Course details

Overview ?

Introduction

Construction projects have a history of contractual disputes and conflict. These problems have reduced the efficiency and profitability of developments, and have not been to the benefit of either clients or contractors. Construction tends to attract contractual problems because of the complex nature of the work and commercial arrangements involved.

The purpose of this course is to help delegates understand the reasons why such problems arise, and how to avoid them in the future. Many contracts are now being conducted in a different way to the traditional approach, with more openness between the parties, and this has, in some cases at least, reduced conflict and increased profitability for all parties.

Course highlights will include:

A review of major issues in construction contracting
An examination of why things so often go wrong
A consideration of ways to improve
Detailed discussion as to how a more collaborative approach might benefit construction projects
Examination of real issues, from real projects

Objectives

Understand how contracts work, and why they sometimes cause problems
Address some specific clauses and provisions that are a common source of problems
Develop thinking around more collaborative approaches to working on construction contracts
Recognise the dangers that such approaches bring, and how to minimise problems
Look at construction contracting in an international context
Understand how to resolve disputes quickly and efficiently

Training Methodology

The course will be delivered using a mixture of trainer-led discussion, using real examples wherever possible, and group exercises to develop new ways of thinking around the whole issue of construction contracts and their associated problems.

Organisational Impact

The course will deliver the following benefits to the organisations to which the delegates belong:

Delegates will have obtained a better understanding of the contractual issues involved in construction contracts
Better communication between commercial and legal personnel
A wider range of possible contracting options
Better ways to resolve disputes
Construction projects will be more successful
Reduced project times and improved profitability

Personal Impact

The course will deliver the following benefits to the delegates:

Better understanding of construction contracts, and the problems that can arise
Deeper appreciation of the main clauses that can cause problems, and how they can be reduced or avoided
Greater choice of methods for contracting for construction projects
Understanding how greater collaboration can, if handled properly, reduce conflict
Better skills and techniques for resolving disputes
Wider skill base, meaning greater scope for career development

SEMINAR OUTLINE

The Fundamentals of Construction Contracts

Why Contracts are Necessary
How Contracts are Formed
Particular issues with Construction Contracts
- Use of Standard Forms
  - FIDIC
  - NEC
  - LOGIC
- Differences in bargaining positions
- Problems with competitive tendering
- Problems with different industries
- And different regions/countries
Issues with different Legal Systems

Some major problem clauses in Construction Contracts

Design Responsibility
- Requiring contractors to warrant the design of others
Standard of work
- Fitness for purpose
- International/National/Company standards
- Standards for Professional Services
Variations
- Time
- Money
Force Majeure
Intellectual Property
Limits of Liability
Indemnities
Insurance
Some minor problems:
- Notices
- Entire Agreement
- Incorporation by Reference

Traditional Approaches to Construction Contracts

Lump Sum/Fixed Price
Bill of Quantities/Schedule of Rates
Adding incentive fees
Escalation
- Dealing with general price inflation
Economic Price Adjustment
- Problems with volatile materials (or labour) markets
- Selecting the right index
Call-off Contracts

Looking beyond the traditional approaches

Risk and Reward Structures
Build Operate Transfer (and similar models)
Open Book Approaches
Collaborative Working
- Advantages
- Dangers – and how to avoid them
This session will involve delegates in developing their own ideas as to different ways in which construction contracts could be structured, so that commercial drivers are focused on the goals of the parties, not on conflict

Disputes – Avoidance and Resolution

How disputes arise

Methods to avoid disputes, or deal with them quickly as they arise
Negotiation techniques
Traditional third party approaches
Courts (litigation)
Arbitration
Adjudication
Some Alternative Approaches
Mediation
Conciliation
Early Neutral Evaluation
Expert determination
Dispute Review Boards and similar arrangements
Pendulum arbitration
Mini-arbitration
Final questions and wrap-up

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Day 2

Day 3

Day 4

Day 5

Training Methodology

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