BNV7127-Construction Law and Contract Report – Law Assignment Help

Assignment Task


Learning Outcomes to be Assessed:
1. Critically evaluate legal rules applicable to the construction industry and their impact on contract formation and project execution
2. Examine the administration of different types of construction contracts and their impact on project performance
3. Examine and apply legal rules to issues relating to rights and interests within the construction industry
4. Critically appraise alternative methods for resolving construction disputes

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Deliverable 1 requires you to apply your knowledge of construction law in determining the legal position on a number of contractual issues presented in a contract formation and execution scenario. You are also required to evaluate how these issues are likely to impact on the performance of the contract and to provide professional guidance on health and safety during the execution of the project.

You are one of two senior quantity surveyors working in a main contractor organisation, Ceylon Constructions (Private) Limited. Ceylon Constructions (Private) Limited is a multi-national company based in the United Kingdom (UK). Your director has requested for advice on a number of issues the company is faced with, on a proposed urban housing project. The history and current situation of the project is provided below. HomeLands Group, a developer (herein referred to as the client), is embarking on developing a housing scheme in Southampton. The project is to be completed before December 2022. The client requests your company to come up with the designs required for the project. Notwithstanding the fact that there is a design team in your company, your company has decided to obtain the consultancy services of Premium Designs Limited, which is a leading design firm in the UK. 
Premium Designs Limited quote a figure of GBP 8,000 for the services to be provided. Your director informs this figure to the client who agrees to pay for the same. Furthermore, you have been requested to be a part of the design team to be able to provide the client with early cost advice. Premium Designs Limited completes and submits all the designs requested before 3 months of the agreed deadline. They have now sent you an invoice of GBP 10,000. When your director inquires as to why there has been an increase of the cost, Premium Designs Limited has replied stating that Premium Designs Limited completed the designs 3 months ahead of the deadline and that both your company and the client will get the resulting benefit so that the project could be completed sooner. Your director has informed the amended rate to the client who has declined to pay the same. The client is only willing to pay GBP 8,000 as initially agreed and has expressed that the client never wanted the designs to be completed in advance of the deadline.

However, using the designs provided, your company commences the construction work. You have been entrusted with the task of supervising the purchase of all the building materials required for the project. Your director instructs that you get all the building materials from Phoenix Limited which your company has been dealing with for certain other projects as well. In early February 2022, you send Phoenix Limited an email specifying the details of materials that you wish to purchase. On the 15th of February 2022, Phoenix Limited replies to you with a quotation for all the items requested. You forget to reply to this mail, but you forward the mail to your director who approves the payment for the same. However, due to the pandemic, the finance team of your company takes 1 month to raise a purchase order and to despatch the advance payment to Phoenix Limited. Phoenix Limited has now sent an email saying that all the prices have gone up in the market and therefore the company is not in a position supply the building materials at the price mentioned before and has attached a new quotation which specifies a 20% price increase compared to the previous quotation. Your director informs you that a contract was made between the parties and that Phoenix Limited is bound to supply the materials at the previously quoted price.

You inform the same to Phoenix Limited via email and Phoenix Limited has written back to you indicating that you never accepted the quotation that was sent on 15th of February 2022 and that the quotation clearly stated that “The prices quoted are only valid for 14 days”. You re-check the quotation sent by Phoenix Limited and find out
that such a clause is indeed mentioned. However, you acquire the building materials required for the initial phase from another supplier and the construction work begin. While the construction of the housing scheme is in progress, your company decides to employ a sub-contractor to be in charge of all the mechanical and electrical work of the project. You suggest “iWire Limited” for this as it has worked with you for a few other personal projects you handled before joining Ceylon Construction (Private) Limited. Your director approves this proposal and iWire is appointed as a sub-contractor. Based on the relationship you have, iWire Limited immediately starts work without a written contract. You then insist that a formal contract be signed between the parties, but iWire is of the opinion that no such contract is required as you have worked with them before and the mutual understanding between the parties is sufficient. 

Given the above scenarios, to ensure everything proceeds well (contractually) with the project, your director has requested that you advise the management team on the way forward taking into consideration the need to get the project completed in time and to avoid any unnecessary legal complications. Based on your knowledge of contract (formation and selection) and health and safety, you are required to produce a report advising your director on the issues presented.

Your advice is expected to cover five main areas:

  1. Whether your company is bound to pay the revised figure of GBP 10,000 to Premium Designs Limited.
  2. Whether you can argue that a contract had been formed between your company and Phoenix Limited relating to the first batch of building materials. If you can conclude that a contract had been made, is Phoenix Limited bound to provide building materials to your company at the previous rates?
  3. What are the risks of proceeding with iWire Limited without a contract? To mitigate such risks, what are the appropriate factors to consider in selecting a form of contract for a sub-contractor such as iWire Limited?
  4. As part of your report, you are required to advise the management on the importance of having a written contract for construction works, and the likely impact of that on the three main criteria for measuring project performance: time, quality and cost.
  5. Executing construction works come with many health and safety implications. For this reason, legislation such as the CDM 2015 have specific requirements that parties involved in construction projects should meet. Prepare a short report to your director outlining some of the key requirements for health and safety on a project of this nature. You should highlight any specific issues which may be relevant to a housing scheme project.

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