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Construction Law/Performance Certificate (PC)

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Question
Our contract is based on FIDIC Yellow Book. Clause 11.9 required the Engineer to issue the PC within 28 days from the latest of the expiry dates of the Defects Notification Period (DNP), or as soon thereafter as the ........

What if Contractor still have defects not rectified for more than 28 days from the DNP? How long will the Engineer allow the Contractor to carry on to do rectification works? What are the damages the Employer can claim from the Contractor for failing to complete the rectification works?

Answer
Dear Wong,

Thank you for this question.

The contract intends that defects are resolved sooner rather than later but the FIDIC contract does provide expressly for defects being completed outside the period of the DNP. (see clause 11.1). This, however, should always be by agreement between the Parties and in the event that the Contractor is not acting diligently the Employer may, after issuing suitable warnings to the Contractor, undertake the outstanding works himself and will be entitled to compensation in accordance with sub-clauses 11.2 & 11.4.

The decision on timing of work to remedy defects is a matter which the Employer dictates. What is a reasonable time depends upon the circumstances and your question does not give sufficient information to allow me to make any educated assessment.

As for damages the Employer may be entitled to, I refer you to sub-clause 11.4(a)-(c). Each of those provisions is to be read separately; they represent separate remedies. Again, the lack of detail in yourvuestion dictates a somewhat generic answer. The wording of the FIDIC contract suggests that the Employer can recover the costs reasonably incurred in rectifying the damage. Clearly this will cover all the direct costs incurred; however the entitlement to consequential losses will depend upon the circumstances and the relative foreseeability or remoteness of the loss claimed.


I am sorry that I cannot be more specific at this time. If there is further information you can provide, I will be happy to review again.



Kind regards,
John Dowse

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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