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 In Canada, is it true that you cannot have a late penalty charge unless you have a bonus clause?
Is Late Penalty/ bonus clause legal if drafted by the contractor and not tne client?
Answer Under the UK legal system, as a matter of principle, it has been judged that you cannot have a penalty clause without a bonus clause. I presume that it would be similar in Canada, but I do not have any detailed knowledge.
Currently, the relevant clauses in construction contracts specify liquidated and or ascertained damages, rather than penalties. The legal reasoning is that only courts can impose penalties for criminal acts. The damages are paid to recover the costs suffered by the other party due to a failure by one party to fulfil their obligations. For example if handover of a building is delayed and the Employer has to continuing occupying another building, then he will have costs – continued rent, loss of rent or income from the new tenant/owner. Liquidated damages, which are stated in the contract, are meant to compensate the Employer without recourse to long arguments.
I prefer to stay with liquidated damages and resolve bonuses in a different way. In UK road rehabilitation, the contractor pays rent for the roads when they are closed to traffic for his work. This rent is included in his unit rates for the work. If he finishes early, then he does not have to pay the rent, which acts as a bonus. In a supervision contract, I state the duration and include a clause which allows for an extension of five months without an increase in price. If the job finishes early, the supervisor does not have to pay the staff salaries for this period.
It does not matter who drafts a clause. If it is legal and included in the contract, then it is binding. You might have an argument regarding abuse of privilege if the terms are particularly unfair to you, but it is unlikely.
