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Construction Law/Advantages can be gained by Notice on Errors in Contract Documents

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QUESTION: Dear Sir,
General Conditions of Contract: FIDIC MDB June 2010
Sub-Clause:1.8 Care and Supply of Documents - Last Para

Last para of above sub- clause is as follows.
"If a party becomes aware of an error or defect in a document which was prepared for use in executing the Works, the party shall promptly give notice to the other Party of such error or defect."

My questions are as follows.

1. As I think, since this clause is in the General Conditions of Contract, any party can contractually talk about its contents, only once the Contract is awarded. Please clarify whether I am correct.

2. What are the advantages, each party can gain by the said notice?

3. If the said Notice was given by the Contractor and by which he points out errors in the BOQ prepared by the Employer in a 'Measure and Pay Contract', say on missing BOQ items,which any Tenderer has not pointed out before tendering, is it possible to get them incorporated in the BOQ as a Variation?

Thank you.

ANSWER: Dear Shantha,

Thank you for this question. There are a lot of variables to be taken into account so I will keep my answer brief by making minimal assumptions.

On your first point, if bidders note an error in the documentation during the tender stage there vis an regiment that they should notify it at that time. If they do not there is a risk of losing entitlement.

As to advantages, the FIDIC contract is intended to be a co-operative model; there are too many ambiguities in it. Whether or not it is operated in this way, it requires a contractor to give notice of an intention to claim within a limited time of becoming aware of the event or circumstance. If he does not he could lose his entitlement entirely. This will depend very much upon the legal jurisdiction in which the project is performed and the law governing the project. The disadvantage, therefore, is on the contractor if he fails to issue his notice.

Following on from the previous points, assuming all notifications are given correctly then any error in the BoQ remains the Employer's liability and is to be corrected. Whether or not a variation order will be needed will depend upon the nature of the error; a mere increase in quantities might not require a VO but a new item probably would.


I hope that this assists you.

Kind regards,
John Dowse

Follow me on Twitter: @CernoOrg
For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line; or visit www.cerno.org

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---------- FOLLOW-UP ----------

QUESTION: Dear Sir,
Thank you very much for your invaluable clarification.I regret to disturb you again.I am grateful, if you would kindly clear me one point.

We just believe that, if you do not notify on the errors in the documents prior to Tendering, you will never be allowed to raise them later. But we have never seen anywhere it is so recorded.

Is it a legal requirement? Is it the meaning of the text in your reply that, "----------- there is a regiment that they should notify it at that time."?

Thank you sir in advance.

Answer
Dear Shantha,

Thank you for this question.

Please accept my apologies for the spelling errors in my last response; the phrase should have read ".... there is an argument that they should notify it at that time".

I do not known of any legal case that a contractor must notify during the tender stage; however, the Contractor does warrant that the accepted contract amount is sufficient for all matters. Proving that a contractor should have noticed an error during the tender stage would be almost impossible, particularly in circumstances where none of the bidders brought the error to attention.


I hope that this assists you.

Kind regards,
John Dowse

Follow me on Twitter: @CernoOrg
For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line; or visit www.cerno.org

Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to info@cerno.org (When e-mailing, please include “AllExperts” in the subject line.)

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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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