Construction Law/Application of Law

Advertisement


Question
Dear Sir

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?

Thank you

Answer
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.

Regards,
Liaqat Hayat

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Liaqat Hayat

Expertise

I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

©2016 About.com. All rights reserved.