Formation of Construction Contracts in The Construction Industry - The Procedures, Types and Problems PDF

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FORMATIONOFCONSTRUCTIONCONTRACTSINTHECONSTRUCTIONINDUSTRY:THEPROCEDURES,TYPESANDPROBLEMS
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2015
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FORMATIONOFCONSTRUCTIONCONTRACTSINTHECONSTRUCTION
INDUSTRY:THEPROCEDURES,TYPESANDPROBLEMS
HITS:9974
Writtenby:
G.JayaPrem
(ProsecutionDivision)
Theterm'construction'canincludeanyworksinvolvingbuilding,repairing,erectinganddemolitionofanyhouses,roads,highways,shoplots,
commercialcomplexes,schools,factories,bridges,golfcourses,resorts,hotelsandmanymore.Toalayman'smind,constructionworksimplymeans
works involving excavators, cement, sand, bricks and men wearing boots and safety helmets at an empty site. However, the issues that arise in the
constructionindustryarenotaseasyasitseemstobe.Moreoverthemassiveexpansionoftheindustryoverthepastfewdecadeshasresultedinmany
different skills due to the natural outcome of modern technologies, as well as the economical and sociological impact. This demanded different
professionals, experts and suppliers in the industry. As the industry expanded and developed further, problems also tend to affect the construction
industry.Thisisduetotheunclearnatureofrelationshipsbetweenthepartiesandtheboundariesoftheindustrywhicharealsonotclear.1
Keatingdefinedaconstructioncontractasfollows:
'Abuildingcontractisanentirecontractforthesaleofgoodsandworksandlabourforalumpsumpricepayablebyinstallmentsasthegoodsare
deliveredandtheworkisdone.'2
InMalaysia,theconstructioncontractsaregovernedbythegeneralelementsandrulesofcontractinvolvingperformanceanddischargeofdutiesand
theContractsAct1950[Act136]3.Generally,constructioncontractscanincludecarryingoutconstructionoperations,arrangingforotherstocarryout
constructionoperationsandprovidingmanpowerandlabourfortheoperationofconstructionprojects.Astheconstructioncontractsaregovernedbythe
Contracts Act, the principle of offer and acceptance supported by consideration to make a legally binding contract still applies. However, due to the
complex nature of construction contracts, the application of this principle may sometimes cause uncertainty. Before understanding the nature of a
buildingcontract,wewouldfirstneedtoidentifythediverseprofessionalsinvolved.
Allconstructionworksarecarriedoutforthebenefitofaclient.Theclientistheemployerwhobuystheconstructionwork.Thecontractoristhe
builderwhocarriesouttheconstructionworksforthebenefitoftheemployer.Thesearethetwomainplayersinaconstructionproject.Theemployer
alsoneedstoengageanarchitectandbriefhimastothedesignoftheprojectwhichwilllaterbeformulatedbythearchitect.Thearchitectowesthe
employeraprofessionaldutyofcareundertheircontractualrelationship.Therefore,hewouldneedtolayouttheplanandthespecificationsasexpected
bytheemployerandmonitortheoperationsoftheconstructionworkstobecarriedoutaccordingtothecontract.Insituationsofengineeringcontracts,
theemployerwouldengageanengineerwhowillcarryoutalltheengineeringworksasrequiredbythecontract.Hisrolewouldbesimilartothearchitect
wherebyhetoowouldoweacontractualprofessionaldutyofcaretotheemployer.Insomecases,theemployerwouldalsoneedtoengageconsultants
(onlyforlargebuildingcontracts)whowouldbeexpertsincertainfieldsasrequiredbytheproject.4
Theconsultant'srolewouldbeclearlystatedinthecontractandmainlyinvolvessupervisionworkintheareasofhisexpertise.Inaddition,the
employerwouldalsoneedtoengageaprojectmanagerwhodoesnotnecessarilyhavetobeanexpertintheconstructionfieldashisrolewouldmainlybe
organizational. Usually, the employers would prefer to have someone they trust as their project manager who would then organize the works. Their
natureofworkisnotcertainanddiffersaccordingtothecontractandrequirementofeachproject.Thenwehavethesubcontractorswhowouldcarryout
alltheworkssubcontractedbytheemployers.5
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Finally,wehavethesuretieswhoareresponsibleforholdingcash.Theyeitherassuretheperformanceoftheworkonbehalfofthecontractoror
guaranteethepaymentonbehalfoftheemployer.Thisisthelistofthemainplayersinaconstructioncontract.However,thislistisnotexhaustiveandit
mayincludeothercategoriesofprofessionalsaccordingtotherequirementsofeachprojects.6Asaconstructioncontractrequiresthecollaborationof
servicesfromdifferentpeoplefromdifferentbackgroundsforitssuccess,itisbetteriftheagreementbetweenthemcouldbeclearlydocumentedandis
legallybinding.Thismayinvolvemanydifferentcontractdocuments.
Contractdocumentsarebasicallysetsofdocumentscontainingtheexpresstermsandagreementofthecontract.Mainlyitwouldbemadebetween
theemployerandthecontractorandalsootherpartiesinvolvedinaconstructioncontractsuchasthearchitects,engineers,subcontractors,quantity
surveyors, consultants and other professionals. The contract documents will clearly describe each and every party's duties and obligations for the
performanceofthecontract.Therearemanytypesofcontractualdocumentsintheconstructionindustry.Amongthemarethearticlesofagreement,
conditions, architect's plans and drawings, specifications and other documents. Another basic element of any contract is a laid out plan on contract
documentstodealwithanyunforeseeneventsorconditionswhichmighthinderthecommencementoftheprojectinanyway.7
Articlesofagreementortheagreementwillcontainplanningofaproject,preamblessettingoutthedutiesandobligationsofthepartiesandthe
names of the parties involved. Conditions of the contract will contain elaboration of the express legal terms and conditions which will govern the
contractualrelationshipbetweentheparties.8
Architecture'sPlansandDrawingscouldbesaidtobeoneofthemostimportantsetofdocumentsasthemainpurposeofthesedocumentsareto
enablethepriceoftheworkstobecomputed.Plansarethelayoutofaconstructionprojectingraphicalmannerwhichwouldbebuiltonaparticularsite.
