AboutPeter M. Elliott Expertise 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.
Experience Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit.
George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
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')
Question Hi, I am a Subcontractor and haven't gotten a draw in 60 days because the General Contractor/Developer's not getting thier money from the bank. They say that the bank wants to wait until the job's complete since we're close to finishing. I'm just starting out and don't have the money to cover payroll so I had to "Demobilise". I did this once before, while I was a Super., for another Subcontractor years ago, and we got $5,000.00 to Demoblise & $5000.00 to Remoblise. Since I have pulled off the job they have attempted to suppliment my manpower, without giving me a Three Day Notice, and say that it won't come out of won't com out of my Contract Amount. I know the contractor/developer, from a previouse job, so I started the job without signing the contract because I told them that I couldn't do monthly draws and would require weekly or bi-weekly draws. I have both copies of the contract with thier signature but I haven't signed them because they were supposed to the draw periods but never did. The job is 75% completed now and most of the subs have pulled off. Am I right about Demobilising or can I be accused of abandenment? If I am right do I have to serve some kind of notice and can I charge them for it like the company I worked for 20 years ago did? I appreciate any direction you care to offer. Sincerly, John
Answer Hi John,
This question is well outside my field of expertise, but I will try to give you some general advice. The exact rules regarding abandonmnt will depend on your contract and the laws which apply to your contract.
You may have a contract in force, even if you have not signed the paper. A signed paper copy is not necessary for a contract to exist, but it makes life easier to prove the basis of the Contract when things go wrong. However, your requirement for fortnightly payments could be considered as a counter offer, and thus no contract exists. In the latter case, you get paid on a 'what's it worth?' basis. There is a whole rake of case law on this subject.
I suggest that the first thing that you do is talk to the main contractor to see what his position is. It could be that the contractor is using the bank as an excuse to delay payments due to other problems. He should have allowed in his bid for delayed payments by the bank, and he should be able to charge the bank for interest and financing costs, if the bank really is delaying his payment.
If he is sympathetic, he may waive any rights regarding abandonment. Alternatively, he may agree to pay your demobilisation and remobilisation costs. The most important thing is to talk and continue talking, objectively and unemotionally. If your payments are small, he may be able to finance them out of his reserve (profit), without waiting for the bank to pay. Assuming that he is happy with your work and that it has been profitable for him, it is in his interest to keep you alive for the next job. Whatever you do, confirm all agreements, or disagreements, in writing, so that there is no misunderstanding of what was agreed.
I sympathise with you. It is one of the classic problems of small businesses, going bankrupt while making a profit due to unfavourable cash flows. It's a jungle out there. Be careful.
