 1987: ibid. I, no 106). Following this situation we find that it has been stated lately that construction contracts under the French Civil Code are split in two parts, namely to provide workman shaft and second to provide proper materials. Despite all this, and for avoiding any doubts, the Contractor is due to deliver the works as agreed under the contract so that work to be fit for the intended purpose, functional and complete. For this reason the French courts decided that if during performing the works a fire destroys an important part of the work, which was consider a fortuity case, the Employer can get the contracts resolution and asking for his money back (Cass. Civ. 3e, 27 janvier 1976, Bull.civ. III, n 0 34). Comparing with FIDIC contract we can see that this construction contracts are made considering both operation: work performance and material delivery to be incorporated in the work. In some cases, as we will see bellow Contractors performance include also design responsibility. So, comparing with the FIDIC books, where clear if the Contractor is responsible for design (see Yellow and Silver Book) or is not (see Red Book) under the French Civil Book we cannot find such provisions. Therefore, will be necessary to determine very clear for what the Contractor is responsible or not. Nevertheless this minus can be covered by contractual provisions in roder to avoid useful future disputes. Different approach we can see in what regards the concept of completion. Under the French Civil Code can be reasonable said that completion is reach when the work is fully completed. Our opinion is grounded by interpreting article 1792 6 from French Civil Code but also by considering the related jurisprudence. So, based under the above quoted article the works is deemed to be fully completed when all the remedial works mentioned in the taking over minute were performed and after completed mutual agreed or, in case of disagreement, approved by the court (see paragraph 5 of article 1792 6 from French Civil Code). Another interesting aspect in relation with this article is that completion of works (French term being achievement de louvrage) is not seen as a condition for the works to be taken over. In this way is also the French jurisprudence which rules that article 1792 6 do not

states that the construction of the imoble must be completed for the taking over to take place (Civ. 3e, 12 juill. 1989: Bull. Civ. III, no 161; Defrenois 1990. 376, obs. Souleau; Gaz. Pal. 1989.2. Doctr. 737, etude Guevel.). So, reception of woks can be done even they are not fully completed following for any remedies and defects to be mentioned in the taking over minute and performed within an agreed period of time or, contrary, within a period settled by the court. Following the above said and compering them with the FIDIC concepts of completion I reach the conclusion that: The concept of reception douvrage (taking over of works) we find in the Franch Civil Code is more similar to the FIDIC concept of completion.

We have seen similar that similar to the FIDC concept of completion weve found in French Civil Code the concept of reception douvrage. But, what about the FIDIC concept of performance? There is any similar concepts in the French Civil Code? In order to give an answer to this question we are coming back, again, to article 1792 6, paragraph 2 from the French Civil Code that rules: the guaranty of perfect execution, for which the Contractor liable within a period of 1 year since taking over of works, consist in all the remedies pointed by the Employer, by way of reserves mentioned in the takingover minute or by way of written notice for those occurring after taking over. Of course this guaranty of perfect execution can be aggravated and increased to 2 or 3 years, or even more. In the same time this type of guarantee continues to exist with the general liability (biannual, ten years liability etc.) (Civ. 3e, 17 Nov. 1993; Civ. 3 e; 27 janv. 2010). The execution of the works subject to the guarantee of perfect execution is ascertained by mutual agreement, or contrary, by the court according to article 1792 6, paragraph 5, from the French Civil Code. Basically, in my opinion, interpreting this article, results that: After the Contractor performs within 1 years guarantee period (or more, if otherwise agreed under the contract) the remedies pointed by the Employer, by way of reserves mentioned in the taking-over minute or by way of written notice for those occurring after taking over; and After the performance of all remedies subject to the guarantee of perfect execution are mutually ascertained or, contrary, by the court; the works can be consider as perfect executed ( in French parfait achevee). Following the above said and compering them with the FIDIC concepts of performance I reach the conclusion that: The concept of parfait achevement (perfect performance) we find in the French Civil Code is more similar and close to the FIDIC concept of performance. This because in both cases the performance and parfait achievement are attained after: The works are executed, following for the remedial works and/or by case the defects occurred within the defects liability period to be executed accordingly; The defect notification period elapsed and all the remedies/defects were executed accordingly.

In conclusion, we can see that each national law has its own concepts, which can be translated, but, even though in the majority of times a translation is possible, the real meaning of that concept is totally different. Because of that is very important when we choose a type of contract to see to what extent this complies with the concepts of the national law, and not only to translate it word by word in the language chosen to be used in the contract.