Itwillcontainthemainfeaturesoftheprojectincludingthefloorplansandelevations.Drawingsaredocumentswhichwillgiveaviewofthedifferent
parts of a project. These documents can be in relation to more than one discipline depending on the number of consultants engaged such as the
engineers,architects,andinteriordesigners.9BillsofQuantitiesareasetofbillswhichquantifiesalltheworksoftheprojectindetail.Thesedocuments
areequallyimportantinaconstructionprojectastheextentofworkstobeexecutedbythecontractorinaconstructionprojectwouldbedescribedina
quantifiedmannerinthesedocuments.Tomakethebillsofquantitiescontractuallybinding,ithastobestatedexpresslybythepartiesinthearticlesof
agreement.10
Specificationsarelessstrictinnatureinthesensetheydon'thaveastandardmethodtobedraftedintheconstructionindustry.Itwouldbe
sufficient if these documents clearly describe the works to be executed and the required materials and goods to be supplied. Similar to the Bills of
Quantities,thespecificationsdocumentstooneedtobeexpresslystatedinthecontractifthepartiesintendthemtoformpartofthecontract.Apartfrom
these, there are also other documents which are equally relevant such as the letter of intent, letters generally made during communication between
partiesinacontract,invitationtotenderandmanymore.11
Oncealltherelevantpartiesagreetotheirtermsandconditionsafterperusingallthenecessarycontractdocuments,theconstructionworkswould
normallystarttobeperformed.Thisiswhendisputesandproblemstendtoarisetoo.Disputescouldeitherhappenduringthebeginningstageornear
completionorevenaftercompletion.Thereisnolimittowhatcouldcauseadispute.Itmaybeduetotheworksdelayed,shortageofgoods,ornoclear
instructions.Thepublicmaybeinjuredfromtheobjectsfromtheconstructionsiteandlegalclaimsmaybemadeagainsttheparties.Anypartymay
breachtheconditionsofthecontractorevenrefusetocarryonwiththeworks.Aftercompletionoftheworks,theemployermayarguethattheworks
donearenotaswhatwasexpectedordefectsmaybeidentified.Alltheseareexamplesofdisputeswhichmayariseinaconstructioncontract.Before
consideringtheproblemsanddisputesintheconstructioncontracts,weneedtofirstidentifythevarioustypesofBuildingContracts.12
Firstisthelumpsumcontract.Whathappenshereisthattheindividualwhowantsaprojectcompletedagreestopayaspecificlumpsumofmoney
uponcompletionofthework.Here,thefinalcostisalreadydecidedanditisuptothecontractortogetthejobdonewithintheirbudget.Alumpsum
contractdoesnotimposeanyrequirementforthecontractortoprovideabreakdownofthecostsassociatedwiththework.Thepersonprovidingthework
wouldinsteadagreetotaketheburdenofallthecostsinexchangefortheagreeduponpaymentattheendofthecontract.Ifthecostofdoingthework
endsupbeingmorethantheagreedpayment,thiswouldmeanthatthecontractorwillhavetoforkouttheadditionalcostfromhisownpocket.Onthe
otherhand,iftheymanagetofinishtheworkunderthebudgettheygettokeeptheadditionalmoney.13
Thistypeofcontractcanbegoodinthesensethatthepersonwhowantstheprojectcompleteonlyneedstomakeonepaymentattheendofthe
work.Italsoremovestheuncertaintyabouthowmuchthefinalcostisgoingtobe.Thereisnoneedforthoseorderingtheprojecttoworryaboutcosts
getting out of control. So long as they are sure about how much the job is going to cost they will be able to agree upon a final payment that will be
rewarding.Thefactthatthereisnoneedtojustifyexpensesmeansthattheywillhavealotmorefreedominhowtheygetthejobdone.Allcontractsneed
tobeclearabouttheexpectationsofbothpartiesbecauseanyvaguenesscouldlaterleadtodisputes.Itisstandardpracticeforthecontracttoalsohave
somesortoftimelineforwhentheworkshouldbecomplete.14
InthecaseofSumptervHedges[1898]1Q.B.67315,abuildercontractedtoerecttwohousesandstablesonthedefendant'slandforalump
sum,butabandonedthecontractpartcompleted.Thedefendantfinishedtheworkbyusingthematerialsthatthebuilderleft.Itwasheldinthiscase
that"thelawisthat,wherethereisacontracttodoworkforalumpsum,untiltheworkiscompleted,thepricecannotberecovered."(pg674).
Thiscasereflectstheprinciplethatintheabsenceofentitlementunderthecontract,thebuilderwasnotentitledtopaymentforthefinishedwork,
despite the fact that the employer retained the benefit. This is the traditional principle in relation to lump sum contracts. In such situations, the
employerswouldtendtoarguethatthecontractorwouldneedtocompletethewholeworkandcanonlybepaiduponcompletionofthesaidwork.Of
course,thecontractorswouldargueotherwise.Letusnowconsiderthis.Whatifthereareonlytwoitemsoutoffortyitemsomittedbythecontractor?
Wouldtheemployerbeabletoarguethesame?Canheclaimfordamages?
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DoctrineofSubstantialPerformance
ThisdoctrinealludedtoinSapiahtoonvLimSiewHui[1963]29MLJ305whichadoptedtheprincipleinHoeningvIsaacs[1952]2All
E.R.176.
Thefactsofthecaseareasfollows.ThePlaintiffenteredintoacontractwiththeDefendant(whoclaimedthatheisacontractor)tobuildthehouse
for$8500.ThePlaintiffthenmovedintothehousebutrefusedtopaythebalance$1,500onthegroundsthattheerectionofthehousewasnotcompleted,
thereweredefectiveworks,inferiormaterialandthatthetimberusedwasnotinaccordancewiththecontract(i.e.failureofconsideration).Asaresult,
thePlaintiffclaimeddamagesandspecialdamagesamountingto$5,840forhavingthehousecompletedanddefectsremedied.TheDefendantcounter
claimedforasumof$1,500.Itwasheldinthiscasethat:
Inalumpsumbuildingcontractitdoesnotnecessarilymeanthattheentireperformanceisaconditionprecedenttopayment.Itisnotevery
breachofthepromisetocompletetheworkwhichabsolvestheemployerfromhispromisetopaythepricebutonlyabreachwhichgoestotherootof
thecontract,suchasanabandonmentoftheworkwhenitisonlyhalfdone.Ifitisnotonewhichgoestotherootofthematter,theemployermustpay
thepriceandbringacrossclaimfordefectsandomissionsoralternativelysetthemupindiminutionoftheprice.16
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ThismeansthattheordinaryruleofdischargeofcontractbyperformancestillappliesandthereforetheDefendant(theContractor)wouldneedto
completetheworksbeforehecanclaimforpaymentsentitled.
