WHAT IS CONSTRUCTION LAW?

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WHAT IS CONSTRUCTION LAW?

It is a specialised branch of contract law, and it focusses on establishing and administering the construction contract.

Construction law also governs the relationships between the:

• Employer and the contractor;
• Employer and the agent;
• Contractor and sub-contractors

DO YOU KNOW THE DIFFERENT CONTRACTS USED IN THE INDUSTRY?

There are 4 main contracts used in the construction industry:

• JBCC (Joint Building Contracts Committee)
• GCC ( General Conditions of Contract
• FIDIC (Fédération Internationale De Ingéniers-Conseils)
• NEC (New Engineering Contract)

JBCC

JBCC is a committee drawn from its current 9 constituent members, namely:

  1. Association of Construction Project Managers (ACPM)
  2. Association of South African Quantity Surveyors (ASAQS)
  3. Master Builders South Africa (MBSA)
  4. South African Black Technical and Allied Careers Organisation (SABTACO)
  5. South African Institute of Architects (SAIA)
  6. South African Institute of Landscape Architects (SALI)
  7. South African Association of Consulting Engineers (SAACE)
  8. South Arican Property Owners Association (SAPOA)
  9. Specialist Engineering Contractors Committee (SECC)

JBCC suite’s principal features are:

Government Contracts: The suite has been designed to take the specific needs of the State into account. These have alternatives regarding aspects such as insurance provisions, securities, and dispute resolution.

Standardisation: The documents have been generated from the Principal Building Agreement master. It ensures consistency of language, definitions, layout, etc.

Simplification: “Principal Agent” concept has been introduced. The Principal Building Agreement now caters for “with Bills of Quantities” or “without Bills of Quantities” usage.

Implementation guides: 2 guides have been published to assist users in the implementation of the JBCC contract.

Schedule of Variables: It has been replaced by separate contract data documents to bring it in line with most modern standard agreements.

Contractual periods and dates: All the contractual milestones from site handover to settlement of the final account are included in the various documents.

Security: 2 forms of security are catered for, namely variable construction guarantee, and a fixed construction guarantee with payment reduction.

Advance payment provision: To assist the contractor or the nominated/selected subcontractor in their cashflow when needed.

GCC

General Conditions of Contract states that the Contractor’s time risk allowance must be indicated on the Programme of Works.

A contractor is permitted to suspend works if the employer fails to make a payment on a payment certificate, and includes delay and cost due to excepted risks (e.g. electricity cuts and strikes).

FIDIC

Fédération Internationale De Ingéniers-Conseils is the international federation of national member associations of consulting engineers.

The objectives of the federation are to promote in common the professional interests of the member associations and to disseminate information of interest to their members.

FIDIC publishes international standard forms of contracts for works and agreements, together with related materials such as pre-qualification forms.

Standard Form Contracts:

  1. Short Form (green book)
  2. Construction (red book)
  3. Plant and Design build (yellow book)
  4. EPC/Turnkey projects (silver book)
  5. Design
  6. Build and operate

Agreements for:

a. Clients
b. Consultants
c. Sub-consultants
d. Joint ventures
e. Representatives

NEC

New Engineering Contract – Engineering Construction Contract

It is a formalised system created by the Institution of Civil Engineers (UK) that guides the drafting of documents on civil engineering and construction projects to obtain tenders, awarding and administering contracts. It legally defines the responsibilities and duties of the employers (clients) and contractors in the Works Information (Scope).

The contract consists of 2 parts:

• Contract Data part 1 (data provided by the Employer/client); and
• Contract Data part 2 (data provided by the Contractor)

Why would one use the NEC?
It allows for great flexibility in public and private sectors and it is easy to apportion design responsibility.

WHO ARE THE PROFESSIONAL CONSULTANTS?

The professional consultants include:

• Architect;
• Quantity surveyor;
• Health & safety agents;
• Engineers, consisting of electrical-, civil-, structural- and chemical engineers;
• Project managers;
• Fire consultant;
• Legal consultant

Professional consultants must participate in:

• Inspections of the work, and
• Drawing up of the defects list

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