Law governing the Contract

It is natural that the Law of the Country where the Works are executed shall apply to the Contract and supersede any contrary provision in the Contract. One can not always expect the Engineer or the Contracts Manager at Site to be experts in interpretation of local Laws. In a complex contractual situation, should the Engineer give his Determination solely based on the provisions of the Contract, or on the basis of limited understanding of local Laws and let his Determination to be tested in Arbitration/Courts?
25 days ago

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Ritu Das, PMP, CCE, Ahmet Tolay and 2 others like this
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Daniel Alcon Is this a FIDIC question? If I was the Employer I would expect the Engineer and the Contracts Manager to be experts in the Contract and to have a pretty good understanding of the law governing the Contract. Granted, I would not expect them to have the same experience as a lawyer, but I would expect them to know when it is necessary to refer a matter for legal advice and to act accordingly.
25 days ago Like

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Prakash Rao Yes. this is standard provision in all Contract Forms. Question remains whether Engineer will have time and funds for seeking outside legal advise before giving his Determination.
25 days ago Like

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Mohamed Thabet Parkash, Parties to the contract can agree whatever law of substance and this is DEFINETLY not the engineer's concern. There is a very thin line between performing the duties of the engineer who is administrating the contract and giving legal advices. If you were an enginer, be careful not to cross this line, one day your firm will be faced with a hefty claim from your client for breach of your duties by giving a flawed determination based on wrong understanding of the applicable law, and believe me, your PI will not cover that.
25 days ago Like

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Prakash Rao Mohammed, I agree with you on determination part, but doubtful whether Employer can sue Engineer for wrong contractual Determination. He always has the option not to accept it and take up other remedies available under the contract.
25 days ago Like

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Mohamed Thabet Your determination as an engineer will be most probably binding on the parties. If you were using FIDIC 99 have a look on cl. 3.5 So an absolutely wrong determination may cost your client a fortune to set aside by arbitration/litigation or lesser amount if DAB was active (which I really doubt at this part of the world). If I'm your client in this case I will make sure your firm will be selling its last chair to pay me damages for breach of your consultancy agreement. However, as you said, let it be tested Let it be rain Mohamed
25 days ago Like

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Hashim Muhammud Bashir "Question remains whether Engineer will have time and funds for seeking outside legal advise before giving his Determination." There usually will be an Agreement between the Employer & the party who will act as the Engineer to the Main Contract. The Employer's requirements should be part of this, so that the Engineer can bid accordingly. As far as FIDIC is concerned (and with my little knowledge), the Engineer's boundary should be FIDIC itself while issuing Determinations. It will be an added advantage to the parties, if the Engineer can refer to further legal advice (or provide legal advice himself) if/when he knows that such Determination could be challenged in the Local Courts later on. [A classic/simple example is when the Engineer rejects an otherwise valid Claim based on the time bar provision for Notices under 20.1 - in certain jurisdictions this will be challenged]
25 days ago Like

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Prakash Rao I agree. The FIDIC guidelines in this regard can be seen athttp://fidic.org/node/759
25 days ago Like

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Aldo Gonzlez Crdova, EME, MBA(c), PMP, Arb.CIP @ Mohamed, I have to disagree with your opinion. If for any reason the Engineer gives a bad advice to the Employer and due to this the Employer incurs in more costs or even in an arbitration, is not a breach of Contract by the Engineer, but it is a lack of diligence and care in performing his consultancy duties. In that sense, the Employer can't sue the Engineer for a breach of Contract (because, though it was wrong, the Engineer performed his duty as per the Contract). Nevertheless the Employer can make a claim under some clause of the Consultancy Contract in order to obtain a reimbursement by the Engineer if he considers it suitably (see FIDIC White Book, S.Cl.6.1.1)
24 days ago Like

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Sam Daniel The Engineer is deemed to exercise reasonable skill, care and diligence in the performance of his obligations. Determinations by the Engineer basically must be in accordance with the provisions of the Contract. But 'unfair' determinations / unfair Contract conditions can always be challenged.
24 days ago Like

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Aldo Gonzlez Crdova, EME, MBA(c), PMP, Arb.CIP Prakash, The governing law of the contract is stated in the appendix to tender (see also FIDIC R.B., S.Cl 1.4). When the Engineer makes a determination under S.Cl. 3.5, he's only required to make a fair determination in accordance with the Contract (and taking due regard of all relevant circumstances). In accordance with the Contract means that (in making his determinations) the Engineer has to take regard of the governing law stated in the appendix to tender which forms part of the Contract. Therefore, the Employer takes for granted that to exercise his duties with due diligence and care, the Engineer has qualified professionals who are competent to carry such duties which includes a good understanding of the laws governing the contract.
24 days ago Like

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Mohamed Thabet Aldo, An engineer is not a lawyer and he is not required to know anything about the applicable laws or where it contradicts with the contract. Understand your contract, follow it in making your determination, it's very simple. I came across several engineers talking about law when they don't have a clue about what the contract says, then come up with very funny determinations that neither goes well with the contract nor the applicable laws.
24 days ago Like

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Mohamed Thabet Take an example An engineer under fidic 1999 made a determination on a contractor claim where notice was given some 6 months after the event has first arisen. He is barred from doing so under cl. 20.1 but he made his determination considering that time bar clauses were not applicable in UAE ( it is by the way) He got fired on one day notice This is what am talking about, you don't have to talk about law if you want to be a good contract administrator
24 days ago Like

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Aldo Gonzlez Crdova, EME, MBA(c), PMP, Arb.CIP Mohamed, understand your point of view. Nevertheless is important understanding that the Engineer is not just a professional on engineering, but is a body of professional people represented by one person (natural or legal) named the Engineer. Such body of professionals,designed by the Engineer (see FIDIC R.B., S.Cl. 3.2) is composed by contract administrators, site engineers and legal advisers amongst other specialities. Then, if the Engineer needs advice of legal matters regarding the contract, he has to consult his legal advisor in order to make a fair, good and reasonable determination. Obviously if an Engineer (i mean a profesional on Engineering) gives legal advice, is quite probable that the determination will be wrong. Of course that's not what the Employer expects from his Engineer. The Engineer has to consider during his tender, all the resources needed to perform his contract duties.
24 days ago Like

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Andy Reid My understanding is that the Engineer will make his determination in accordance within the T&Cs of the contract (that was agreed by both parties who signed it). If one party then wishes to challenge the determination 'in terms of the country law' then the contract allows for this process (arbitration clauses, etc). The Engineer can not be expected to be up to date on local law at all times (which can change during the period of a contract), but it is his duty to fully understand the T&Cs of the agreed contract he is supervising and administer them accordingly.