TheJudgeinthiscasereferredtoBuilding & Estates Ltd v AM Connor [1958] MLJ 173anddecidedthattherulerequiringexactand
preciseperformancebythepromisorasaconditionprecedenttohisrightofrecoveryunderalumpsumcontracthasbeenmodifiedtosomeextentby
judicialdecisionsanditisnowwellestablishedthatincertaincircumstancesapromisorwhohassubstantiallyperformedhissideofthecontractmaysue
onthecontractforalumpsumbut,ofcourse,remainsliableindamagesforhispartialfailuretofulfillhiscontractualobligations.17
Basedonthetwocasesreferredabove,wecanclearlyseethechangesorprecisely,modificationsintheprincipleoflawasissuestendtogetmore
complicatedovertheyears.LetusnowconsiderthefactsofthecasewhichwasreferredtointhecaseofBuilding & Estates Ltd v AM Connor
[1958]MLJ173.ThePlaintiffagreedtobuildahousefortheDefendantforalumpsumof$21,492.TheDefendantoccupiedthehousebutrefusedto
paythebalancepriceonthegroundthatitwasnotbuilttospecificationandthatmuchofworkwasdefectiveandofinferiorquality.Itwasheldthatthe
Defendant cannot refute the liability to pay lump sum on the ground that the work, though substantially performed, was in some respects not in
accordancewiththespecificationandplans.ThePlaintiffcansueforthecontractpriceprovidedonthebasisthattheycanshowthattheworksconstitute
substantialcompliancewiththecontract.TheDefendantwasonlyentitledtodeductasumforthecostsofmakinggoodofthedefects.Inrelationtothe
strictruleunderthecommonlawitwasheldasfollows:
Therigourofthecommonlawrulerequiringexactperformancebythepromisorasaconditionprecedenttohisrightrecoveryunderalumpsum
contracthasbeenmodifiedtosomeextentbyjudicialdecisionsthatincertaincircumstancesapromisorwhohassubstantiallyperformedhissideof
thecontractmaysueonthecontractforlumpsumbutremainsliableindamagesforhispartialfailuretohisfulfillhiscontractobligations.(pg174)18
AnothercasewhichwasreferredtoinSapiahtoonisthecaseofHoenigvIsaacs[1952]2AllE.R.176.InthiscasethePlaintiffwasemployed
by the Defendant to decorate and furnish a flat for the sum of 750, the terms of payment being net cash, as the work proceeds and balance on
completion.Defendantpaid400byinstallments,butrefusedtopaythebalanceof350onthegroundthatsomeofthedesignandworkmanshipwas
defective.DefendantclaimedthatPlaintiffwasentitledtosueforquantummeruitonlybecausecontractpricetoohigh.Defendantwantedtorejectthe
pricealtogetherandtopayreasonablepriceforworkdone.Plaintiffrefusedtoclaimonquantummeruitbasis,butinsistedonthebalance350,lessa
deductionforthedefects.Theissuewaswhetheranentireperformancewasaconditionprecedenttopayment.
Itwasheldthatevenifitwasalumpsumcontract,itdoesnotmeanthattheentireperformancewasaconditionprecedenttopayment.Whena
contractprovidesforaspecificsumtobepaidoncompletionofspecifiedwork,thecourtleansagainstaconstructioncontractwhichwoulddeprivethe
contractor for payment at all simply because there are some defects or omissions. There has been a substantial performance of the contract and the
Defendantwasliablefor750,lessthecostofremedyingthedefects,whichwasassessedat56.19
Fromthiscase,ithasbeenemphasizedthatapromisetocompletetheworksisonlyatermandnotacondition.Theemployerscanonlyresist
payingifthebreachgoestotherootofthecontractsuchasincasesofabandonmentoftheworkwhenitishalfdone.Otherwise,theymustpay,andcross
claimforanydefectsandomissions.20
InLightweightConcreteSdnBhdvNirwanaIndahSdnBhd[1995]5MLJ351,therevisedlumpsumcontractwassignedonthebasisthatalump
sumbonuswillbegivenifthePlaintiffscompletetheworksby31.8.1992.However,iftheyfail,theywillbeimposedwithaRM10,000penaltyperday
until completion. The Plaintiffs completed the work by 31st August 1992. The issue in this case was whether the Plaintiffs can claim for a lump sum
bonus?TheDefendantsarguedthattherewasacollateralcontract.TheDefendantswereapprobatingandreprobating.Theyreliedonthelumpsum
contractintheircounterclaimforliquidateddamages.TheCourtallowedthePlaintiffsclaimforthelumpsumbonus.21
Insummary,fromthecasesreferred,weknowthatforalumpsumcontract,entireperformanceisnotnecessarilyaconditionprecedenttopayment.
Ifthecontractprovidesaspecificsumforspecifiedworks,theownercannotrefusepaymentmerelyonthegroundthattherewasdefectivework.The
contractorisentitledtopaymentifheachievessubstantialcompletionandheisentitledtothecontractpricelessasumbywayofsetofforcounterclaim
foranydefects.
EntireContract
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Inanentirecontract,theperformancebyonepartyisapreconditiontotheliabilityoftheotherparty.Inotherwords,itisacontractinwhich
CPANEL
neitherpartycandemandperformancebytheotherunlesshehimselfeitherhasperformedhisobligationsorisotherwisereadyandwillingtodoso.
Accordingly,thecontractorcanonlyexercisehisrighttopaymentdependingonhisentireperformanceofhisobligationsunderthecontract.22
InthecaseofYong Mok Hin v United Malay States Sugar Industries Ltd [1966] 2 MLJ 286, payment was made by installment
towardstheprogressofconstructiononthecertificationbythearchitect.ThePlaintiffsreceived4progresspayments.Theissuewaswhethertheclaim
madewasforthe5thprogresspaymentcertifiedbythearchitect.Itwasheldthatitwasnotanentirecontractorlumpsumcontractasthecontractgives
anexpressrighttopaymentbyadvancesonaccountofthecontractpriceastheworkproceeds.TheCourtallowedtheemployersclaimfordamagesas
thecontractorfailedtocompletetheworksasalteredwithinreasonabletimeandtheamounttobesetoffexceedingcontractorsclaim.23
InMing&CovLeongPingChing[1964]30MLJ312,acontractfortheconstructionofanextensiontoamaternityhomewasconcludedata
priceof$28,500.Theworkprogressedsatisfactorilyforthefirstfewmonths.TheDefendantmadeanumberofadvance payments. The Defendant
(owner)allegedthatthecontractorshadabandonedthecontractandthatshewasentitledtocompletethework.ThePlaintiffs(contractors)claimedthat
theywereentitledtoaquantummeruitof$11,119ofwhich$9,000hadbeenpaid.Thedefencewasthatthiswasanentirecontractand,ontheauthority
ofSumptervHedges,theDefendantarguedthatthePlaintiffscouldnotsueonacontractwhichtheyhadabandoned.
