Riyadh | KSA | Hotels | Commercial Management | Contract Administration | FIDIC Contracts | APC Mentor
If Van Elle's quotation had been made part of the contract, I would imagine that Van Elle would have won the case. It is also essential to ensure that the draft contract provided to the parties to agree/sign reflects the same terms and conditions agreed upon. If there is a deviation, it should be resolved, and the draft should be changed accordingly before the contract is executed. This will help to avoid disputes in the event of a problem.
🍁🇨🇦🇸🇦🇦🇪 | Projects Director | Construction Management | Project & Program Management | Integrated Project Delivery | Strategy & Innovation
🔸The contract/subcontract terms incorporated in the executed construction contract would supersede any pre-negotiated terms that could exist or could be presented in various forms/approaches. 🔸Ensure incorporating any pre-negotiated terms, or any special provisions or clauses in the final executed contract. 🔸”Balfour Beatty Regional Construction Limited vs. Van Elle Ltd [2021], Balfour Beatty Regional Construction Limited (“Balfour Beatty”) vs. Van Elle Ltd (“Van Elle”), a sub-contract was found to cover works carried out by a sub-contractor, even though it was unsigned at the time the works were carried out. 🔷Background The Claimant in this case, Balfour Beatty, was engaged as a main contractor for a construction project at a site in Newcastle (“the Site”). Balfour Beatty was to design and construct a sub-sea cable manufacturing facility at the Site. The work to be completed by Balfour Beatty required a considerable amount of foundational piling. Balfour Beatty engaged a sub-contractor in respect of the foundational piling, Van Elle, the Defendant in this case. A distinct element of the works known as “the Northern Carousel” was carried out by Van Elle prior to the parties signing a formal sub-contract (based on one of the JCT standard form contracts). Shortly after installation excessive settlement was discovered and extensive remedial works were required. Balfour Beatty raised a claim against Van Elle to recover the remedial costs and for an indemnity from Van Elle for any liability that maybe due from Balfour Beatty to the Employer. Van Elle argued that the works to the Northern Carousel were carried out before the parties signed the formal sub-contract and the contract between the parties was therefore set out in a written quotation that Van Elle had sent to Balfour Beatty sometime earlier. Van Elle argued Balfour Beatty accepted the earlier quotation by permitting Van Elle to commence work at the Site. The quote provided by Van Elle incorporated Van Elle’s standard terms of business. This was important because those standard terms of business contained several possible limitations of liability for Van Elle. 🔷Court decision The Judge found that the formal sub-contract governed all the works, even those to the North Carousel that were carried out before the parties signed the formal sub-contract. Although his comments were not binding, the Judge also considered and commented upon the various limitations Van Elle sought to make in their standard terms of business. 🔷Take away Construction companies should take particular care at the outset of a construction project to determine the terms upon which work is carried out and should consider looking at their standard terms in relation to limitation in light of the Judge’s comments.” RSS: Girlings #constructionmanagement #riskmanagement #constructioncontracts #constructionlaw #contractadministration #disputeresolution #claimsmanagement #disputemanagement
