Construction Law/Termination


I was evaluating a termination and I would be very thankful if you help me in the issue

Key events
•The client was unhappy about the construction works and lack of tests for every batch of delivery of materials viz. rebar, conductor, HCB. The client requested this time and again.
•The consultant undermines that the defects are minor.
•The contractor insisted the materials are from same source and   no need for further tests & the client’s comment are exaggerated.
•The client first terminated the contract with the consultant purporting that he is not in the position to keep interest of the client. Two months after, the client also terminated the contract with the client stating that the contractor has refused to make the test as per specification of the contract. In the mean time, the client was assigning his representative.

The contract form is modified version of FIDIC, where it lists some fundamental breaches which lead to termination and also states that the engineer will determine whether an event is fundamental or not if the breach is not listed explicitly in the clause.

The event(failure to make material test) is not listed as fundamental breach in the contract and the consultancy contract was terminated before the construction contract and there is no ground for consultant to rate the even as fundamental or not.


Who will be the defaulting party?

Does the client terminated wrongly?

Should the client tolerate the breach for simple reason that the event is not stated as fundamental breach?

Can this be taken as termination for client convenience even if client is in default? (I mean shouldn't the client clearly state that it is convenience? I am asking this since the contractor is protesting that since the breach is not fundamental it will be treated as convenience.)

Dear get e. b.,

Without more information, it is difficult to give a definitive answer.  You do not say if the contract is based on FIDIC 4 or FIDIC 99 Conditions of contract, because they are very different.  There is more to this case than appears at first sight.  

The important question is whether or not the Contractor's testing was compliant with the Contract, particularly the Specifications.  If the testing was compliant, then the Employer was at fault and the termination was for the Employer's convenience.  

If the testing was non-compliant, then both the Engineer and the Contractor were at fault.  How did the Engineer determine that the work was compliant, without the specified tests?  If he could not certify the work as compliant, how could he certify payment?  The failure to test may not be a fundamental breach in itself, but the failure to provide the requested information could be considered a fundamental breach under clauses 15.1 & 15.2 of FIDIC 99.  

I feel that the whole situation could have been handled batter.  I know that I have not given you a clear answer to your question, but I hope that I have given you sufficient guidance for you to complete your evaluation.  

Construction Law

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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.


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