Any comments?
24 days ago Like

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liaqat hayat Andy,I entirely agree with your comment .I ,however, feel there should be an expressed provision in consultancy contract to give the Engineer an option to consult local lawyer if he is in doubt on any local law provision.
24 days ago Like

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Prakash Rao Andy, you have taken words out of my keypad. Liaqat, final and correct interpretation of local Applicable Laws can only be delivered by a Judge or the like, and not by a Lawyer. Engineer can (and normally) give Determination on the basis of CoC and contemporary documents submitted. Any thoughts on whether the Engineer can be sued by either Employer or Contractor for wrong contractual Determination? I feel that it is possible only when either party can claim of malpractice or fraud or corruption by the Engineer? I am not talking of the professional mistakes in Design and the like.
24 days ago Like

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Clarence Elmer Quismundo To avoid potential litigation (or inconvenience at the very least), it is advisable for the Engineer to make his determinations bearing in mind the legal implications or possible challenges. He is after all allowed to engage legal advisers if he sees fit because the term "Engineer" is not limited by definition to a singular person. If the Engineer is handling a project in a country or jurisdiction which is not his own, he should hire local personnel who are familiar with the location and its laws. (In other words, share the pay if you want others to share in your burden). Additionally, the Engineer should be a skilled negotiator on behalf of the Employer. Before it even goes to arbitration or litigation, his negotiating skills more often than not may be able to avert that. Lastly (for good measure), if the recommendation has some loopholes or the Engineer deems it can be legally

challenged, then most probably it means that it is not the best decision on the issue and he should re-visit his analysis and determination. That is called risk management. As in every major problem, "prevention is always better than cure". Damage avoidance is better than damage control. Best regards.
23 days ago Like

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Giri Pillai So, it is a good idea to reject a claim on Time Limitation per Contract on behalf of Employer. Later, if Contractor challenges the Decision under Law and resubmit it, Engineer can reconsider in order to avoid litigation or as an impartial adjudicator.
23 days ago Like

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Nimal Perera Never reject a claim based on Time Limitations. simple (evaluate the claim based on its merits if submitted on a timely manner). Rejecting a claim hiding behind Time Bar provisions is one of the biggest mistakes an Engineer can do in this part of the world (GCC).
23 days ago Like

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Mohamed Thabet Andy, As far as I know, no insurer is providing PI insurance for engineering firms that cover legal advices. If you PI is not covering something it means you should not be involved in it even if you had inhouse expertise.
23 days ago Like

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Prakash Rao Daniel, couple of your comments reach my mail inbox, but do not appear in Discussions forum. Your point regarding first verifying correctness of the opinions being posted in discussions forums is well taken.
23 days ago Like

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Clarence Elmer Quismundo @ Giri: I concur with Nimal that a claim should not simply be rejected on the premise of time bar. This could be challenged in civil law jurisdictions. You could only do that as a first line of defense, and only if the notice of intention to claim was not submitted in a timely manner. By counter-issuing this first line of defense, you are only leveraging your negotiating position but the discussion does not end there. What I actually meant by re-visiting is that before an Engineer issues an official determination/recommendation, he should review his initial evaluation. If he finds it can be legally challenged, then he should conduct further review before sending out the recommendation to the Employer so as to avoid potential litigation. Best regards.
23 days ago Like

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Mohamed Thabet The engineer's duty is to manage the contract agreed by the parties not to make a new one. The engineer does not have authority to amend the contract cl. 3.1 fidic build 1999 as an example. Making a determination notwithstanding the time bar is plainly ultra-vires. Only the employer can waive such burden imposed upon the contractor . While merits of contractor,s claim might be assessed notwithstanding compliance with the time-bar, as a casual assessment to the employer only. Similar argument can be found in City Inn case for those who are interested.
23 days ago Like

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Daniel Alcon I agree with Mohamed. The Engineer has to administer the Contract. However, he should also act professionally and advise the Employer, his client, if he thinks there is a local law that contravenes a provision of the Contract and perhaps suggest to the Employer that he (the Employer) takes legal advice on the controversial clause of the Contract, e.g., the Sub-Clause 20.1 time-bar issue. On that latter issue I have heard and read various differing opinions, so it is dangerous in my opinion, especially in a jurisdiction that does not have a binding law of precedent, to assume that it does not apply in the Middle East, for example. Every contract is different, even though it may be based on the same standard form of contract and as a result a legal opinion should be sought at the earliest opportunity on each project as to whether the "time-bar clause" is thought to be binding or not.
23 days ago Like

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Mohamed Thabet Daniel, Just wanted to clarify that binding precedence is recognised in civil jurisdictions. A decision by a higher court is binding on lower ones and decision by similar courts is persuasive. Uncertainty arises in areas like GCC, from my point of view, because of two main reasons: 1. The vast majority of disputes are settled by arbitration, 2. The few cases which reach the court, its reasoning is not detailed to a level that will enable other courts to consider or distinguish previous judgments from the case in hand.
23 days ago Like

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Peter Elliott I hate to disagree with such an eminent person as Daniel, but surely you have put the cart before the horse. The Engineer has a duty to advise the Employer if he considers that a clause in the contract conflicts with the appropriate jurisdiction, not that the laws contradict the Contract. Otherwise, yes get a legal opinion, if your pockets are deep enough.
23 days ago Like

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Daniel Alcon Peter, I stand corrected. I think my point was relatively clear, but I've got my horse pushing the cart!
23 days ago Like