GillJheldthatTheanswertothatisthatinthefirstplacethePlaintiffsdidnotabandonthework,and,inthesecondplace,thiswasnotanentire
contract.Anentirecontractisoneinwhichtheentirecompletionoftheworkbythecontractorisaconditionprecedenttopayment.Tomymind,a
contractinrespectofwhichprogresspaymentsaremadefromtimetotimeisnotanentireorlumpsumcontract.Therewereprogresspayments
althoughmentionedasadvancepayment.Thequantummeruitof$11,119wasallowed,lessthe$9,000alreadypaidtothecontractors.24
Insummarythecourtwillnotonlylookatthecontractitselfbutalsotakeintoconsiderationtheconductofthepartiesindeterminingwhetheritis
anentirecontract.Ifprogresspaymentwaspaidprogressivelythroughouttheproject,thenitisnotanentirecontractandthecourtwillallowpayment
onaquantummeruitbasis.
Inthiscase,wehavetonotethatprogressofworkssloweddownbecauseoftheDefendantsactiontocontinueusingthepremisesbecauseshewas
impatientandheractionsshowedthatshewantedtocontinuewiththeworksandcompleteherself.Atthesametime,thePlaintiffsstoppedworkatthe
siteandtheDefendantrefusedtoallowthemtocompletetheworkthereafter.25
Measureandvaluecontracts
Acontractinwhichtheamountpayabletothecontractorisoncompletiondeterminedbymeasuringtheworkdoneandvaluingitinaccordancewith
thecontractratesandpricessetoutinabillofquantitiesorscheduleofrates.26
Managementcontracts
The trend in the United Kingdom has been for most work on large building projects to be subcontracted by the contractors so that the only
personneldirectlyemployedarethemanagementandsupervisorystaff.Sucharrangementshavebeenformalizedwiththenowfairlycommonuseofa
management contract under which the contractor undertakes only to manage the project and employs a subcontractor from designated persons in
respectofwhomhisliabilitymaybelimited.Themanagementcontractorisnormallypaidtheprimecostofworksplusafee.27
DesignandBuildContracts
Intraditionalconstructioncontractpractice,thereisamoreorlessrigiddistinctionbetweendesignandconstruction.Designisthetaskofthe
engineerorarchitectandistakentobeexcludedfromthecontractorsfunction.Thedistinctionisentirelyremovedincertainmodernformsofcontracts,
sometimesdescribedasdesignandbuild/turnkey/colloquiallyapackagedealcontract.Thesearecontractsunderwhichthecontractorundertakesto
designthewholeorpartoftheworksinaccordancewiththeemployersrequirementtocarryoutsuchworksandtohandthemovercompletedtomeet
suchrequirements.28
Costpluscontracts
Contractsunderwhichcontractorsaretobepaidthecostsactuallyexpendedplusanamount(fixedorcalculatedasapercentageonthecost)for
profitandsuchcostsasarenotvouchedfor.Theyaresometimescalledasprimecostorfixedfeecontracts.Theyareakinalsotocontractswherethe
contractorispaidonatimeandmaterialbasisorfordayworks.29
Termcontracts
Acontractunderwhichthecontractorundertakesforaterm(forexampleayear)tocarryoutsuchworkasmayberequiredofhimbytheemployer.
Paymentwillgenerallybemadebytheapplicationofanagreedscheduleofratesfortheworkcalledfor.Anexamplewouldbeanannualcontractforthe
maintenanceofroadswithinpartofacountryorcontractsinrelationtolocalauthorityownedhouses.30
Wehavelookedatallthetypesofcontract.Nowletusdiscusstheproblemswhichmayariseinaconstructioncontract.
i)Dutytosupplyallreasonablynecessaryitems:
Generally,thecontractorisexpectedtosupplyallreasonablynecessaryitemstocompletetheworkundertaken.Whatwillhappenhedoesntabideby
thisobligation?
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InthecaseofWilliamsvFitznaurice(1858)3H&N844abuilderagreedtomakeahouseandinparticulartodoandperformalltheworks
ofeverykindmentionedandcontainedintheforegoingspecification,accordingineveryrespecttothedrawingsfurnishedthehousetobecompleted
anddryandfitforoccupationbyAugust1st1858.Thespecificationdescribedthefloorjoistsbutnottheflooringitself.Thebuildersrefusedtosupply
andinstalltheflooringwithoutadditionalpayment.ChiefBaronPollocksaid:
Ihadsomedoubtwhetherthespecificationwasnottoberegardedasthecontractbetweenthepartiesbutuponthewholefactsbeingdisclosed
itappearstomethatnopersoncanentertainanyreasonabledoubtthatitwasintendedthatthe[builder]shouldprovidetheflooringaswellasthe
othermaterialsrequisiteforthebuildingandthatitwasmerelybyinadvertencethatnomentionofflooringwasmadeinthespecification.31
Fromthiscase,ithasbeenestablishedthatthecontractorshaveadutytosupplyallreasonablenecessaryitemsinordertocompletethework
undertaken.Howwouldtheemployerbeabletooccupythehousewithouttheflooring?Itwouldbeexpectedthatareasonablepersonwouldunderstand
thatthehouseistobecompletedtogetherwiththeflooringsandnotmerelybyprovidingonlythefloorjoists.Thisprincipleprotectstheemployersfrom
anyattemptbythecontractorstorelyonagenuineinadvertenceinacontract.However,itshouldbenotedthatthiscaseonlyappliestosituationswhere
itemswhicharereasonablyexpectedornecessarytobesuppliedbythecontractor.32
ii)Theeffectofconditionsonsitebeingworsethananticipated:
InthecaseofBottoms v Mayor of York (1892) referred from Hudsons Building Contract 4th Edition Vol II p. 208, the contractor
claimedextrapaymentbecausethegroundconditionswereworsethanhehadanticipated.Thecourtheldthatonatrueconstructionofthecontractthe
employerhadnotwarrantedthestateofthegroundandhencethecontractorcouldnotclaimanyadditionalpayment.LordEshersaidofthecontractor:
therealreasonwhyhehascometohismisfortune,indeed,isthathewouldgoandtenderwhentherewasnoguaranteegiventohimastothe
kindofsoilandthatheeithertooeagerlyortoocarelesslytenderedandenteredintothecontractwithoutanysuchguaranteeorrepresentationson
theirpart,andwithoutdueexaminationandenquirybyhimself.Thatiswhathasproduceddifficulty.
