Construction Law/Application of Law
Our Contract states: "The contract price shall not be amended due to change in rates of wages or shall be modified due to decrease in exchange rate or difference in rates of materials, consumables, fuel or energy or change in shipping, insurance or custom duties or due to application of a law or constitution"
My question is; we now are encountering an issue regarding the issuance of a new technical code Re; (the insulation factor of a building) by the local governmental organisation of codes and standards.This new code has been issued after the first submission date of the tender by the Contractor and right before awarding the job to him. Now, does the Contractor deserve a variation if applying the new code on the design which is to be performed by him (the project is Design-Build) OR we can use the above clause to defend ourselves against his request? i.e. a new code could be considered as a change in laws or legislation or not?
Dear Mr. Khaled,
Thank you for your question. I feel what I can guess from your statement that new code has arrived before signing of the contract. It means that the Client would like to negotiate its inclusion in the agreement through a memo of understanding and at that stage you can come up with extra cost if any due to its inclusion in the tender provision. Please let me know if I have correctly understood your question.