Construction Law/Commencement Date
QUESTION: Hello Mr. Dowse,
We are working under FIDIC Yellow form. The Letter of Acceptance states; " The contract will be affirmed by the employer subject to completion and acceptance of the following; Within 28 days of your receipt of this Letter of Acceptance you are hereby instructed to (a) Finalize review of design solution (b) forward the Performance Security in accordance with Sub-Clause 4.2 of the General Conditions of Contract,......"(SIC)
We are looking for an opinion of the word "affirmed" in the above context. Our interpretation is that items a and b are conditions precedent to the contract being effected. The client issued a Commencement Notice without approving the design. When we wrote to them advising that the Commencement Notice can only be issued following compliance with the above items (a & b). In return they said that the word affirmed means "signed".
ANSWER: Dear Brian,
Thank you for this question, which represents a very typical query on the use of language after the event; when one party uses a word which they think everyone will understand without question.
Absent any definition of the term "affirmed" one would look to see if the standard, commonly used definitions fit the context.
The dictionary, typically, defines "to affirm" as to confirm or ratify, to uphold, or to support. The context in which the phrase was used is that the affirmation will be "subject to completion and acceptance of ......". From this I infer that both the Contractor and the Employer carried individual obligations. The question then follows, what was to be completed and accepted? In this respect I think the wording is vague and, in principle at least, should be interpreted to the Contractor's benefit (providing that the wording was drafted solely by the Employer, without the Contractor's input).
For the foregoing reasons I consider that the Employer did not intend to affirm (or sign, or confirm) the contract until both (a) and (b) had been completed and the Employer (or his representatives) had given their agreement. In the circumstances I consider that the word affirm can mean "to sign" but the context implies that signing is subject to certain conditions having been met.
I hope that this assists you.
Follow me on Twitter: @CernoOrg
For my regular industry newsletter e-mail to email@example.com, stating SUBSCRIBE in the subject line
Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to firstname.lastname@example.org (When e-mailing, please include “AllExperts” in the subject line.)
---------- FOLLOW-UP ----------
QUESTION: Thank you for the answer Mr. Dowse. One final question please:
We are sticking to our understanding that the Commencement Date issued wasn't effective due to the condition (a) not being fulfilled until much later, i.e, the client didn't approve our design until 7 months after we initially submitted it (it went through several iterations which they called ("improvements").
We are now asking for a revised Commencement Date but we have muddied the waters by actually starting temporary and permanent works on site! We have submitted and been paid for works. Given this, can the Commencement Date be revised now that we undertook work (at our own risk) and were paid for same?
Thank you for this further question.
Given that you have commenced on site and, therefore, accepted the Coomencement Date, I suggest that an appropriate course of action would be to claim an extension of the Time for Completion, citing delay on approval of the design and the Employer influencing the design development. This route would bring your claims for payment within the Contract, whereas proceeding as you have suggested may give rise to payment and liability issues.
I hope this assists you.