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Flvio Roberto Naval Machado Gentlemen, let me reword something here. The engineer is expect to administer/manage the contract. He is expected to act pursuant the contract. The contract is expected to comply with the law. Because life is more creative that the human imagination (even more criative then the imagination of lawyers) contracts will never be able to cover all possible situations, so that some construction/interpretation will always be necessary. That's usually where the problem is. I usually say that contracts are written in two stages, the first stage, usually with legal advice, when it is executed. The second stage when of its performance, by engineers. Thats why after works have progreess 50%, for instance, usually the contract is somewhat different then what it was first meant. Just natural. That's where I sometimes work. I review and prepare paperwork aimed at ensuring the clauses have proper interpretation... That's where engineers that are only focused in engineering and not administering the contract sometimes make their mistakes by being unable to foresee that certain practices do affect the interpretation of what is written in the Contract. I do not expect engineers to actually know local law (or any other law, as a matter of fact), but I do expect engineers to abide by the law and best practices, and to be able to "sniff" legal problems and pontential legal problems and pick up a phone before he takes any decision regarding the aspects that may concern an unchartered application of the Contract. Having local laws to govern at leat part of the contract, is almost unavoidable. Training and supporting the engineer is paramount.
23 days ago Like

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Prakash Rao @Flavio. Nicely put, but how Engineer will know he got the right legal advice? The Laws are normally not that straightforward anywhere in the world.
23 days ago Like

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Flvio Roberto Naval Machado @Prakash. Id find a good but not too expensive local lawyer who is familiarized with construction and cut a deal with him/her aiming at providing 30-40 hours monthly lof egal services (review of documents, etc.) during the construction period, at a reasonable (for both parties) monthly fixed fee. Also, make sure that your lawyer is comfortable wearing safety boots, jeans, polo, safe glasses and helmet. You will want him to take part in meeting at the working site once or twice a month... And last, choose one that is comfortable being a ghost writer and never showing his face to the other party, unless really needed. All we want is everything running smooth with good quality paperwork in case ever needed.
23 days ago Like

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Clarence Elmer Quismundo I wish that acquiring the services of a lawyer in construction is as simple as in criminal law where the Miranda Doctrine states "if you can't afford a lawyer, the state will provide one" (or something to that effect). Anyway, we have limited choice as far as the Law is concerned. Sometimes the law is just and sometimes it is not. You have to live with the Law in wherever place you are in. As the late Justice Wendell Holmes, Jr. said: "This is not a Court of Justice, this is a Court of Law." Best regards.
23 days ago Like

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Francis Woo FIDIC may have covered everything we need to know in administrating the Contract, but, just like everyday life, we also need to know the civil law, keeping the community living and working in a peaceful and reasonable mean without causing unreasonable advantage over one another. In my opinion, FIDIC provide some specific terms and conditions where both parties have agreed on top of the common practice adopted in the country in trade and business. On this subject (Local Law), there may differ from one country to another and for that if you are foreigner is better to seek expert opinion of the local because what applicable in your country may not apply in another place because of the local civil code may be related to their custom or religion or their politic system (so-called).
23 days ago Like

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Andy Reid Ah heck, you can shoot me later The Engineer must abide by, and hold both parties to, the agreed T&Cs / CoC. One party made an offer on said terms; other party accepted on exact same terms. Thus they were in mutual agreement. If later one party is unhappy with a decision by the Engineer, then he has the right to dispute, and/or proceed in terms of the contract, to take the case to civil (read that as local) law. It is not in the Engineers job description to make civil law decisions - but to make a fair and impartial determination based on the agreed contract. As a nudge for all to think about - if local authorities change, for instance, the local fire laws, then the Engineer would have to accommodate this in his project and advise both parties accordingly. This is part and parcel of what he is expected to do. What he is NOT expected to do, is to keep up with all local (or even international) laws and any amendments thereto. He has to administer the CoC - and not administer the local courts. That is why there are arbitration or local civil law clauses in the contract. [... An aside here - local courts in the same country have often erred by making opposing decisions on the same argument but for different cases... So which would be right...?] If an Engineer had to employ lawyers just to check local rules and/or employ one full time, then why do we have these clauses in a contract? This is just upping the anti and getting away from his core job of Engineering! Oh and one last item. Somewhere above a comment was made that the engineer should advise the client... Most of the contracts I have dealt with all state that the principle agent should act in an impartial and fair manner - this means advising the client AND the contractor when necessary. By advising one party only, he is not doing his job and could be challenged... Ok, now you can shoot me!
22 days ago Like

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Prakash Rao @Andy, 100% with you and also i'm in line for shooting!
22 days ago Like

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Nimal Perera One thing applicable to local contracts here. Employer is engaging the consultant and paying fees to protect his interests not the Contractors'.
22 days ago Like

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Flvio Roberto Naval Machado @Andy, I would not shoot you, nor Prakash, for the records... I believe, to start with, that FIDIC has changed somewhat the role of the Engineer. He is no longer expected to be impartial (although this would be good), but "technically impartial". The Engineer is hired by the Owner and therefore he is expected to act on behalf of Owner within the (technical) scope of his work. Although it sounds very nice what you said about hiring a lawyer (and Im not defending "lawyers" here), experience shows that "administering" and "engineering" are not one and the same thing. If I had to guess, Id say this is one of the most common sources of mistakes that start little and grow bigger throughout the construction. As a good friend, an engineer, repeats to the many CM that answers to him: "If you administer engineering, at the end, client will have the building and contractor will have the losses. However, if you administer the contract, client will have the building the same way and Contractor will have profits. You do not have to be an engineer to administer the contract. What you need is to have good engineers with you and you do your job, not theirs." I believe this is wise. Only in smaller construction works the Engineer can do both things.