Theprincipleinthiscaseimposedadutyonthecontractorstoreasonablyconductinspectionsonthesitetheywouldliketotender.Thisisequally
importantasitwouldavoidcontractorsarguingforextrapaymentsinthefutureduetotheirowncarelessness.Althoughtherearenotmanysuchcases
andnowitismorelikelythannotthatthecontractorswouldconductinspectionsonthesitebeforeembarkingonaproject,nevertheless,tomeitremains
asagoodstartingpointofrulesforthecontractors.Italsoservesasaremindertoanypotentialcontractorswhotendtobelazy.33
iii)Designobligationsandotherprofessionalservices:thescopeoftheobligationassumed:
In the case of IBA v EMI and BICC (1980) 14 BLR 1, the litigation resulting from the collapse of the Emley Moor television mast, for example, Lord
Scarmansaid:
intheabsenceofaclearcontractualindicationtothecontrary,Icanseenoreasonwhyonewhointhecourseofhisbusinesscontractsto
design,supplyanderectatelevisionmastisnotunderanobligationtoensurethatitisreasonablyfitforthepurposeforwhichitwasintendedtobe
used.
Again,wecanseefromthiscasethattheCourtsseemtoimposedutiesbasedonthereasonablenesstestonthecontractors.IagreewiththeJudge
thatthecontractorshouldcheckwhetherthesupplyisfitforitspurposeornotbeforeworkingonthem.Again,itservesasaveiltoanycontractorswho
intendtobenefitfromtheirowncarelessness.34
iv)Variations:
Althoughitisnotnecessarytoelaborateonvariationsatthispoint,Ifeelthatitisimportanttobrieflydiscussonthisasvariationshaveprovedinthe
constructionindustrytobeaproblemtoo.
v)Variationsforthecontractorsbenefit:
Case:SimplexPilingvStPancrasBoroughCouncil14BLR80
Facts:thevariationwasrequestedbythecontractorwhowascontractedtoinstalldrivenpilescapableofcarryingastatedload.Piletestingwastobe
carriedoutduringtheworkbut,surprisingly,thepilecapacityfellwellshortofthecontractrequirement.Thecontractorthenadvisedtheboardpiling
downtoamorecompetentstratumandthearchitect,whobythetermsofthecontractwasgivenwidepowerstovarythework,agreed.
Held:Theletterinwhichthearchitectsignifiedhisagreementtochangetheworksconstitutedanarchitectsinstructionforavariationwhichunder
thecontractentitledthecontractortoreceiveadditionalpayment.35
Note:TheSimplexruledoesnotapplyincasesofbreachofcontract.
vi)NonCompliancewiththespecificationsordrawings:
Equivalentperformance:
Ifthecontractorperformsworkwhichisnotthestipulatedworkbutclaimsthattheworkdoneasequivalenttoorbetterthanthespecifiedwork,the
questionthatwillariseiscanthecontractualobligationsbemetbysuchaperformance?Thecontractorsmaybeclaimingthattheworkasperformedisa
sufficientperformanceofthecontractualrequirementbecause
Thedifferencebetweenwhatissuppliedandwhatwasspecifiedisinconsequentialsincethelawisnotconcernedwithtriflingdifferences(deminimis
noncuratlex).Hencetheemployercannotcomplain.Or,theworkperformedisdifferenttothatstipulatedbutnonetheless,itstillcompletelysatisfies
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theemployersneedsandpurposesundertheagreement.36
Illustration:
AcontractoragreestoinstallbathroomfittingsmanufacturedbyAandofatypespecifiedindetailhowever,thecontractorfindsalternative
fittingswhichareslightlydifferentfromthosemadebyAbutwhichfunctionwell,aremadeofsimilarmaterialsandlooksimilar.Whentheemployer
discoversthefittingssupplied,canthecontractorclaimthathisperformanceissufficient?
Answer:
a.FittingsforanexpensivehouseNotdeminimis.
b.FittingsforpublicconveniencesDeminimis.
vii)Aclaimthattheworksuppliedisperfectlysatisfactoryeventhoughitdoesntcomplywiththespecifications:
Case:Forman&CoProprietaryLtdvTheShipLiddlesdale[1990]AC190,
Facts:thecontractoragreedtoundertakecertainspecifiedrepairstoashipwhichhadbeenstrandedoffthecoastofWesternAustraliaforalumpsum.
Theycarriedouttherepairsandtheshipbenefited.However,therepairsperformedwerenotpreciselythosestipulatedspecifically,irongirderswere
used instead of steel. The contractor, when challenged, said that the iron girders were better than the steel girders specified, and they were more
expensive.
Held:ThePrivyCouncil,however,advisedthatthecontactorswereinbreach.37
FormationofContract
Thecontractorsobligationmaychangewithtime.Thismayhappenintwoways.Firstiswherethecontractitselfisvariedorsecondwherethe
contractprovidesamechanismforthescopeorspecificationoftheworktobevariedandhowthemechanismistobeoperated.
Theelementsofcontractare
i. OfferandAcceptance
ii. Considerationspricepaid/promisetopay
iii. Capacitytoentercontract
iv. Intentiontocreateanagreement
v. Formalityrequiredbylawmustbecompliedwithand
vi. Considerationandobjectofthecontractmustbeillegal.38
InSydenhams (Timber Engineering) Ltd v CHG Holdings Ltd [2007] EWHC 1129,thecourtanalyzedthatamongtheissuesasto
contractformationiswiththefollowing:
i. Abindingconstructioncontractusuallyrequires,asaminimum,agreementastoparties,priceandworkscope
ii. Theremustbeanintentiontocreatelegalrelations
iii. Wherethetransactionwasperformedonbothsides,itwilloftenmakeitunrealistictoarguethattherewasnointentiontoenterlegalrelations.39
TherearealsosituationswheretheacceptancecanbemadebyconductaswhatwasdecidedinthecaseofAEYatesTrenchlessSolutionsLtd
vBlack&VeatchLtd[2008]EWHC3183(contractnotsigned).Itwasheldthattheemaildated2Novemberwasanofferasnotalltheterms
wereagreedupon.However,whenYatesstartedtoworkatthesite,itwasconstruedasanacceptance.
