Emerald | International Journal of Law in the Built Environment

Contract interpretation: potential for relaxing the exclusionary rule

Andrew Milner — 2011-10-04 00:00:00.0

Abstract

Purpose – The purpose of this paper is to analyse the practical policy arguments that support the exclusion of pre-contractual negotiations in the interpretation of written contracts, and the more principled arguments for allowing such evidence to be admitted. This paper proposes that the exclusionary rule be relaxed in certain limited circumstances. Design/methodology/approach – The paper adopts a black-letter law approach focusing heavily upon the principles of law itself. It analyses the arguments for and against admitting pre-contractual negotiations in the interpretation of written contracts through examining key court judgments, key journal articles and leading text under English law and other common law jurisdictions. Findings – The findings show that the arguments advanced in support of the exclusionary rule, whilst of great significance, are not that convincing. The arguments for relaxing the exclusionary rule in certain limited circumstances are very strong. Research limitations/implications – Empirical study may show that the arguments in support of the exclusionary rule are not in practice as significant as postulated. The paper is focused on the law of England and Wales. Practical implications – This paper will be instructive to commentators, lawyers, academics and students in the field of commercial contract law and parties to contracts. Originality/value – The paper contributes to pushing back the boundaries of the developing law in the interpretation of written contracts.

Cost benefit analysis approach to global claims

Wayne Edward Lord, Thomas Edward Gray — 2011-10-04 00:00:00.0

Abstract

Purpose – The purpose of this paper is to examine relevant case law governing the failure and/or success of global or rolled-up claims, where it is said to be impractical or impossible to demonstrate the links between certain causes of action and the monetary value to be attached to each. The paper proposes a theoretical framework to improve a claimant's prospects of success in advancing a global claim, not only in circumstances where it may be impractical or impossible to provide a breakdown but also where a cost benefit analysis concludes it is reasonable to do so. Design/methodology/approach – The paper uses traditional doctrinal legal methodology to evaluate judicial statements on the merits of global claims from a number of jurisdictions. The paper also draws on key authorities from the realms of health and safety and professional negligence. Findings – The cases demonstrate attempts by the court to recognise the problems faced by claimants at the end of a construction contract where their total costs exceed the agreed contract price. The comparative success or failure of a global claim depends on the judicial approach to a number of factors including: impossibility, impracticability, conduct of the claimant and defendant, balance between excessive particularity and basic information, the keeping of records, the costs of claim preparation and apportionment. There remains a significant risk of failure of a global claim but the risk can be reduced significantly provided the claimant conducts a defensible cost benefit analysis of the approach taken. Practical implications – A global claim can be used more often provided the rationale behind its presentation forms a logical basis. The cost of litigating complex construction contracts can be reduced significantly if global claims can become the norm rather than the exception, provided the claimant conducts a cost benefit analysis and the court concludes the analysis is reasonable and defensible. Originality/value – Traditional legal theory relies upon the proposition that the claimant must prove that to which he believes he is entitled to such an extent that the defendant's right to know the case it has to meet is satisfied. This paper adds value to the theory by proposing a radical strategy whereby a reasonable claimant can assist the court in finding a factual and logical basis for awarding the whole of a global claim and, where appropriate, by deduction in addition to the principle of apportionment, less than the whole.

A consideration of recovery of prolongation costs in a construction context

Ronan Champion — 2011-10-04 00:00:00.0

Abstract

Purpose – The purpose of this paper is to review the principles for valuation and proof of contractor's claims for additional site overheads arising from delays to completion of construction projects. Design/methodology/approach – An overview of prolongation costs and established principles for recovery is provided. Aspects of recent decisions are analysed critically with respect to proof of delay claims, site overheads and claims for winter working losses. Findings are compared with the established principles. Findings – Some statements in the judgment in Costain v. Haswell [2010] TCLR 1 with respect to requirements for proof of delay claims and for recovery of site overheads depart from established principles. Other elements of the judgment confirm existing principles. The need to distinguish between time- and volume-related costs emerges as critical in valuation of delay-related losses. Practical implications – The need for a claimant to establish proof of delays to completion, and proof of loss, particularly in professional negligence claims, is emphasised. The consequences of failing to establish proof are noted as extending potentially to loss of the entire claim. Originality/value – The paper will help construction practitioners, academics and lawyers understand the potentially far-reaching impact of the principles advocated in recent case law.

Proposal for a “Dual Scheme” model of statutory adjudication for the Australian building and construction industry

Michael C. Brand, Philip Davenport — 2011-10-04 00:00:00.0

Abstract

Purpose – The purpose of this paper is to outline a proposal for a Dual Scheme model of statutory adjudication for the Australian building and construction industry. Design/methodology/approach – The paper deals with the security of payment problem in the Australian construction industry and the legislative response to that problem in New South Wales and elsewhere more generally. The paper highlights deficiencies in current adjudication schemes in Australia and proposes a revised methodology of adjudication by means of the proposed Dual Scheme model. The Dual Scheme is explained in detail and examples are given showing how the Dual Scheme would work in practice. Findings – The Dual Scheme of adjudication allows for adjudication of “progress claims” (just as they are adjudicated now under the “Defined Scheme”), but also provides for separately adjudicated “money claims” in a similar way to that done under the “Non-specific Scheme”. Both parties to a construction contract can take advantage of adjudication under a Non-specific Scheme whilst simultaneously maintaining the relative time and cost benefits of the Defined Scheme in dealing with progress payment claims. Implementation of the proposed Dual Scheme would require new legislation. Originality/value – The Dual Scheme is not a proposal to merely amalgamate two existing models of adjudication in Australia. Rather, it is a Dual Scheme incorporating the philosophy of two disparate systems of adjudication framed in a companionable form. It is hoped that the Dual Scheme may act as a common starting point for eventual agreement between the various interested groups as to what a national scheme of statutory adjudication in Australia will resemble in the future. The Dual Scheme proposal may be of interest in other jurisdictions where statutory adjudication for the construction industry has been introduced or is being contemplated.

New homes and consumer rights: England and Australia compared

Philip Britton, Julian Bailey — 2011-10-04 00:00:00.0

Abstract

Purpose – The purpose of this paper is to contrast consumer laws in England and Australia in relation to residential building projects, and considers how the laws of England may be improved in light of the Australian laws. Design/methodology/approach – The paper reviews consumer laws in both England and Australia, and examines the measures that are in place (or not) to protect consumers who engage builders or purchase a home that contains latent defects. Findings – After comparing the laws of the two countries, the conclusion is made that English law could be improved by imposing regulations on builders, including by mandating the use of written contracts for building work which are required to contain particular terms, requiring builders to be licensed and insured, and by introducing a consumer-friendly form of dispute resolution for home building disputes. Practical implications – The paper recommends that there be law reform in England. Originality/value – The paper provides (so far as the authors are aware) the first comparison of English and Australian consumer laws in relation to residential building work.

Construction law special issue

2011-10-04 00:00:00.0

Special issue on addressing global challenges for a sustainable built environment

2011-10-04 00:00:00.0