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Construction Contracts in Context

Project description
The following guidelines should be strictly adhered to:

1. All propositions of law referred to in the legal problem question – see section A of the assignment below – should be supported by an appropriate reference to a

case or statute or, in the case of a reference to a standard form of building contract such as the JCT Standard Building Contract with Quantities 2011, by an

appropriate reference to the relevant contract.

2. The minimum and maximum word limits for each component of the assignment appear at the end of the relevant section of the assignment. These limits should be adhered

to, otherwise the student will be penalised. Each submission should include a word count.

3. Footnotes/endnotes should be included in the essay. A bibliography should appear at the end of the essay. The bibliography should contain all relevant material

consulted by the student, whether referred to in footnotes or not and material in the bibliography should be arranged under the following headings, where applicable:

Legislation
Case Law
Internet resources
Other resources

Words in footnotes and bibliography should not be included when taking into account the essay word count.


Referencing Requirements:
The following guidelines should be strictly adhered to:

1. All propositions of law referred to in the legal problem question – see section A of the assignment below – should be supported by an appropriate reference to a

case or statute or, in the case of a reference to a standard form of building contract such as the JCT Standard Building Contract with Quantities 2011, by an

appropriate reference to the relevant contract.

2. The minimum and maximum word limits for each component of the assignment appear at the end of the relevant section of the assignment. These limits should be adhered

to, otherwise the student will be penalised. Each submission should include a word count.

3. Footnotes/endnotes should be included in the essay. A bibliography should appear at the end of the essay. The bibliography should contain all relevant material

consulted by the student, whether referred to in footnotes or not and material in the bibliography should be arranged under the following headings, where applicable:

Legislation
Case Law
Internet resources
Other resources

Words in footnotes and bibliography should not be included when taking into account the essay word count.

The weighting as between the legal problem question and the essay is 50:50.

The following guidelines should be strictly adhered to:

1.    All propositions of law referred to in the legal problem question – see section A of the assignment below – should be supported by an appropriate reference to

a case or statute or, in the case of a reference to a standard form of building contract such as the JCT Standard Building Contract with Quantities 2011, by an

appropriate reference to the relevant contract.

2.    The minimum and maximum word limits for each component of the assignment appear at the end of the relevant section of the assignment. These limits should be

adhered to, otherwise the student will be penalised. Each submission should include a word count.

3.    Footnotes/endnotes should be included in the essay. A bibliography should appear at the end of the essay. The bibliography should contain all relevant material

consulted by the student, whether referred to in footnotes or not and material in the bibliography should be arranged under the following headings, where applicable:

Legislation
Case Law
Internet resources
Other resources

Words in footnotes and bibliography should not be included when taking into account the essay word count.

4.    Footnotes/endnotes must be used for referencing and further reading only and should contain as little text as possible.

5.    Any deviation from the above guidelines will be penalised, either by a zero score or a lower mark.

Coursework Assignment

Section A
Legal Problem

In a recent corporate takeover, Hoover‘EmUp PLC (‘Hoover’) has bought out the shares of a medium-sized construction company, SkyHigh Projects Limited (‘SkyHigh’).

During the course of the due diligence exercise conducted by Hoover’s lawyers it emerges that there are deficiencies in the wording of various items of construction

documentation. Hoover decides just to take a commercial view in relation to the documentary shortcomings not seeing this as a deal-breaker in the overall context. So

Hoover proceeds with the acquisition regardless.

That decision comes back to haunt Hoover, however, because design defects are subsequently discovered in an office development with which SkyHigh was involved as

contractor prior to the takeover. The defects in question could be regarded as having been ‘latent’ at the time of the takeover. But it becomes increasingly evident

that these are potentially serious structural defects which could prove costly to put right. At this stage, though, no one has actually sustained any loss.

Very soon a number of parties with an interest in the completed development begin to express concern at the developing situation.  The interested parties, who include

the original developer who was the Employer under the construction contract, look to Hoover to carry out remedial structural improvements to the development on the

basis that, under the design and build contract and a number of collateral warranties and similar legal arrangements that were in place, Hoover undertook overall

responsibility for design to the original developer, to funders, to occupational tenants and to others.

