No Oral Modification Clauses Mean What They Say
Will an oral agreement override a written one that expressly prohibits oral modification? No. The UK Supreme Court in Rock Advertising Ltd - v - MWB Business Exchange Centres Ltd[1] brings welcome clarification to the English common law on “no oral modification” (NOM) clauses. The courts will now uphold them.
No EOT for Concurrent Delay, if so Agreed
Contract clauses that deny a contractor entitlement to an extension of time for concurrent delays caused by both employer and contractor are valid in principle. In North Midland Building Ltd -V- Cyden Homes Ltd [1] the Court of Appeal of England and Wales has ruled that such clauses do not offend the common law prevention principle. Nor do they give rise to an implied term to prohibit the imposition of delay damages that may result.
The Highest UK Court Reviews The Law On Penalties
A penalty is now to be regarded as: “a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation.” The UK Supreme Court has reviewed the English law of penalties and re-formulated the test in a landmark judgment on two unrelated appeals heard together: (1) Cavendish Square Holding BV – v – Talal El Makdessi (“Cavendish”); and (2) ParkingEye Ltd – v – Beavis ("Beavis").
FIDIC’S procedures for the appointment of a DAB need improvement
If the parties to a FIDIC contract cannot agree on a suitable DAB member and they have selected FIDIC as their appointing entity, they may request FIDIC to appoint that DAB member. FIDIC’s present procedures however seem less than ideal. They increase the prospect of rejection of the candidate nominated by FIDIC in the first instance and so also the need to repeat the exercise. They could also result in an appointment unacceptable to one or both parties. In my view they need to be revised.
BoQ rates neither ‘immutable nor sacrosanct’
A contractor who has loaded a tender BoQ rate in the expectation of a windfall will be interested to learn that recent guidance from the Hong Kong Court of Appeal supports the engineer’s request for evidence of the original tender build up and, among other things, will disallow all loading if substantial differences in actual quantities would make it reasonable to do so under the contract. This article explores that new guidance which finds contract rates to be neither immutable nor sacrosanct in such circumstances.