If we are talking about larger works, I believe that no matter how nice it sounds what you said, it is not the best. Just take a look at the team that works in larger construction projects. You will find engineers (civil, electric, hydraulic, foundations, concrete, structure, etc.), you will find safety/ QSHE people, you will find business administration people, physicians, accountants, and ... if we are all lucky, just consulting lawyers (with all due respect to litigation lawyers). I am afraid that the times when construction was only an engineers' matter are long gone. Larger construction projects are multidisciplinary (yes, engineering is prevailing, but what branch/area of engineering?) Larger construction projects reminds me more of an assembly line than an actual fabrication line. Most larger contractors subcontract most everything, from design to labor, from heavy equipment to concrete.... Although ensuring that all this subcontracting can benefit from the work of lawyers, this is not the main point I am trying to convey. Also, the example you mentioned (if Im not wrong, you mentioned the fire department legislation/regulation), I guess it was not a good one. It is not up to the lawyer to check on Federal, State, Municipal legislation, nor to any DIN, IEEE, ANSI and other regulation concerning engineering, construction or other matters... Lawyers only step in regarding such matters when there are changes that can affect the contract or flaws. It would be impossible for any person, whether a lawyer or an engineer, to keep up with all that. That's why, I guess, all these duties are spread out on many people. For many if not most lawyers, such "legislation" is considered "quasi-law". Major law changes, on the other hand, such as Civil Code, and others that concern laws and rights more broadly and in abstract, its more like the usual work of lawyers. So what I am saying is that lawyers can help pointing out the critical aspects of the contract, to ensure that communication is line with the contract, the law and useful if needed for litigation (curious: usually when the documents are sound there is not litigation). In this regard, "lawyers" are part of the team. If you bring them in early, they tend to be part of the problem prevention team, if you bring them in only after the problem becomes serious, then they become associated with the problem, as part of the (solution of the) problem. Now, I volunteer myself for the shooting squad... but I guess it is another line... Cheers.
22 days ago Like

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Scott Chalmers Prakash, as a construction lawyer (though also former architect, forgive me - twice), I would expect the engineer or contract administrator to apply the contract. The Engineer should be entitled to proceed on the understanding that the contract is written to comply with applicable law (particularly if it is a complex project, with lawyers involved in drafting it), and in any event the Engineer should not be generally required to go outside the contract to examine local law. That said, if the contractor has a claim in law outside the contract, they will undoubtedly make it anyway. At that point, you can brief it out.

Flvio's advice seems prudent and well considered.

22 days ago Like

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Prakash Rao @Scott. I agree fully. Engineer need not take any legal help for giving Determination. Legal advice will be required by one Party when the other party disputes the Engineer's Determination quoting local Laws. Engineer will give brief or evidence officially before DAB or Arbitrator or Court as required. Some informal briefing to Employer's lawyer will anyway happen. As somebody posted earlier, these standard forms are already vetted by construction law experts. Normally, in India, Employer's Legal Officer will approve all the formats of Guarantees, Bonds, Draft Contract Agreement, Dispute and Arbitration clauses, etc for incorporation into the tender document. Finance guy will similarly approve all tax and commercial clauses particular to that area and work.
22 days ago Like

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Anders Buhrman I learnt a long time ago that engineers and lawyers often do not read and interpret a document in the same way and I would not like to run a project without access to a good legal specialist to consult, when I suspect a future contractual dispute. Normally I also draft any Engineers decision to be checked by my legal adviser before it is issued. It is generally a small cost but could potentially save a lot of expenses mainly for the Employer. Similarly when working as a Contractor I always tried to consult my legal adviser (at least in our major tenders) on possible loopholes and how to exploit those and increase low profits at tender stage. In my opinion anyone trying to be his own layer is asking for trouble
22 days ago Like

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Andy Reid @Flavio, and others following the discussion... Lets look at the question again: should the Engineer decide on the contract... Or on the local law? The Engineer (as the saying goes, the buck stops with him!) is the chap at the top who has to administer the contract, and as such (no matter how many people are below him) he has to make a decision on the T&Cs of the contract. If he were a judge (possible jury and executioner too!?) THEN he could make a decision in the local law courts AND you wouldn't need the local judiciary. So two points here: 1. Both parties agreed to the contract, and as such, both should know what they agreed to. If one party wishes to dispute the contract, under LOCAL law, the contract in most cases provides for this and that party has the option to go that route. & 2. Here I might be wrong (as this is a long standing [dis]agreement in the industry) but although the employer/client pays the engineer at the end of the day, the engineer is appointed to protect the interest of BOTH parties and is expected to be impartial when making a decision based on the contract (not the local law). Either party has the right to dispute this further up the chain and at law... Thus the Engineer must make his determination based on the T&Cs / CoC of the contract and not on local law or customs. An aside here: if one party is going to use local law to dispute an item, what is often the case is that that party knows or knew about the 'law' from a prior case (middle east in particular). If the contractor can prove this, quite difficult and I'm not sure of the lawyerly term here, but then the contractor can argue and show that the other party signed a contract to which he was never going to agree in the first place and thereby placing the other party at a distinct disadvantage [personally I think this is fraudulent but then "let the buyer beware...] @Flavio: the reason I mentioned local regulations, was that the engineer is expected and required to meet local regulations and in the process design or engineer solutions thereto (after all that is his job); he is not expected to be a lawyer and required to meet every local law of a country - that is the purpose of having clauses in the contract to determine those grey areas where unusual disputes arise. If the contract terms are administered correctly, both the client and the contractor should be acceptable to impartial determinations based on the contract, the project would proceed smoothly and the risks assumed by both parties would be clear. What is happening now (and I think this is more to do with economics) is that both parties are either trying to maximise profits for inferior work (contractors) or cut costs to meet the size of their pockets (clients). What neither realise is that by allowing the engineer to do his job, rephrase that, IMPARTIALLY do his job, then both parties would benefit and here I would apply an old adage: Fair money for work done. ...oh and here I can also add that this is what builds clients or contractors trust at the end of the day! @all : and, as someone mentioned earlier or in another discussion, this is why it's a lot better (and a heck of lot cheaper!) to discuss things over a cup of coffee or tea if one prefers BEFORE the lawyers out there get involved. Once they get in, no one profits except for the lawyers themselves. [Yes I'm cynical and don't like lawyers as I prefer to build not sit in court all day] Ok, I've gone on a bit so NOW you can cock the triggers and take aim.....
22 days ago Like

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Andy Reid PS. I believe there's a difference between following local regulations, etc., (clear cut) and following the local laws (not so clear: local customs, state, federal, national, international, etc.)

