Construction Law/Change in Villa Design due to authority instruction b
Subject: Change in Villa Design Ė Design changes
Project: Construction of 500 Villas
Contract: Design & Built
Dear Mr. Liqat Hayat
Background of the issue:
During the inception stage, Client approved a mockup villa (in different emirates). The Contractor priced the project in line with the tender documents (master plan and approved drawing Ė Mockup villa Plan). Based on the approval by the client, the Contractor developed the Villa design and when it was submitted to the Local Municipality approval (different emirates) the authority rejected the design and asked the Contractor to change the design completely, saying that it does not match up with the local custom. The GFA as per old design and new design remains same. Municipality hasnít introduced any new design. Client tried to convenience the Municipality and lost. Due to the instruction by the authority the Contractor suffered a
1. Delay (EOT & Prolongation cost)
2. Additional cost due to redesign and
3. The construction cost (Increase in structural quantities of the villas as per the new design)
Contract Conditions: (usual one)
1. Contractor should comply with all authorities regulations and the project budget must not vary
Question: Whether we (contractor) is entitled for the above claim
Thank you for your Question
The project appears to be on design built basis as a result of mock Villa design and contract price is based on it. It means designer canít escape liability for the produced design. It is also normal practice that designer is familiar with local rules of the design approving authority and I am not sure how contractor can escape his responsibility specially when it is a design built contract. Sometime Designers are hired by Design -build contractors to work on design aspects only in their setup for such contracts in which he also arranges for a professional indemnity bond. The lack of knowledge for local municipality rules is not a big issue but still its consequences need to be borne as per risk allocation agreed in contract document / terms of professional liability bond between the two parties. Another point to ponder is, can rejected design in this manner form the basis of any compensation to the contractor? Is there any clue on this in contractual provisions? I feel Contractor can only lodge a claim in due course as per provisions of relevant clause in the contract but its chances of success are totally dependent on the provisions agreed in the contract and contemporary record available.
Can you throw some light on this aspect, before I can respond to your real question?