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PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
BY  A  POACHER  TURNED  GAMEKEEPER
STEPHEN  TENNANT,  Director  -­ Plus  Three  Consultants  (HK)  Ltd
CONTRACTS,  DISPUTES,
ETHICS  AND ARCHITECTS
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
Today’s Discussion
• Contracts
– Who needs them?
• Disputes
– Origins and effect of Change.
• Ethics and Architects
– Duties and Liabilities.
• Crystal Ball Gazing
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Why do we need Contracts?
• To provide a
description of
responsibilities.
• Bind parties to their
duties.
• Establish a time
frame for duties.
• To secure payment.
• To provide recourse
when the relationship
falters.
• Best to be in writing,
but oral contract can
be valid!
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
Where do Disputes come from?
Change!!!
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Change?
• Revised/New
Drawings.
• Revised/New
Specifications.
• Revised/New
Timings.
• Revised/New
Requirements.
• Changed Law/
Regulations.
• Changed Weather.
• Changed Economy.
• Changed Labour
Situation.
• Changed
Expectations.
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
How does the Contract
Address Change?
• Does the Change
fall within the scope
of the Variation
Clauses?
• Does the Change fall
within the scope of
the Claims Clauses?
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
What are the Architect’s
primary duties?
• Design the Project,
or approve the
Design for the
Project.
• Administer the
Contract.
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
How does the Architect
undertake his duties?
Rule 3.2
A member shall inform
his client in advance of
the Conditions in the
HKIA Agreement and
shall agree with his
client that those
Conditions shall be the
basis of his appointment.
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
How does the Architect
undertake his duties?
Rule 1.3
A Member shall act
impartially in all cases
in which he is acting
between parties, and
shall interpret the
conditions of a building
contract with fairness.
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Impartiality and the Architect
• How do you tell the
client you got it
wrong?
• Should I give the
client a draft of my
award for approval
comment?
• Its OK to do what the
client says, isn’t it?
Reality Check
• Who pays the
Architect’s Fees?
• Who gives the
Architect more
work?
• Who is in charge of
the Design?
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Fairness and the Architect
• Architect not a party
to Contract (privity of
contract!).
• Architect cannot
change or ignore
terms of Contract.
• Who is the Architect
liable to?
Reality Check
• Are Contracts fair?
• Should the Contract
be fair?
• Apply a fair
Contract unfairly?
• Apply an unfair
Contract fairly?
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Who is the Architect Liable to?
Third Parties
• Liability in Tort (duty
of care).
• If acts or omissions
cause loss and
damage to “other”
person or “other”
property.
• Subsequent
purchasers?
His Client
• Express terms under
Contract.
• Implied terms under
law.
– e.g. reasonable skill
and care
– Higher standard if
employed by
Contractor under
D&C Contract
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Architect Liable to Contractor?
• No privity of contract.
• Act /omission of Architect can
adversely affect Contractor directly.
• It WAS the law that an Architect does
not owe duty of care (liability under
tort) to Contractor in issuing
certificates.
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Architect Liable to Contractor?
• In 21st Century, law continues to
develop, and change!
• Some Courts now considering liability
of Architect to Contractor as certifier.
• Architect has been found, in some
cases, as certifier, to owe duty of care
to Contractor.
• Developing area of law!
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Liability from BIM?
• Multiple parties inputting into model.
• Who owns the model?
• Are you jointly and severally liable
(Only 20% to blame but 100% liable!)?
• Absence of case law, at the moment!
• Does your PI Insurance respond?
PLANNING
PROJECT  CONTROL
FINAL  ACCOUNT
CONTRACT  CLAIM
ARBITRATION
EXPERT  WITNESS
www.plus3.com.my
COMMERCIAL
CONTRACT  MANAGEMENT
www.plus3.com.my
Architects and the Future?
• More complex projects.
• Increased liabilities for Architects.
• You look after your client.
But who looks after You?
