ASSOCIATIONS
Avoiding contract disputes
– administrator’s vital role
Building contracts administrators should take note: more than half
of disputes relate to late, partial- or non-payment.
By Uwe Putlitz, CEO of the Joint Building Contracts Committee (JBCC)
6
NOVEMBER 2018
CLADDING // CONCRETE // INSULATION // STEEL // THATCH // TIMBER // TRANSLUCENT // WATERPROOFING // COMPONENTS
T
he JBCC is a non-profit company
that represents building owners and
developers, professional
consultants, as well as general and
specialist contractors who all provide input
for the compilation of JBCC Agreements
(contracts) that portray the consensus view
of the committee’s constituent members.
Many potential site disputes can be
avoided by the administrator following the
‘notice’ procedures within defined time
lines in the contract. This includes that the
employer pays the contractor a certified
amount in full by the due date so that the
contractor can timeously pay
subcontractors and suppliers. Without a
signed standard form contract, it’s very
difficult to deal with disputes. Contrary to
common belief, there is no need to repeat
legal principles in every standard form
contract – but it is important to clearly
define the rights and obligations of
the parties.
The contract administrator’s role is vital
for the smooth running of building projects.
For standard form contracts used in the
building industry, a neutral party is usually
appointed to administer a contract on
behalf of the parties. This neutral party –
traditionally paid by the employer – is
usually referred to as the principal agent,
engineer, employer’s agent or
contract administrator.
The significant volumes of information
continuously generated by all involved
must be read, understood, and dealt with
promptly. The information should also be
systematically filed so that it can reliably
and speedily be retrieved in hard or soft
copy format.
The contract administrator must also be
able to interpret all this information to
gauge its significance in future. He or she
Building contract administrators should be able to see disputes coming long before they happen
and cause conflict.
determines if the information is ‘evidence’
should a dispute arise later. If so, this
information must be protected against loss,
fire or vandalism for future reference.
So, what happens if the scope, the time
and value of a contract changes? Standard
form contracts provide for this by
describing specific procedures to be
followed. They generally assume that the
parties will act in good faith and deal with
their respective obligations fairly to build a
specified facility within a defined time for
an agreed amount of money – but that only
happens in a perfect world.
In modern times, such a predictable
scenario is only likely when buying shares
through a broker on the stock exchange
where the scope and the value of the
transaction is known and execution occurs
immediately on receipt of payment – all
done electronically – leaving no room
for disputes.
But in most building contracts there are
many unpredictable elements, whether
climatic or logistical such as late delivery of
materials and goods, to complicate matters
and spark off disputes. Where disputes
arise within the parameters of a contract,
they should be resolved in terms of the
dispute resolution provisions of that
contract. Litigation should be avoided if
possible as it is very expensive and time
consuming with no guarantee of an
equitable settlement.
THE CONTRACT ADMINISTRATOR MUST:
• Administer the contract and regularly report to and liaise with all parties involved;
• Be proactive to anticipate events that may delay the works and / or attract additional
costs; and
• Attend all and record proceedings. If there are no records, when timelines are missed
it is almost impossible to deal with disputes promptly and fairly without incurring
significant legal costs.
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