2-DAY NATIONAL WORKSHOP ON ESSENTIALS OF BUILDING AND ENGINEERING
CONTRACT DOCUMENTATION AND ADMINISTRATION
Date: 22nd – 23rd MARCH, 2017
VENUE: KOLA NUT EVENT CENTRE, BARRACK ROAD, CALABAR
TOPIC: COMPARATIVE EVALUATION OF DIFFERENT FORRMS OF
CONTRACT &
DISCHARGE OF CONTRACTS
By
EKKANEM, SCHOLASTICA FIDELIS (MNIQS, RQS)
Department of Quantity Surveying
School of Environmental Studies, Akwa Ibom State Polytechnic, Ikot Osurua, Ikot Ekpene, Akwa Ibom
State
COMMON FEATURES IN ALL THE FORMS OF CONTRACT
















QUALITY CONTROL
VARIATION
TIME AND MONEY
PRACTICAL COMPLETION AND SNAGING
COST SCRUTINY
THE PROGRAMME
PROVISION SUMS
PAYMENT
MATURITY AND CASE PRECEDENCE
ADMINISTRATIVE REQUIREMENT
EXTENSION OF TIME/ LOSS AND EXPENSE
TERMINOLOGY
CLAUSES NATURE
PRICING OPTIONS
DISPUTE RESOLUTION
RISK MANAGEMENT
CONTRACT ADMINISTRATION COMPARISON EVALUATION –
(FIDIC, NEC3 AND JCT 2011)
JCT Contract
NEC Project Manager
FIDIC Engineer
Administrator
Quality Control
 Issues timely
 Acts as gatekeeper to contractor’s  Issues instructions, modified drawings
information relating to
design and programme (conditions
as necessary for the execution of the
set out any other pre21.23),
works and the remedying of any defects
agreed information as  Replies within the period for reply
(clause 3.3)
and when required
to any communication submitted to
it by the contractor
 May attend management meetings with
 Issues certificates to the employer
the contractor
and contractor
JCT Contract
NEC Project Manager
FIDIC Engineer
Administrator
Variations
 Issues instruction to
 Issues instruction relating to
 Issues instructions to deal with
overcome discrepancies changes in scope and
instances of delay and
and/or changes in scope completion date
disruption, remedying of defects
of works
and instructing any variation.
 Issues notices in respect  Actively monitors by means of  Requests measurement of the
of remedying
any early warning mechanism
works, if required (clause 2.1)
discrepancies between
for any change to scope in
contract documents
price, timings or impairment of  Issues variations (clause 13.1)
(clauses 2, 13-2.18)
performance
and payment certificates (clauses
14.6, 14.11 and 14.13)
JCT Contract Administrator
Time and Money
 Certifies sum due
 Issues extensions of time which it
considers fair and reasonable and
reaches a decision as soon as
reasonably practical (clause 2,28.2)
 Considers with the QS, if employed,
all interim valuations, claims for
variations and loss/expense resulting
and issue payment certificates as
appropriate
NEC Project Manager
FIDIC Engineer
 Certifies sums due
 Certifies sums due
 Decides the date of completion
and certifying completion
(condition 30)
 Notifies the contractor of the
outcome for any claim and
requests quotations for any
proposed instruction or changed
decision
 Agrees to commencement date,
and ensure the programme for
the works is adhered to (clause
8.1),
 Considers compensation events,
their value and instructing their
implementation (conditions 6065)
 Approved variations for
payment after scrutiny (clause
13.1).
 determine extension of time
for the contractor (clause 8.4),
JCT Contract Administrator
NEC Project Manager
FIDIC Engineer
Practical completion and snagging
 Determines when practical completion  Determines when practical
achieved and issues notices of noncompletion achieved
completion, defects and can allow early
possession.
 Issues practical completion certificate  Assesses defects and their
or sectional completion certificates
value (conditions 40-45)
(clause 2.30-2.32) or a non-completion
certificate (clause 2.31)
 Responsible for the ‘taking over’
process for completion of the works
or sections of it.
 Assesses the time for, and issues a
taking over certificate upon
application from the contractor
(clause 10.1)
JCT Contract
Administrator
Cost Scrutiny
 In JCT contract there may
be some cost scrutiny via
the contract sum analysis
and tender negotiations
The Programme
 The JCT contract does not
have a programme as a
contractual document.
 Peripheral importance
NEC Project Manager
FIDIC Engineer
 NEC contract has an open book
 In FIDIC contract there may be some
procedure with the key concepts of cost scrutiny via the contract sum
defined cost and disallowed cost
analysis and tender negotiations
 The programme is at the heart of
the NEC ethos. It is a contractual
document and to be regularly
updated.
 Key to the function of contract
mechanisms
 The FIDIC contract does not have a
programme as a contractual
document.
 Peripheral importance
JCT Contract
NEC Project Manager
FIDIC Engineer
Administrator
Provisional Sums
 The JCT Contract
 NEC contract does not FIDIC Contract contains
contains Provisional
Provisional sums
sums
Payment
 In relation to payment,  In relation to NEC
In relation to FIDIC
the JCT contract
contract, it is located in 3 contract, contract price and
payment section is clear, different location in
payment is in one section
is all in one section
clause 5, Y(UK) and
(clause 14).