InImminghamStorageCompanyLtdvClearplc[2011]EWCAciv89(contractsignedbutnotreturned)itwasheldthattheintentionof
thepartiesandthewordingusedareimportant.Thepartiesinthiscaseactedasifthecontractwasalreadyinplace.Itwasheldthattherewasacontract
betweenthepartiesandthattheywouldjustneedaformalcontractasformality.
TheissuesinrelationtoongoingnegotiationsandnoticeoftermswerealsoconsideredinthecaseofJackson(trusteeinbankruptcyofThakrar)and
othersvThakrar(abankrupt)andothers[2007]EWHC271inwhichtheCourtheldthattheexchangeoflettersdidnotamounttoanagreement.Itwas
furtherheldtherecouldbenobindingagreementuntilthepartieshadmadedetailedagreements.
Accordingly,wecanseethedifferenceaswecomparethefactsandthedecisionsofthecasesreferredtoabove.TheCourtgaveimportancetothe
intentionoftheparties.However,thereisnodoubtthatwhatevertheirintentionsmaybe,itwouldbebestifthepartiesexpresslystatetheirintentions
inwriting.
LetterofIntent
Itisnotsurprisingthatlettersofintenthavealsobeenanissuetobelitigatedinconstructiondisputesaswhathappenedinthefollowingcase.
RTSFlexibleSystemsLtdvMolkereiAloisMullerGmBH&CoKG(UKProductions)[2008]EWHC1087TCC
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Christopher Clake J held that parties had entered into a letter of intent stating that the parties would enter into a contract within four weeks. The
contractwasheldtohavecometoanendontheexpiryofthefourweekswithnoformalcontracthavingbeenconcluded.Theclaimantproceededwiththe
work(andwaspaidforpartofit)anditwasheldthatpartieshadenteredintoafurthercontract.
Asisapparentfromtheabove,aftertheletterofintentexpired,RTScontinuedtobuildtheequipment,deliveredittoMllerandwerepartially
paidforit.Inthosecircumstances,thecourtstronglyinclinedtowardsconcludingthatthepartieshaveenteredintosomesortofcontracteventhough
suchacontractcannotbespeltoutbyaclassicanalysisofthesequenceofofferandacceptance.
Thisdecisionisareminderofthedangersofexecutingworkunderaletterofintent.Nodoubtthatcommercialpressurewillcontinuetoforce
contractorstocommenceworkbeforeafinalwrittencontractismade.However,itisalwaysnecessarytoensurethatalltermsareexpresslysetoutinthe
letter of intent and later incorporated into a written contract as soon as possible. Clear language should be used by the parties to reflect their true
intentionswhilecreatinglegallybindingobligations.Thisway,alotofproblemsanddisputescouldbeavoidedbybothpartiesinaconstructionwork.40
InTrenthamvArchitalLuxfer[1993]1LloydsLR25SteynLJdecidedasfollows:
Secondly,itistruethatthecoincidenceofofferandacceptancewillinthevastmajorityofcasesrepresentthemechanismofcontractformation.
Itissointhecaseofacontractallegedtohavebeenmadebyanexchangeofcorrespondence.Butitisnotnecessarilysointhecaseofacontract
allegedtohavecomeintoexistenceduringandasaresultofperformanceThethirdmatteristheimpactofthefactthatthetransactionisexecuted
ratherthanexecutory.ItisaconsiderationofthefirstimportanceonanumberoflevelsThefactthatthetransactionwasperformedonbothsides
willoftenmakeitunrealistictoarguethattherewasnointentiontoenterintolegalrelations.Itwilloftenmakeitdifficulttosubmitthatthecontractis
voidforvaguenessoruncertainty.Specifically,thefactthatthetransactionisexecutedmakesiteasiertoimplyatermresolvinganyuncertainty,or
alternatively,itmaymakeitpossibletotreatamatternotfinalisedinnegotiationsasinessential.Inthiscasefullyexecutedtransactionsareunder
consideration. Clearly, similar considerations may sometime be relevant in partly executed transactions. Fourthly, if a contract only comes into
existenceduringandasaresultofperformanceofthetransactionitwillfrequentlybepossibletoholdthatthecontractimpliedlyandretrospectively
coversprecontractualperformance
Intheabovementionedcase,theCourtemphasizedontheperformanceofthecontract.Theargumentoftherebeingnointentiontoenterlegal
relationswouldnotstandifthetransactionsofthecontracthavebeenexecuted.Thisprinciplepreventstheemployersfromtakingadvantageofthe
contractorsincaseswheretheentirecontractreliesonachainofcorrespondence.
Letusnowconsiderafewcasestudiesinrelationtothetopicofformationofcontracts.
Problemstudy1:
HADGKISS(actingasdelegateoftheEmploymentAdvocate)vBarclayMowlemConstructionLtd.214ALR463
Facts: The Respondent was awarded a contract for the construction of a large residential apartment complex. The Respondent subcontracted the
project.Robsonwasthecontractorthatprovidedexcavationandothercivilconstructionworkstodevelopers.ThebuilderssubmittedtotheRespondent
thetenderinthatrespectivework.Overthenextmonths,bothpartiesnegotiatedthepriceandcontracttermsthatwouldapplytothework.Whenthe
agreementhadbeenreachedinprinciplebutbeforethecontracthadbeensigned,theRespondentrefusedtoengageRobson.
Theissueinthiscasewaswhethertherewasacontractforservicebetweenthedeveloperandthecontractorwheretherewasnoformalagreement.
ItwasheldthateachofthefactorsstatedinthecasesuggestsagainsttheRespondentandtheirintentionduringthemeetingheldon26November2002
wastoconcludeanagreementthenandthere.
1. Itwaslaterconfirmedinthecourseofthemeetingheldon26November2002thataformalcontractwouldbedrawnuptogoverntherelationship
betweentheRespondent(andwho?)andthattheContractorwouldhavetosigntheformalcontract.
2. ItwasagreedthattheRespondentwouldbeprovidedcopiesofthecontractorspublicliabilityandworkerscompensationcertificatesofinsurance
andalsoaconsiderablebodyofadditionalinformation.Theinformationtobeprovidedbythecompletionofthedocumentsgivenincluded
importantformalinformationsuchasthelegalnameandABNofRobsonandinformationrelevanttoajudgmentastotheappropriatenessof
Robsonasasubcontractor
3. Therequestfor,andtheprovisionof,theinformation,assurancesandundertakingsprovidedbythecompletionofthesedocumentssuggestsagainst
theRespondentthattheyhadalreadyenteredintoabindingagreement.