22 days ago Like

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Clarence Elmer Quismundo I am not going to shoot you, Andy, because I actually agree with you. As a matter of fact, I had advocated in my earlier comment that the parties should negotiate amicably (ideally with the facilitation or assistance of the Engineer). I had also advised damage prevention (fair and reasonable determinations and impartial administration of the contract) instead of damage control (adjudication, mediation, arbitration, or litigation) because when you reach this point then relations are already damaged to a certain level and you would need to stop the bleeding on both sides. Further, there is no guarantee that you will get what you deserve in a court of law. Please take note of my quote from Judge Wendell Holmes Jr. ("This is not a court of justice, this is a court of law.") Lastly, I wanted to be a lawyer but I was discouraged by someone who told me that I would have to prepare myself for a lifetime of arguments. So I became a Civil Engineer and I am now arguing with both lawyers and engineers anyway! Such is the life in Construction. Best regards.
22 days ago Like

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Andy Reid Clarence, no problem! And on the lighter side... (Re: becoming a lawyer) Why do sharks never bite lawyers when swimming in the sea? ..... Professional courtesy!
22 days ago Like

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Clarence Elmer Quismundo Fair enough, Andy. Here in our side of the world, old folks prefer to call them "crocodiles" (LOL).
21 days ago Like

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Andrew Tweeddale This quesiton has raised so many issues it is difficult to know where ot start. Clause 20 states that if a contractor considers himself entitled to any EOT or additional payment under the contract "or otherwise" he shall give notice. It seems clear to me that if the contractor has a right to claim under the law of the contract (or any other relevant law) then he can submit a claim and the Engineer has to make a "fair determination" (s.cl.3.5). The Engineer cannot say that the contract does not refer to (e.g.) negligence and therefore conclude that nothing is due the contractor. He should not adopt a position of Nelsonian blindness and pretend that there is no law outside of the pages of a FIDIC contract . The laws that will be relevant to the contract will usually be the substantive law of the contract and the law at the place of performance (although there are circumstances where other laws may play a part). Most country's law are made up of both mandatory laws and non-mandatory law. Under Sub-Clause 1.13 the contractor is required to comply with applicable "Laws". I take the view that these mandatory laws will supersede the contract terms if there is a conflict between the mandatory laws and the contract provisions. As a mininum the Engineer should be aware of relevant mandatory laws (although he obviously doesn't have to be an expert) and if the Contractor makes a claim which involves these mandatory laws then he should request that the Employer take advice on the issue and provide him with that advice. I disagree with some of the comments made above - the Engineer does not have an obligation to go off and play at being a lawyer rather it is the Contractor and Employer who set out their respective positions and thereafter the Engineer makes a fair determination. Too often I have found that Engineers think of themselves as the Employers advocate.
21 days ago Like

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Mohamed Thabet Andrew, An engineer cannot and shouldn't even try to make a determination about claims under the law. an engineer in a common law jurisdiction cannot make a determination about whether the delay damages are lads or penalty. Under civil law cannot make a determination about force majeure claim on grounds that are wider than what is contemplated in the contract. Under sharia laws he cannot make a determination whether express interest on late payments are against public policy. It is the parties' responsibility to ensure that the contract is not contradicting with the applicable laws.
21 days ago Like

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Wim van de Koot The governing law to the contract is to be stated in the Contract. Fidic stated in cl. 1.4 (1999 Red) that the Governing Law is the Law of the Country or such other jurisdiction stipulated in the Appendix to Tender. If a contractor is to work in a foureign Country he has to familiarize himself with the applicable law, of negotiate with his Employer that he wants another jurisdiction to govern. I have seen sometimes the same happening when a foureign Employer is to do a project in a certain Country. What Parties do have to realize is that the only vairable jurisdiction to the Parties is the Law governing the provision of the Contract. In as far als labour law, environmental law, tort law etc. is concerned, Parties will have to adhere to the juridisdiction of the Country. Having said that, how do I see fit the Engineer into this? Like the Contractor (or the Employer) he has to familiarize himself, before entering into the Contract of what he is up to. If an Engineer, orginating from Country A wants to be the Engineer in a Contract between an Employer and a Contractor governed by the Laws of Country B, he has to ask the question is he is capable to what he is up to. And if he is lacking sufficient knowledge to the Law governing the Contract on which he is to be the Engineer, he has to make sure that he finds sufficient back-up (foreing lawyer from Country B) to make sure that he does not make a mistake. Or, alternatively, agree on forehand with the Employer that - in cases he foresees lacking the required knowledge - that the Employer will refer matters to somebody who has the required knowledge.
21 days ago Like

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Andrew Tweeddale Dear Mohamed, We are going to have to agree to disagree. If an Employer is providing free issue materials under clause 4.20 of a Red Book Contract and fails to provide those materials causing the Contractor loss then the Contractor has a claim for breach of contract. There is no reference to 'Cost' in 4.20 and therefore the Contractor has to claim its losses for breach of contract under the substantive law of the contract. Applying your argument the Contractor would get nothing from the Engineer and the Engineer should ignore the claim. I believe that this is wrong. If the contractor puts in a Clause 20.1 notice then the Engineer is required to evaluate his claim. Andrew
21 days ago Like

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Andy Reid @Mohamed: if you read what I said I quite agree. The engineer must make his determination based on the contract, and the contract then allows for either party to go to arbitration/law, etc., if they disagree with his determination. The engineer cannot be the judge of local laws... @Wim: if an engineer is practicing in a country he is unfamiliar with, then he's providing a service that he shouldn't be as he can not fully meet his clients requirements (nor the contractors, nor the contract itself) @Andrew T: I do see your point but look at the question that started the discussion, not a particular item based on one particular contract. [In the "free issue" example you quote, the contractor has other avenues or routes he could have taken (your example isn't clear) before jumping the gun and quoting breach of contract - but this could/should form a separate discussion]. Ok, now who's going to be the one to pull the trigger...?
21 days ago Like

