International Construction Contract Law

DR. LUKAS KLEE, LL.M, PHD, MBA is an independent expert in international construction contracts and principal at Klee Consulting, offering construction contract services, dispute resolution and bespoke training. Lukas has dealt with international construction contracts on a daily basis for over fifteen years and has participated in construction projects in the Czech Republic and internationally. Details at: www.klee-consulting.com.

About the Author xxiii Foreword xxv Svend Poulsen Acknowledgments xxvii Introductory Remarks xxix ShuiboZhang Introductory Remarks xxxi Robert Werth Introductory Remarks xxxiii Ilya Nikiforov 1 International Construction Projects 1 1.1 The unique nature of the construction industry 1 1.2 Individuality of construction projects 1 1.3 Roles and relationships 2 1.4 Contract administration 4 In-Text Vignette: Engineer's power to re-rate due to substantial increase in BoQ quantities by Albert Yeu (Hong Kong) 10 1.5 Further important aspects of construction projects 11 1.6 Typical contractual relationships 12 In-Text Vignette: Shipping and marine construction contracts in Asia by Knut Kirkhus (Oman)12 1.7 Motivation for international business 15 In-Text Vignette: The Italian construction industry: Between past and future by SDG & Partners (Italy) 17 1.8 Managerial analysis 20 1.9 Hazards and risks 21 1.10 Hazard identification 21 1.11 Risk analysis 22 1.12 Anti-risk measures 22 1.13 Typical hazards in the international construction business 23 In-Text Vignette: Corruption on Peruvian gas pipeline contract by Enrique Moncada Alcantara (Peru) 24 In-Text Vignette: Anticorruption and construction contract law by Enrique Moncada Alcantara (Peru) 27 In-Text Vignette: Indian law by C.K. Nandakumar and Rishabh Raheja (India) 33 1.14 Risk allocation in contracts 35 In-Text Vignette: Wrongforms of contract by James Bremen (UK) 36 In-Text Vignette: The importance of early analysis of risk, knowledge of efficient risk allocation and right choice of delivery method by Conor Mooney (France) 36 1.15 Form of Business Organization 42 In-Text Vignette: To deal with subcontracts in international construction projects by Giuseppe Broccoli and Fabio Zanchi (Italy) 42 In-Text Vignette: Interface agreements between subcontractors by Bernd Ehle and Sam Moss (Switzerland) 48 2 Civil Law and Common Law 55 2.1 Specifics of the governing law 55 2.2 Common law versus civil law: Differences and interconnections 55 In-Text Vignette: The common law of Australia and the influence of statutory law by Donald Charrett (Australia) 57 2.3 Delay damages (liquidated damages) versus contractual penalty 59 In-Text Vignette: The use of liquidated damages in construction projects by Rob Horne (UK) 60 In-Text Vignette: Penalty clauses and liquidated damages under Brazilian law by Thiago Fernandes Moreira and Caio Gabra (Brazil) 72 2.4 Substantial completion versus performance 76 2.5 Binding nature of adjudication awards 78 2.6 Limitation of liability 79 2.7 Lapse of claim due to its late notification (time bars) 79 2.8 Allocation of unforeseeable and uncontrollable risk to the contractor 80 2.9 Contract administration (the Engineer's neutrality and duty to certify) 90 2.10 Termination in convenience 90 In-Text Vignette: Isan employer in breach of contract prevented from terminating the contract for its convenience? by Cecilia Misu (Germany) 91 2.11 Time-related issues 93 2.12 Quantification of claims 94 2.13 Statutory defects liability 95 2.14 Performance responsibility: Reasonable skill and care versus fitness for purpose 95 2.15 Common law, civil law, and Sharia interconnections 96 In-Text Vignette: Considerations for the construction of offshore oil and gas structures in the Middle East by Faisal Attia and Fernando Ortega (Qatar) 97 3 Common Delivery Methods 102 3.1 Common delivery methods: Main features 102 3.2 General contracting 104 3.3 Design-build 105 In-Text Vignette: Dutch design and construct of infrastructural projects in complex environments by Joost Merema (the Netherlands) 109 In-Text Vignette: Best value in the Netherlands by J.N. (Jaap) de Koning (the Netherlands) 126 In-Text Vignette: Concern over increasing adoption of