It quickly emerges that before SkyHigh first became involved in the project some preliminary design work was carried out by a firm of consulting engineers –

PrimeDesign Partnership (‘PrimeDesign’) – and it is now acknowledged that the structural defects which have come to light derive from design flaws for which

PrimeDesign was responsible.

Hoover has no comeback against the vendor of SkyHigh under the share purchase agreement having accepted the construction documentation, shortcomings and all. So

Hoover, and SkyHigh acting in respect of its own immediate interests, look to a novation agreement entered into among the project developer and PrimeDesign and

SkyHigh. The intention of the novation agreement was to ensure that PrimeDesign continued to have responsibility to SkyHigh in respect of PrimeDesign’s early design

input as if PrimeDesign had originally contracted under the appointment agreement with SkyHigh and not the project developer. SkyHigh now wishes to investigate whether

PrimeDesign can be made to shoulder all, or at least some, of the responsibility for the potentially costly design flaws. Attention naturally focuses on key provisions

of the novation agreement.

One important provision is in the following terms. (This has been annotated to aid comprehension.)
“The liability1 of the Consultant2 under the Appointment3 whether accruing before or after the date of this Novation shall be to the Contractor4, and the Consultant5

agrees to perform the Appointment and to be bound by the terms of the Appointment in all respects as if the Contractor6 had always been named as a party to the

Appointment in place of the Employer7.”
1.    i.e. liability in respect of the application of professional skill, care and diligence in executing design of the project under the Appointment
2.    i.e. PrimeDesign
3.    i.e. the Appointment between PrimeDesign and the original developer, the Employer under the construction contract
4.    i.e. SkyHigh
5.    i.e. PrimeDesign
6.    i.e. SkyHigh
7.    i.e. the original developer
In correspondence between solicitors acting respectively for PrimeDesign and SkyHigh, PrimeDesign denies that it now has any responsibility for the relevant design

flaws, or for putting right structural defects, in the office development.
Question A

Taking into account all relevant case law, and with a view to advising SkyHigh, analyse the legal and contractual issues arising in this problem scenario – including

the possible legal effect of (among other things) the clause from the novation agreement reproduced above – and give a reasoned opinion as to whether SkyHigh can

legally hold PrimeDesign liable in respect of the design flaws, and for putting right the resulting structural defects, in the office development.

(In the course of your answer it may be necessary to speculate or hypothesise about the existence, and effect, of other contractual arrangements not specifically

mentioned, or not mentioned in any detail, in the problem scenario.)

Question B

In order to strengthen and protect the legal and contractual position of the contractor in a situation such as outlined in this problem scenario, suggest – with an

appropriate explanatory commentary in each case and making reference to the applicable case law – ways in which the wording of a novation agreement could be drafted

and/or amended and whether additional protections could be incorporated into other contractual arrangements (such as in the construction contract between the

contractor and the developer/employer).

Minimum word limit for Section A Legal Problem – 2,000 words
Maximum word limit for Section A Legal Problem – 2,200 words

Section B
Essay Topic

The 2011 edition of JCT standard building contracts did not significantly innovate upon the 2005 edition with the result that the JCT 2011 contracts are in most

material respects essentially the same as the JCT 2005 contracts. There were, however, more significant (including substantive) changes introduced in the transition

between JCT 98 and JCT 2005.

Describe and identify what you regard to be the most important of these changes addressing, by way of a critical discussion, the question of whether you agree that,

overall, the JCT 2005 contracts might be regarded as significantly improving upon the content and format of the JCT 98 contracts.

(The discussion should include some consideration of whether the removal of the nominated sub-contractor mechanism has necessarily been a positive development.)

Minimum word limit for Section B Essay Topic – 1,500 words
Maximum word limit for Section B Essay Topic – 2,000 words

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Category: Uncategorized

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