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Construction Law/Interpretation of contract


Dear Sir,
i would like to ask you to help me with one situation.
not fidic contract.
the general contractor signed with a subcontractor a subcontract to build a road in the mountainous area.the subcontract provides of building a road, the certain section, with the subcontractor's own resources. so we build starting from subgrade up to paving concrete pavement. we have our own subcontractor also. even there is a main contractor we are acting under this subcontract as a "main contractor" having our own subcontractors to do the job. we submit our own ipa for the work done. the problem is on our section entrusted to us under the contract the main contractor started milling of the existing asphalt pavement without any notification or whatsoever. according to the contract 4.7 the main contractor can proceed with any job directly or by entrusting the job to any other subcontractor on our section if the subcontractor, i.e we, refuse or unable to do the work within the agreed deadline after we expressly authorize the main contractor. despite our calls to stop the work they are ignoring our requests, we even threatened that we will stop the works. in this case what shall we do? we never refused, or informed them of our inability to perform the work of any type, and we have never expressly authrized them to go ahead with milling on our section. should we ask them to make a supplementary agreement? And also can you comment on what "agreed deadline" means?
thank you for your help in advance.

Mr Mansur,
Sorry for the delayed response.
From what you have described, I can say it is a clear case of your main contractor throwing his power as main contract. no matter how many subcontractors and suppliers working under you, it is not going to affect your relationship as sub-contractor to your main contractor. As per your contract, the main contractor has the right to carry out the work on his own / by any other sub-contractor ONLY after fulfilling all the following conditions:
1. when you fail to complete the stretch of work or stage of work within the contract duration / as per the agreed intermediate milestones
2. When the main contractor has proved that you had defaulted from completing your work on time.
3. when the main contractor has notified his intention to carry out the work on his own / engage some other contractor to complete the works
4. when you have failed to respond to his correspondence and failed to act on completing the stretch of work within the time given in the notice / if any relevant clause in the contract
5. Or when you convey your inability to complete the work - in writing to the main contractor.
however, in this case, the main contractor has breached the contract.
you need to do the following:
1. take photographs of main contractor damaging / carrying out some work on your semi finished work / finished work prior to handing over to him.
2. write to him and create record that he is doing so without prior notice to you
3. include in the letter that you are unable to continue your scope of work due to his intervention and your resources are idle and the you would incur additional cost and time to rectify the damage and complete your work.
4. collect and preserve photographic evidences of you having completed the work. This would be available from the previous weekly reports / any status reports / presentations you made to main contractor.
5.  write to the main contractor in polite language that you are prevented from discharging your duties as stipulated in the contract.

Do not threaten the main contractor that your would stop the work. Even if you stop the work, it should be made to look that it is because of main contractor's intervention.....

in my opinion, an 'agreed deadline' means any of or all of the following:
1. the contract duration mentioned in the agreement
2. the last date of handover as per the project schedule submitted by you but not objected by main contractor within 28 days.
3. any other intermediate milestones mentioned in any of the schedules submitted by you OR mentioned in the contract.

If you keep proper records as mentioned above, you would certainly become eligible to claim additional cost and extension of time.
The main contractor has already breached the contract agreement in force. There is no need to make supplementary agreement.
Hope I have clarified adequately
---r sivaraman

Construction Law

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