Construction Law/Change in Code


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, legislation 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

Dear Khaled,

You do not mention the form of contract, nor the applicable law, so the following comments are generic.  

This problem is a difficult one.  I would say that, using the principles of natural justice, the Contractor did  not have the opportunity to price the risk and thus he could claim for reimbursement of extra costs.  It is not a change in costs, but a new item.  It is not due to the application of a law which existed when he submitted his offer, but due to a change in codes.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
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Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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