LAW

Contracts & Procurements

Contracts & Procurements

Introduction

The Heriot Watt University wants to undertake a new project at its Malaysia campus. The university wants to build a Postgraduate Accommodation and Outreach Centre for its students in Malaysia. The estimated cost of the project is £100 million. The aim of this project is to provide 2100 students of post graduate level, a state-of-the-art accommodation, and also an outreach centre, which can enable the university to impart teaching, conduct activities, and provide students with ongoing courses for professional development. This paper describes an NEC3 ECC contract and provides with professional advice to the Principal of the Heriot Watt University, regarding issues that can occur after the contract is made.

General principle of law governing construction contracts

The contract law has many general principles that also influence construction contracts. However, for making a construction project successful, it is imperial that the construction contract is designed, keeping in view certain specifications. It is important to ensure that a project is completed within the specified time, allocated budget, and other physical efforts. Furthermore, as there are chances of many contingencies to arise while the project is in progress, it is imperial that all contingencies such as possible delays, shortage of materials, and errors requiring rectification are considered while the project is drafted. The chances of contingencies are higher if the project is a large one. Hence, it is immensely important that a construction contract clearly provides all the necessary detailed about aspects such as the breaches that would involve financial compensation. It should also specify details about the aspects that would lead to a breach of contract leading to cancellation of a contract. The general principles of contract law that are applicable on construction laws include Unfair Terms in Consumer Contracts Regulations (1999) and Unfair Contract Terms Act (1977). It is important that all the laws and the use of arbitration and contingency clauses are taken into consideration while designing a contract (www.contactlaw.co.uk).

According to the core clause 12.2, construction contracts are governed by law of contracts. According to this, all data should be provided by employers. An important principle in contact laws is that all the agreements made should be observed. In some countries, it is associated with private law of contracts while, in some countries, it is considered as a principle to demonstrate good faith during the execution of the contract made between the parties. Courts usually consider it as an important aspect and require that all the contracts made are fulfilled. It implies that the language used for making the contract is understandable by the parties. All the words of the contract should be very clear to read and understand. The language should be well understood. Making a contract with old clause will make it very important as amendments can affect it. NEC3 is a contract that is very clear to form and understand. It is not cluttered by the use of different languages and clearly specifies all the laws that govern ...