4. Inaddition,thecircumstancesinthecasehadbeentakenintoconsiderationofhowthemannerthemeetingwasconcludedevidencethatinthe
relevantindustrydealsaresometimesdoneonahandshake.Iacceptthatthosepresentatthemeetingof26November2002thoughtthattheir
negotiationswouldleadtoadealbeingconcludedwiththeresultthatRobsonwouldbeasubcontractortotheRespondentontheGosford
project.
The Court concluded by words saying to the effect [Y]our offer is accepted on the condition that you can start work tomorrow, is in the
circumstancestobeunderstoodasthatthecontractorstenderwouldbeacceptedbytheRespondent.TheCourtalsofoundthattheRespondentandthe
contractor did not intend to conclude a bargain before the Respondent had an opportunity to give consideration to the documents as agreed on 26
November2002tobeprovidedtotheRespondent.41
Problemstudy2:
TanAhChim&SonsSdn.Bhd.vOoiBeeTat&Anor[1993]3MLJ633
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Facts:D1hadenteredintoaJVAwithathirdparty,Tanforasaleandpurchaseofalandfortheconstructionofdwellinghouses.Cl.22oftheAgreement
providedthatthisagreementshallbebindingontheheirs,personalrepresentatives,successorsintitleandassignsoftherespectivepartieshereto.
Later,TansoldthelandtothePlaintiff.D1consentedtothesaleandassignedallhisrights,titleandinteresttoD2.
TheissuewaswhethertherewasavalidassignmentoftheJVAfromD1toD2.TheCourtfoundthattheassignmentwasvalidinlaw.TheCourt
lookedintotheconstructionofthecontracttodeterminewhethertherewasavalidassignment.Itwasfoundthat:
TherewasanintentionforD1andTantobeatlibertytoassigntheirrights,titleandinterestsundertheJVAwithoutconsentbytheotherparty.
ThewordsofCl.22areclearandunambiguous,hencetheCourtrefusedtoacceptextrinsicevidenceororalevidencewhichwouldbeinadmissibleunder
ss.91 and ss92 of the Evidence Act 1950 despite which the Court also should consider that there circumstances where the construction of words in a
contractmustnodoubtbeconstruedwithreferencetothefactsknowtothepartiesandincontemplationofwhichthepartiesbedeemedtohave
usedthemsuchfactsmaybeprovedbyextrinsicevidence.
TheconductofthepartiesfollowingtheexecutionoftheJVAreinforcestheviewthatitwastheirintentionthattheirright,titleandinterestwereto
befreelyassignable.
Accordingly,weunderstandthattheremaybethefollowingissueswhichmayariseinConstructionofaContract
i. Expressedintention
ii. Alteration
iii. ImpliedTerm
iv. Variations
v. Risk,IndemnityandExclusionClause42
RulesofConstruction
Generally,therulesofconstructionmerelypoint[s]outwhatacourtshalldoinabsenceofexpressedorimpliedintentiontothecontrary(Re
Coward (1887) 57 LT 285).Thereisonlyrecoursetothecourtwhenthereissomeambiguityorinconsistency,forifthewordsareplain,thecourt
giveseffecttothem.
InCityConnectManagementLimitedvTeliaInternationalCarrierUKandanother[2004]EWHC2357,theCourtindeciding
theexistenceofacontractforpaymentsofabortivecostshadconsideredtheprinciplesoftheconstructionofcontractssummarizedbyLordWilberforce
inPrennvSimmonds[1971]3AllER237asfollows:
Thetimehaslongpassedwhenagreements,eventhoseunderseal,wereisolatedfromthematrixoffactsinwhichtheyweresetandinterpreted
purelyoninternallinguisticconsiderationsWemustenquirebeyondthelanguageandseewhatthecircumstanceswerewithreferencetowhichthe
wordswereused,andtheobject,appearingfromthosecircumstances,whichthepersonusingthemhadinview.43
InInvestorsCompensationSchemevWestBromwichBuildingSociety[1998]1AllER,thecourthassummarizedtheprincipleas
follows:
Interpretationistheascertainmentofthemeaningwhichthedocumentwouldconveytoareasonablepersonhavingallthebackgroundknowledge
whichwouldreasonablyhavebeenavailabletothepartiesinthesituationinwhichtheywereatthetimeofthecontract.
AsreferredtobyLordWilberforceasthematrixoffact,thisphraseifanythingisanunderstateddescriptionofwhatthebackgroundmayinclude.
Subjecttotherequirementthatitshouldhavebeenreasonablyavailabletotheparties,itincludesabsolutelyanythingwhichwouldhaveaffectedthe
wayinwhichthelanguageofthedocumentwouldhavebeenunderstoodbyareasonableman.44
Thelawexcludesfromtheadmissiblebackgroundthepreviousnegotiationsofthepartiesandtheirdeclarationsofsubjectiveintent.Theyare
admissible only in action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation
differsfromthewaywewouldinterpretutterancesinordinarylife.Theboundariesofthisexceptionareinsomerespectsunclear.45
Themeaningwhichadocument(oranyotherutterance)wouldconveytoareasonablemanisnotthesamethingasthemeaningofitswords.The
meaningofwordsisamatterofdictionariesandgrammarsthemeaningofthedocumentiswhatthepartiesusingthosewordsagainsttherelevant
backgroundwouldreasonablyhaveunderstoodtomean.Thebackgroundmaynotmerelyenablethereasonablemantochoosebetweenthepossible
meaningsofwordswhichareambiguousbuteventoconcludethatthepartiesmust,forwhateverreason,haveusedthewrongwordsorsyntax.46
Therulethatwordsshouldbegiventheirnaturalandordinarymeaningreflectsthecommonsenseofpropositionthatwedonoteasilyacceptthat
peoplehavemadelinguisticmistakes,particularlyinformaldocuments.47
ProblemStudy3:
PerwickSdn.BhdvLeeYenKee(M)SdnBhd1MLJ857
Facts:TheDefendantisthedeveloperwhoappointedthePlaintifftobethemaincontractorforaconstructionoftheproject.ThePlaintiffcontendedthat
ithadbeenagreedbyallpartiesthatthefinalcontractsumwouldbeRM3,035,280.25buttheDefendanthadonlymadepaymentsforRM2,562,800.The
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PlaintiffmadeaclaimforthebalanceofRM467,480.25.TheDefendantdeniedbeingindebtedtotheplaintiffinthesumclaimed.Itcontendedthat:
i. variouspaymentshadbeenmadedirecttotheplaintiff'ssubcontractorswiththeplaintiff'sconsentandapproval
ii. thePlaintiffwasinbreachofthecontractinfailingtocarryoutplasteringworkstotheproject.TheDefendanthadnotifiedthePlaintiffofthebreach
andtheDefendantwasentitledtodeductallsumspaidtoitscontractorsfromthefinalcontractsum.