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Stephen Baffoe Bonnie In my opinion Mohamed Thabet and Andy Reid have spelt out adequately what should be the engineer's role and focus, and that is to administer the contract in accordance with the agreed provision of the parties. Any legal posturing must be avoided. If the Contractor disagrees with the Engineer's determination, on what he perceives to be a legal issue, then he should pursue the dispute resolution clause in his contract for determination either by an arbitrator or judicial determination. I am yet to see a lawyers determination, they only offer opinions which by the way, 50% of the time they are wrong. So my fellow Engineers, go with Andy and Mohamed, stay focused and avoid straying into the legal minefield, where lawyers have attempted to turn water into wine, some have succeeded and many have failed. Always remember that the CoC is the law of the agreement between the contracting parties ( at least under qatar civil code) oops! here is me straying out of my comfort zone and trying to interpret the civil code . I don't blame engineer's trying to do same. Anyway, if some where along the call of duty, an Engineer develops the urge to break its waters and delve into legal interpretation, that is the time, I say, he has lost interest in administering the contract and must quickly get himself qualified as a lawyer and earn his worth giving legal opinion and advise. C Certainty the Engineer will not get paid, for trying to give such opinion or advise.
21 days ago Like

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Sunil Patel as per the new FIDIC engineer no longer considered independent authority since he is employed by the employer...
20 days ago Like

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Andy Reid @Sunil Old or new, the Engineer should make his determination based on the T&Cs of the contract. If he fails to do this (I.e. favours the client [or occasionally the contractor]) then his determination would not only be challenged in court, but he could then be challenged in his professional capacity... and this is not something that he would be in favour of as this could/would jeopardise his future professional standing (never mind his PI, etc., etc.) I have already seen 2 engineers fired for this and they both have had problems getting new work as the above is something that follows them wherever they go...
20 days ago Like

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Tim Mitchell In this regard perhaps it is time that FIDIC clarified the Engineer's position in the standard consultancy agreement or that Engineers qualify positions when accepting appointments?
20 days ago Like

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Clarence Elmer Quismundo Making the Engineer's position more clear-cut would be ideal, but unfortunately might still be a distant dream at this time. If they implement this, the Contractors would need to factor in considerable additional costs due to the risk of a partial Engineer. This would drive up project costs, which the Employers/Owners would not allow. If ever they do this, it would probably be just an internal understanding

between the Employer and the Engineer (that the Engineer will take the side of the Employer more often than not, that is). I guess the Status Quo should be maintained for now. At least in theory, the Engineer has the official mandate to either be impartial (under FIDIC 1987) or fair/reasonable (under FIDIC 1999 upwards). Whether he upholds that theoretical mandate would be up to him, so let the Engineer decide in accordance with his conscience then. Anyway, if the Employer is hiring a high-profile Engineer, I'm sure both parties would be aware of that firm or person's professional reputation so they can adjust accordingly. Best regards.
19 days ago Like

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Tim Mitchell Clarence, if your comment is in response to mine then not sure that I follow. The partiality or not of the Engineer under the Contract is clear (87 versus 99). It is the Engineer who clearly needs to understand its oblligations when signing the Consultancy Agreement. Ought not the Engineer to qualify that if local legal advice is necessary the Employer would provide and/or pay?
19 days ago Like

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Clarence Elmer Quismundo Tim, I believe I may have mis-understood your comment. That happens in a world of several versions of English. I thought that you were referring to FIDIC's clarification as an option of having an impartial or independent Engineer as to one who directly reports to the Employer (and would naturally protect its interests). After your clarification, it is much clearer to me on what you actually meant. Nevertheless, my misinterpretation indirectly helped in bringing out another dimension of the issue which is actually happening in our country. Here in our place, there is no such thing as impartial. Everyone is partial to a certain degree. Best regards.
19 days ago Like

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Francis Woo On the subject of Project Implementation, who knows the subject matter better? Engineer or Lawyer? If there is no criminal act or act of negligence, if it is not in the court of justice, but through arbitration,do we need a Lawyer to decide where two parties unable to reach settlement of disputes. Does an Arbitrator require law qualifications? Is it better to engage lawyer to administrate the contract? Should the subject of Law be included in Engineering courses and take the Engineer course to may be 5 or 6 years instead of 3 or 4 years? Sound very complicating, isn't it? I guess FIDIC has made things more simpler if we as the Engineer carry out our responsibilities duly and where ever possible try to reach settlement amicably, and get the lawyer out of business, so to speak.
19 days ago Like

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Clarence Elmer Quismundo That is a good idea, particularly to engineers (the profession, not the FIDIC entity) who would eventually be involved in the construction industry after their university. That would inevitably be the Civil Engineer. Other engineers can work in other businesses but the civil engineer would definitely be involved in construction. Subjects in Construction Law and Contracts would be great additions to the civil engineering curriculum. Then these eventual professionals will have no problem in understanding and applying the Governing Law of the Contract.
19 days ago Like

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Andy Reid How's this for something to think on, aside from the discussion... QS's had to study labor law and contract law as part of their training (well I did) before they could qualify. I thought engineers had to do the same especially as they deal with people (labour) and projects (contracts). Maybe for a separate discussion some other time...
19 days ago Like

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Clarence Elmer Quismundo A majority of my fellow civil engineers don't bother about documents and contracts. Well, of course they knew how to read drawings and specifications but that's as far as they go. They don't take the next step of how these fit into the entire contract. Their only concern is to have the works done at the site (properly done if we get lucky). This is where I disagree with them. As a civil engineer myself, I paid my dues by working as a field engineer in the early part of my career. Eventually I moved on and studied/practiced the disciplines of Quantity Surveying and Contract Administration which as Andy pointed out need to be understood by engineers. I find it unacceptable for a professional civil engineer who does not know how to perform measurement & valuation, and does not have any idea on the contract documents of the particular construction project that he is supervising or managing. You cannot manage and control what you do not know.
19 days ago Like

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Tim Mitchell A civil engineer's education is fairly broad, I would be surprised if it did not include an element of law - other types of engineer not sure. Hopefully an engineer will provide guidance? However, does the Engineer under FIDIC have to be of an engineering background?
19 days ago Like

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Clarence Elmer Quismundo I believe it is the original intent. Judging by the history of FIDIC, it was an offshoot of the ICE (Institution of Civil Engineers) Conditions of Contract which is quite revealing as its name suggests. Being the primary professional in most construction projects, they are more often than not assigned to manage the projects. The term has grown into a fairly broad spectrum, and I've heard of heads/owners of engineering firms that do not have any engineering background. Even then, sufficient experience in the construction industry would be necessary, and the Engineer (person or company) need to engage the services of real engineers to perform his job efficiently. Science and mathematics is still relevant in construction. Best regards.
19 days ago Like