(clause 4) and easy to
contract Data part 1
follow
JCT Contract Administrator NEC Project Manager
Maturity & Case Precedence
FIDIC Engineer
Very matured, over 80 years Over 20 years in use,
Very matured, over 100
with many precedence cases limited cases precedence years with many
in law
in law
precedence cases in law
Administrative Requirement
Minimum
High, requires parties to Minimum
document extensive
amount of written
communication
JCT Contract Administrator
Extension of Time/loss and expense
• the JCT contract has relevant
matters and time and money are
dealt with as separate concepts
(Clauses 2.29 and 4.24)
NEC Project Manager
FIDIC Engineer
 The NEC contract has the
compensation event and it
deals with both time and
money.
Driven: The compensation
events also have a
condition procedure nature,
and failure to notify the
compensation event within
the 8 weeks period can
have dire consequences
 FIDIC contract has
relevant matters and time
and money are dealt with
as separate concepts.
(Clauses 8.4 and 20.1)
JCT Contract
Administrator
Terminology
Legal
Clauses Nature
Adversarial
NEC Project Manager
FIDIC Engineer
Simple wording
Legal
collaborative
Adversarial
Pricing Options
Limited to traditional norms 6 options, can be used together
Limited to traditional norms
Dispute resolution
Arbitration
Adjudication
Dispute adjudication boards
High awareness of risk, requires
parties to register risks officially
Limited
Risk Management
Limited
SUMMARY
NEC has probably may advantage our FIDIC and JCT particularly
in clarity, flexibility, explicit project management procedures,
partnering and teamwork, risk management, objective
measurements of weather and ground condition risks and
variations.
Key NEC drafty features centre on flexibility, clarity and
simplicity; and a stimulus to good management; no such aims exist
within FIDIC and JCT.
DISCHARGE OF CONTRACTS
A contract may be discharged by the following methods:
 Performance,
 Agreement,
 Breach
 Frustration
PRFORMANCE
• The normal method of discharge mean that the performance of
his obligations by a contracting party discharges that party from
his obligations under the contract.
Modification of the General Rule under performance
discharges
(a) Divisible Contracts: A contract may be entire, where the
agreement provides that complete performance by one party is a
condition precedent to contractual liability on the part of the
other party; or, partial, where the contract provides for
performance by instalments, with separate payment for each of
them.
(b) Acceptance of Partial Performance
Where the party to whom the promise of performance was
made, B, accepts partial performance of the contract by A,
he must pay A for the goods he has accepted or the benefit
of which he has received. However, B must have
voluntarily accepted A’s partial performance (example the
case of Sumpter v Hedges [1898] 1 QB 673, where the
owner of halfbuilt stables was held not to have had any
choice but to finish the building work).
(C)Completion of Performance Prevented by the
Promisee
 Where full and complete performance of the
contract is prevented through the other party’s
actions, the party unable to complete performance
may claim for partial or substantial performance. In
a case of Planché v Colburn (1831) 8 Bing 14, an
author succeeded in recovering half his commission
on a book he had half completed, after the publisher
prematurely terminated the contract.
AGREEMENT
 Where a contract is formed by agreement, it may also be discharged or
terminated through agreement, subject to the conditions of the
contract.
• The agreement to extinguish or terminate the contract itself becomes a
binding contract if supported by consideration or made under seal.
Contract by agreement can be discharges through the following
ways:
 Bilateral Discharge The contract will be mutually discharged where
the parties agree to release one another from any further obligations
existing from the original contract.
Also the contract is discharged despite the parties failing to fully or
partially discharge all their obligations.
 Accord and Satisfaction
Accord and satisfaction occurs where one party accords the release of
another party, who is in breach of the original agreement, from its
obligations in return for the satisfaction for the performance of another
obligation.
Unilateral Discharge
Unilateral discharge occurs where one party has completed its part of the
bargain and agrees to release the other party from its outstanding obligations
under the contract. The agreement is only binding if supported by
consideration or made under seal.
DISCHARGE BY BREACH
• Discharge By Breach: Any breach of contract entitles the
injured party to claim damages. The degree of breach and the
consequences vary according to the type and nature of the term
concerned. There are two types of breach: actual and
anticipatory.
Actual Breach One party may breach one or more of the terms of
the contract in such a way that it amounts to a breach of the
contract.
Anticipatory Breach An anticipatory breach occurs where a
contracting party indicates by express words or by implication
through conduct before performance that he will not honour his
contractual obligations.
FRUSTRATION
• FRUSTRATION : A contract is said to be frustrated where the conditions
of the contract can no longer be performed, due to a change in
circumstances not provided for in the contract, which occurs after the
contract was concluded, and which was beyond the fault of the parties to
the contract.
• EXAMPLE ARE:
 Destruction of the Specific Object Essential for Performance of the
Contract.
 Personal Incapacity to Perform a Contract of Personal Service.
 The Non-occurrence of a Specified Event.
 Interruption which Prevents Performance of the Contract in the form
Intended by the Parties.
FORCE MAJEURE
• FORCE MAJEURE:“Force majeure” is a concept that originated in
French, not English, law, and is not a doctrine under common law.
However, force majeure does have legal effect where provided for
in English law-governed contracts (and no effect without the
existence of such a clause in the contract).
“Force majeure” literally translates as “superior forces” and refers to
the arising of unforeseen conditions or events beyond the control of
both parties, which unavoidably disrupts performance of the
contract.
• Force majeure clauses are used in contracts due to the limited
application of the doctrine of frustration.
CONCLUSION
Discharge of contract depend on the forms of contract of your
choice and the documentation format, therefore having known
various forms of contract and methods of documentation it is
therefore proper to choose the one that fit your contract for
effective delivering.
THANK YOU