Issue:Whethersubsequentmeetingcanbeanaidtoconstructionofvariationagreement?
Held:Itisnotlegitimatetouseasanaidintheconstructionofacontractanythingwhichthepartiessaidordidafteritwasmade.TheDefendant
shouldnotbeallowedonasubsequentmeetingtovarythetermsoftheoriginalagreementandscheduleconditionsofthebuildingcontract.
ThecourtcitedJamesMiller&PartnersLtdvWhitworthStreetEstates(Manchester)Ltd[1970]AC583atp603whereLord
Reidsaid:
Imustsaythat...itisnowwellsettledthatitisnotlegitimatetouseasanaidintheconstructionofthecontractanythingwhichthepartiessaid
ordidafteritwasmade.Otherwiseonemighthavetheresultthatacontractmeantonethingthedayitwassigned,butbyreasonofsubsequent
eventsmeantsomethingdifferentamonthorayearlater.48
Conclusion:
Basedonallthecasesreferredabove,itisclearthatthereisaneedforemployerstoensurethatanycontractsandamendmentsareincorporated
correctlyandarenotsimplystatedindocumentsotherthancontractdocuments.Thisistoensurethatthecontractualarrangementsareclearbetween
the parties. It is also important to include a priority of documents clause particularly in building contracts such as what the judge said in Fenice
InvestmentsIncvJerramFalkusConstructionLimitedandOthers[2009]EWHC3272(TCC):
"...theimpressioncansometimesbegiventhatthedraftsmanhasincludedinthecontracteverypieceofpaperinhisofficethatrelated,no
matterhowtangentially,totheprojectinquestion.Someformofhierarchyorprecedenceisvital..."
AlthoughtheEngineeringConstructionContractpublishedbytheNEC(incontrasttotheJCT)doesnotcontainapriorityofdocumentsclause,the
ProjectManagerdoeshavetheabilitytoissueinstructionsfromtimetotimeasnecessarytoresolveanyinconsistenciesorambiguitiesinorbetweenthe
contractdocuments.
Inconclusion,itisimportanttonotethatwhilemanycontractsareenforceablewhenmadeorallyoralcontractswillcausetremendousproblemsif
theyneedtobeenforcedincourt.Inaconstructioncontract,ifthecontractisambiguous,thecourtmaynotbeabletofullyappreciatetheintentionsof
the parties and the conditions they agreed upon in case of dispute. Let us say that a particular construction contract was performed merely on oral
agreementswithjustahandshake.Incaseofdispute,willthepartieshaveanywitnessestobackupwhattheinitialoralagreementwasallabout?Inmost
cases,therewouldntevenbeanywitnesses.Eveniftherewereanywitnesses,theymaynothavethememorytorecallexactlywhattheinitialagreement
was.Soaccordingly,itisimportantfortheagreementtobeinwrittendocumentstobackupthepartiesoralagreements(ifany).Thatiswhytheroleof
lawyersintheconstructionindustryisveryimportant.Theyneedtowritethebestdealfortheirclientssothatifatalltheyendupincourt,theirclients
interestwouldbeprotected.Basically,forthebestinterestofallthepartiesinvolvedinaconstructioncontract,thebestpracticewouldbetoexpressly
statealltheirarrangementsindocumentswhicharelegallybinding.
1.ReferredtoAnthonyMay(Ed),KeatingonBuildingContracts,Sweet&Maxwell,6thEdition,1995,pp1to34
2.ReferredtoAnthonyMay(Ed),KeatingonBuildingContracts,Sweet&Maxwell,6thEdition,1995,p.1
3.ContractsAct1950
8.ReferredtoChowKokFong,lawandPracticeofConstructionContracts,Sweet&Maxwell,3rdEdition,2004,pp26to30
15.SumptervHedges[1898]1Q.B.673
16.SapiahtoonvLimSiewHui[1963]29MLJ305
17.SapiahtoonvLimSiewHui[1963]29MLJ305
18.Building&EstatesLtdvAMConnor[1958]MLJ173
19.HoenigvIsaacs[1952]2AllE.R.176
20.HoenigvIsaacs[1952]2AllE.R.176
21.LightweightConcreteSdnBhdvNirwanaIndahSdnBhd[1995]5MLJ351
23.YongMokHinvUnitedMalayStatesSugarIndustriesLtd[1966]2MLJ286
24.Ming&CovLeongPingChing[1964]30MLJ312
25.Ming&CovLeongPingChing[1964]30MLJ312
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28.HighMark(1984)2BLR129Defines
29.ReferredtoAnthonyMay(Ed),KeatingonBuildingContracts,Sweet&Maxwell,6thEdition,1995,p83
31.WilliamsvFitznaurice(1858)3H&N844
32.WilliamsvFitznaurice(1858)3H&N844
33.BottomsvMayorofYork(1892)referredfromHudsonsBuildingContract4thEditionVolIIp.208
34.IBAvEMIandBICC(1980)14BLR1
35.SimplexPilingvStPancrasBoroughCouncil14BLR80
36.GenerallyReferredtoChowKokFong,lawandPracticeofConstructionContracts,Sweet&Maxwell,3rdEdition,2004andReferredtoAnthonyMay(Ed),
KeatingonBuildingContracts,Sweet&Maxwell,6thEdition,1995
37.Forman&CoProprietaryLtdvTheShipLiddlesdale[1990]AC190,
38.AnthonyMay(Ed),KeatingonBuildingContracts,Sweet&Maxwell,6thEdition,1995,pp12to35
39.Sydenhams(TimberEngineering)LtdvCHGHoldingsLtd[2007]EWHC1129
40.http://www.inhouselawyer.co.uk/index.php/bankingandfinance/7436englishcourtofappealdecisioninrtsflexiblesystemsisareminderofrisksin
commencingworkunderaletterofintent
41.HADGKISS(actingasdelegateoftheEmploymentAdvocate)vBarclayMowlemConstructionLtd.214ALR463
42.TanAhChim&SonsSdn.Bhd.vOoiBeeTat&Anor[1993]3MLJ633
43.CityConnectManagementLimitedvTeliaInternationalCarrierUKandanother[2004]EWHC2357
44.InvestorsCompensationSchemevWestBromwichBuildingSociety[1998]1AllER,
48.PerwickSdn.BhdvLeeYenKee(M)SdnBhd1MLJ857
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