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Francis Woo In my opinion, prefer a person with engineering background, under FIDIC the term ENGINEER is used. For building contract, some prefer ARCHITECT as the qualified administrator. I suppose, for building related project, the Architect may be a substitute of Engineer for building project. Q.S may be qualified as the Engineer to administrate under FIDIC, I may be wrong, but good to check this out. The definition did say that "Engineer" is a person to act as Engineer for the purpose of the Contract but not refer as qualified engineer.
19 days ago Like

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Nimal Perera Engineer is appointed by the Employer to suit with his requirements. Nobody else has the authority to appoint the Engineer. You all can speculate what you want in an ideal situation but the fact remanins that the appointment of Engineer is at the sole descretion of the Employer in the real world. (at least this part of the world).
19 days ago Like

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Tim Mitchell Whilst FIDIC has roots in the ICE conditions and originally intended for works of a civil engineering nature many of us deal with building contracts let under the Red Book. I would suggest therefore that the Engineer under the Contract does not need to be an engineer ....... however often it is.
19 days ago Like

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Clarence Elmer Quismundo I agree with you, Tim. Nevertheless, this is one topic where FIDIC is advised to address, i.e., define clearly what the Engineer is. In our part of the world, anyone appointed as Engineer who has no engineering qualifications might be construed as a disrespect to the local engineering community where a majority is quite title-conscious. As a matter of fact, even in our midst there is a clear divide between those who are professionally licensed or certified and those who are plain engineering graduates who have not secured their licenses (who are perceived to be "lesser gods", which for the record I do not agree as there are non-licensed engineers who are very good at their jobs). Anyway, I also think it is a double-edged sword. Those title-conscious engineers, if they do not wish to be bypassed or set aside, should also take it upon themselves to enhance their skills and study contractual matters. If they want to "talk the talk", they should also "walk the walk." Best regards.
19 days ago Like

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Andy Reid Ok, I think the question has been answered to Prakash's satisfaction (pls tell me if I'm wrong)... The new or revised discussion seems to be focussing now on the "Engineer"... Looking at where we are, I.e. a FIDIC forums I would comment as follows: An engineer can make an informed decision on a building or civil contract as he has the background to do so. Similarly, an architect, a QS, a contractor,... They can all do the same - I.e administer a contract. BUT the proviso here is that not only should they have the background to understand construction but they should also have the contractual knowledge to be able to make a fair and proper determination in terms of the contract. One cannot expect a labourer who has no knowledge of contractual matters to decide the fate of a project. Similarly one can not expect a lawyer (who has no real knowledge of construction matters) to make (here I'll repeat) "a fair and proper determination in terms of the contract." That, to me anyway, is why "an Engineer" (or old fashioned these days, an Architect) has always been appointed to oversee a project. They have, or should have, the practical knowledge and background, combined with the contractual knowledge and expertise to, in simple terms, run a job and make sure it sees fruition with all parties relatively happy. What is happening now (ok, personal opinion) is that unqualified people, or biased people, are being appointed to protect one parties interests,... And at the end of the day, the project suffers! Being personal here, I really don't give a... toss... about the individuals. I like to be associated with a successful project, a project that is built on time, where the client is happy with what he gets, where the contractor has made a decent profit and all concerned, ALL, are happy. I always reckon, 'toss' a lawyer into the mix and no one goes home happy. NOW back to the original question - if the engineer makes a fair and impartial decision/determination based on the mutually agreed T&Cs CoCs of the contract, then both parties thereto should have no reason to go to arbitration or seek remedy in a local court of law.

Go to law,.... no one ends up happy and any potential profits (contractor) or savings (client) go into the lawyers pocket. (Personal here - and bang goes any bonuses too!) Over now to the forum...
19 days ago Like

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Andy Reid @ Clarence PS. FIDIC already defines what the engineer is and what his role is. Whether an actual engineer is appointed, or the local tea person (here I'll be gender conscious) is up the client...... Not all clients actually know what they're doing..... 'nuff said!
19 days ago Like

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OMPRAKASH Agarwal Very informative discussion, However in my openion, the problem begins once some one tried to manage their contractual problems at the expense of other one. Hence the dispute arises.
19 days ago Like

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Clarence Elmer Quismundo @ Andy. Well, I do not wish to leave everything to chance. Short of spoon-feeding, FIDIC can include a detailed checklist in the Conditions of Contract in the form of an Appendix, stating the exact professional qualifications of the Engineer (with or without engineering background, real engineer or contractual Engineer, minimum number of years experience in construction, etc., you get the idea). This would erase all doubts and assumptions on whether the appointed Engineer is really what the parties perceive to be. I observe that there are 2 schools of thought here - those in favor of an Engineer who is actually an engineer by profession, or a juridical Engineer who may not actually be a real engineer in the literal sense of the word. For the record, I can live with both for as long as the sufficient and relevant experience and knowledge in construction is there. So I can say I'm neutral. (Is that an easy "cop out" or what? LOL) Now I admit that I may be digressing from the main question regarding Governing Law of the Contract. But I think several participants followed the side story because the Engineer is a very vital part of administering the contract, he

is in fact the official administrator of the contract. So it is very important to make a clear and complete definition of this person or entity. Best regards.
19 days ago Like

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Prakash Rao @ Andy. I am very happy with the high standard of discussion in this FIDIC Contracts Forum including this Discussion. As Contract Administration is more objective oriented and depends on the requirement of the parties involved, we cannot expect a clear cut conclusion/answer in most of the discussion.
18 days ago Like

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SURESH GUDPE Engineer is there to provide the ' contractual remedy' (or for that matter the relief) to either parties strictly in accordance with the provisions of contract. Legal remedies to be sought by either parties are out of his perview.
17 days ago Like

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Andy Reid Now that's a nice explanation!

