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MShore Law
MShore Law, Attorney
Category: Business Law
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Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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Im sub-contractor working on a construction project, weve

Resolved Question:

I’m sub-contractor working on a construction project, we’ve started the project and set up our site office / plant etc. but have been delayed commencing works due to the fault of the Contractor / Owner. The sub-contract clause 3.5 stipulates the following;

“The subcontractor acknowledges that the price is based on the fact that the contractor is not liable to the subcontractor, absent any actual fraud or intentional and active tortuous act, for any damages or cost due to delays, accelerations, non-performance, interferences with performance, suspension or changes in the performance or sequence of the subcontractor works. Should the subcontractors performance, in whole or in part be interfered with and delayed, or suspended in the commencement, prosecution or completion, for reasons beyond the subcontractors control and without its fault or negligence, the subcontractor shall be entitled to an extension of time in which to complete its works, but only if it shall notified, in writing, the contractor od the cause of the delay within 7 days of the occurrence of event.

As matter of fact, the project schedule might be delayed due to contractor’s action without interference from the owner.
• Delays in the delivery of Contractor supplies documents, and/or contractor free issue items, when such contractor documents or items are expressively due within a specific period
• In the event there are defects in contractors items, and provided the subcontractor has not contributed in any way to such defects and has delayed the report of their discovery.
• Any act or omission of Contractor, its agents, servants or other subcontractors for whom contractor is responsible”.

It seems pretty clear to me that we are entitled to request an Extension of Time for completion of our works however we are wondering if there is an avenue in the Sub-Contract for us to claim for additional costs in relation with such Extension of Time. I’m concerned with the first sentence of the said Clause: “The Sub-Contractor acknowledges... or sequence of the Sub-Contractor’s Work.” We are wondering if the meaning / spirit of this sentence is more like:

1. “The Sub-Contractor agrees that there will be no increase of price due to its own non performance and its own delays and / or if it needs to accelerate or change the sequence of its works to fulfil its obligations”, and / or like;
2. “The Sub-Contractor agrees that there will be no increase of price even in the event the Contractor requests the works to be delayed, accelerated or re sequenced.”

Moreover, the draft version of the Sub-Contract included an end clause “The Contractor owes no damage, duty, obligation or liability to the Sub-Contractor as a result of any delay...Owner’s representative” which was deleted during Sub-Contract negotiations. Knowing that the drafter of the Sub-Contract had initially included this additional sentence might help to understand the spirit of the first sentence of Clause 3.5.

We have found no Clause in the Sub-Contract governing the process of claim for additional costs.

Question:
We would like to have you advice on the meaning of Clause 3.5 and your point of view whether there is an avenue for us to claim additional costs for extension of time??.
Submitted: 5 years ago.
Category: Business Law
Expert:  MShore Law replied 5 years ago.
Thank you for the post, I am happy to assist you by answering your questions. The second understanding is consistent with the language of the contract. Regarding additional costs for extension of time, though the subcontractor expressly waived the right to pursue this in the event of a contractor delay, the subcontractor can argue that this provision of the contract is void and unenforceable as it is unconscionable and negligence cannot be completely waived in this instance. Please let me know if you have any follow up questions.
Customer: replied 5 years ago.
okay but please can you provide a legal write up as to why the clause is arbitrary or 'unconscionable and negligent'
Expert:  MShore Law replied 5 years ago.
What state governs the contract?
Customer: replied 5 years ago.
singapore
Expert:  MShore Law replied 5 years ago.
Thank you, XXXXX XXXXX Contracts Terms Act (Cap 396, 1994 Rev Ed) applies, which in pertinent party provides that contract provisions aimed at excluding liability for negligence resulting in loss or damage are subject to the requirement of reasonableness. In this case you would argue the complete absolution from liability due to one's one negligence is unreasonable and against public policy as it encourages inefficiency.
Customer: replied 5 years ago.
okay thank you but one further questions; can the UCTA be applied across all contracts? meaning can this be applied in construction law or just consumer liability?
Customer: replied 5 years ago.
okay thank you but one further questions; can the UCTA be applied across all contracts? meaning can this be applied in construction law or just consumer liability? e.g any case law refs?
Expert:  MShore Law replied 5 years ago.
It applies to commercial agreements as well, this is per section 3 of the Act. For your reference, see http://www.lawdit.co.uk/reading_room/room/view_article.asp?name=../articles/9942-when-will-UCTA-apply.htm
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