n Preliminary  Claim  Evaluation  Report
n Technical  Issue  Analysis
n Schedule  and  Delay  Analysis
n Loss  of  Productivity,  Acceleration  and  Out  Of  
Sequence  Work  Analysis
n Damages  Quantification
n Defective  Plans  and  Specifications  Analysis
n Claims  Avoidance
n Quantum  &  Delay  Expert  Reports
n Change  Order/Claims  Evaluation,  Preparation  
and  Negotiation  
n Mediation
n Documents  Discovery
n Litigation  Support
n Exhibits  Preparation
n Expert  Witness  Testimony
n Project  Management  and  Contract  Management
www.plus3.com.my
PLUS    THREE    CONSULTANTS
Contractual  &  Commercial  Services  For  Construction,  Infrastructure and  Oil  &  Gas
Thank  You

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20150818 L&O

  • 1. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT BY  A  POACHER  TURNED  GAMEKEEPER STEPHEN  TENNANT,  Director  -­ Plus  Three  Consultants  (HK)  Ltd CONTRACTS,  DISPUTES, ETHICS  AND ARCHITECTS
  • 2. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT Today’s Discussion • Contracts – Who needs them? • Disputes – Origins and effect of Change. • Ethics and Architects – Duties and Liabilities. • Crystal Ball Gazing
  • 3. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Why do we need Contracts? • To provide a description of responsibilities. • Bind parties to their duties. • Establish a time frame for duties. • To secure payment. • To provide recourse when the relationship falters. • Best to be in writing, but oral contract can be valid!
  • 4. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT Where do Disputes come from? Change!!!
  • 5. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Change? • Revised/New Drawings. • Revised/New Specifications. • Revised/New Timings. • Revised/New Requirements. • Changed Law/ Regulations. • Changed Weather. • Changed Economy. • Changed Labour Situation. • Changed Expectations.
  • 6. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my How does the Contract Address Change? • Does the Change fall within the scope of the Variation Clauses? • Does the Change fall within the scope of the Claims Clauses?
  • 7. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my What are the Architect’s primary duties? • Design the Project, or approve the Design for the Project. • Administer the Contract.
  • 8. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my How does the Architect undertake his duties? Rule 3.2 A member shall inform his client in advance of the Conditions in the HKIA Agreement and shall agree with his client that those Conditions shall be the basis of his appointment.
  • 9. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my How does the Architect undertake his duties? Rule 1.3 A Member shall act impartially in all cases in which he is acting between parties, and shall interpret the conditions of a building contract with fairness.
  • 10. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Impartiality and the Architect • How do you tell the client you got it wrong? • Should I give the client a draft of my award for approval comment? • Its OK to do what the client says, isn’t it? Reality Check • Who pays the Architect’s Fees? • Who gives the Architect more work? • Who is in charge of the Design?
  • 11. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Fairness and the Architect • Architect not a party to Contract (privity of contract!). • Architect cannot change or ignore terms of Contract. • Who is the Architect liable to? Reality Check • Are Contracts fair? • Should the Contract be fair? • Apply a fair Contract unfairly? • Apply an unfair Contract fairly?
  • 12. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Who is the Architect Liable to? Third Parties • Liability in Tort (duty of care). • If acts or omissions cause loss and damage to “other” person or “other” property. • Subsequent purchasers? His Client • Express terms under Contract. • Implied terms under law. – e.g. reasonable skill and care – Higher standard if employed by Contractor under D&C Contract
  • 13. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Architect Liable to Contractor? • No privity of contract. • Act /omission of Architect can adversely affect Contractor directly. • It WAS the law that an Architect does not owe duty of care (liability under tort) to Contractor in issuing certificates.
  • 14. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Architect Liable to Contractor? • In 21st Century, law continues to develop, and change! • Some Courts now considering liability of Architect to Contractor as certifier. • Architect has been found, in some cases, as certifier, to owe duty of care to Contractor. • Developing area of law!
  • 15. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Liability from BIM? • Multiple parties inputting into model. • Who owns the model? • Are you jointly and severally liable (Only 20% to blame but 100% liable!)? • Absence of case law, at the moment! • Does your PI Insurance respond?
  • 16. PLANNING PROJECT  CONTROL FINAL  ACCOUNT CONTRACT  CLAIM ARBITRATION EXPERT  WITNESS www.plus3.com.my COMMERCIAL CONTRACT  MANAGEMENT www.plus3.com.my Architects and the Future? • More complex projects. • Increased liabilities for Architects. • You look after your client. But who looks after You?
  • 17. n Preliminary  Claim  Evaluation  Report n Technical  Issue  Analysis n Schedule  and  Delay  Analysis n Loss  of  Productivity,  Acceleration  and  Out  Of   Sequence  Work  Analysis n Damages  Quantification n Defective  Plans  and  Specifications  Analysis n Claims  Avoidance n Quantum  &  Delay  Expert  Reports n Change  Order/Claims  Evaluation,  Preparation   and  Negotiation   n Mediation n Documents  Discovery n Litigation  Support n Exhibits  Preparation n Expert  Witness  Testimony n Project  Management  and  Contract  Management www.plus3.com.my PLUS    THREE    CONSULTANTS Contractual  &  Commercial  Services  For  Construction,  Infrastructure and  Oil  &  Gas Thank  You