17 days ago Like

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OMPRAKASH Agarwal In a complex contractual situation, Engineer Must give his determination solely based on the provisions of the Contract and various contractual provisions, and should consult the local legal experts, therefore safeguarding the interest of his employer as well avoiding the future legal complication.
16 days ago Like

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Martin Brown I have followed the contributions with interest, but have to disagree with the thrust of a number of the previous comments. If the Engineer is to administer the Contract, then any constraints or other overriding influences implied by the governing law on the terms of the Contract effectively mean that the contractually effective terms are consequently different to the wording in the Contract Document. What he is therefore obliged to administer is therefore dependent on any implied terms or constraints etc. under that law. In most countries the effect of the governing law on the terms of the Contract will be minimal, however there are quite a few exceptions (e.g. UAE, Qatar, Russia). Obviously the Engineer is very unlikely - personally - to be qualified to investigate and interpret the governing law in many countries, but I cannot see any reasons for believing that that means he can escape the professional liability for failing to administer the Contract correctly simply because he chooses not to take cognizance of any effect the governing law has on the terms. If the Engineer needs professional legal support to be able to perform his functions, then I could well imagine that in an action against him for professional negligence the argument that he did not have such support may not be accepted as sufficient defence.

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16 days ago Like

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Nimal Perera Law of the Country or the Civil Code (in this case) is supreme. If the Engineer is not aware of this, I would say Good Luck to him.
16 days ago Like

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Tim Mitchell The Conditions of Contract are selected, or caused to be selected, by the Employer who is most likely domiciled in the country the works are to be undertaken. I would suggest that a primary obligation rests with the Employer to ensure that the Conditions of Contract comply with those matters of law which cannot be contracted out of (ie. Muqawala (25 clauses) requirements of the UAE Civil Code). The next entity with an intetrest in legality is the Engineer who is responsible for administering the Contract. I would suggest that it is necessary for an Engineer to 'raise the flag' much earlier than at the time of making any determination. If the Conditions of Contract exist before the Engineer is engaged then prior to acceptance of the commission the Engineer ought to enquire whether the Employer has obtained legal advise upon the application of the law relevant to the standard and ammended conditions of contract. If the Engineer is a part of the drafting process then the Engineer should request that the Employer obtains legal advice at that time. The UAE Civil Code requires the parties to honour the terms of the contract they entered. FIDIC provides the Engineer no opportunity to ammend the Contract. In terms of the Conditions of Contract is it not better to get the drafting right first rather than fix it later?
16 days ago Like

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Francis Woo Of course is always better first to get everything in order, but is it possible , considering the multitude of principles and obligations, link to culture, religion and more so in the modern world- the so called politic. For instance, who is IMF, federal reserve, world bank, central bank - are they guided by principle and which principle - corrupted or righteous? Judging from the statistic, it seem that the people in the construction management has lost the basic knowledge of common sense - "Principle of Good Faith". We are more driven by the external changes making the economic climate more turbulent that we very often erroneously relied upon the written words that are subjective and debatable pending on interpretation which led both parties depart from their obligation and turn to civil court. Bottom line, inevitable- legal counsel is part of project construction team from project inception to project close-out.
16 days ago Like

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Clarence Elmer Quismundo Common sense, good faith, word of honor, fairness and reasonableness, impartiality, professional ethics, conscience, and competence [on all parties, which include the Employer, Engineer and Contractor]. - Aren't these what the Law is all about? And is it not the mandate of the law to give the consideration to the aggrieved party in any dispute? Is it not the over-all consensus that unfair contract terms are construed as voidable? Is it not correct that "the higher law shall always govern" (Governing Law VS contract provisions)? Lastly, does the condition of Impossibility render any provision as not applicable? (we are dealing with science in construction after all) Unless I missed out something, can we agree that the above represent the most relevant questions that any Engineer

should ask himself before he makes any determination and recommendation? If this is so, different Engineers would come up with varying solutions to the problem at hand due to the wide differences in levels of conscience, knowledge and opinions, and also considering the differences cited by Francis above. In the end, the best way is for sensible heads to prevail and address the situation as civilized beings - i.e., find some common grounds where both parties can live with. I don't think that there is such a thing as "irreconcilable differences" if both parties are objective and reasonable. So can we agree to disagree? Best regards to everyone.
16 days ago Like

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Tim Mitchell Is it reasonable to expect that an Engineer blindly accepts a commission to administer a Contract without enquiring as to the whether the various clauses may be operated or applied in accordance with the laws of the land? Whether the terms of the Contract are enforceable relevant to the laws of the land is no different to ensuring that the designer complies with the local Codes and Regulations?
15 days ago Like

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Clarence Elmer Quismundo @ Tim, We are in agreement there. My point exactly, which means in summary that the Governing Law (as the term suggest) would prevail (i.e., govern). Unfortunately, the Engineer at times accept the job without bothering to check what he is going into, simply for the purpose that he has mouths to feed. If he does that, then he cannot hide behind the reason that he did not know. Ignorance is not an excuse, so the law says.
15 days ago Like

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Andy Reid A couple of points here; If the law of the land is to apply, then: 1 if the engineer is to administer 'the law of the land' then surely he also needs to be an accepted lawyer within said law and able to practise as one in order to be able to make a determination; in which case why have an engineer, just appoint the d.....d lawyer as principle. 2 if the contract is not in accordance with the laws of the land in any way however minor, then is the contract valid?

3 if the contract isn't valid, then how can a party be aggrieved within it? Redress would have to be through a normal civil suit as there would be no contract. [i know there's a term for this, but then I'm not a lawyer, just a contractor] I'll go back to the point that the engineer administers or runs the contract on its terms and conditions - and leaves any local law arguments to the clauses that allow either party to seek redress that way (arbitration, mediation or a court of law).
15 days ago Like

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Martin Brown @ Andy Reid 1 The Engineer administers the Contract, but if one or more terms in the written Contract Document are effectively amended impliedly by the governing law, then the truly valid Contract is the amended version - that is then what he should be administering. 2 A Contract based on a standard form such as FIDIC is hardly likely to be invalid per se, however individual terms within the written version may be invalid and additional terms may be deemed to be included due to the governing law.
15 days ago Like

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Andrew Tweeddale I am in agreement with Martin - sorry Andy. If the Engineer runs the contract as you (and many others on this forum) have suggested then he will inevitably be consigning the Parties to long and costly disputes which should be avoided. As one of those d......d lawyers I am pleased to say that Engineers (and QS's) have kept me pretty busy for the last 17 years.
15 days ago Like

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Flvio Roberto Naval Machado @Andrew, As one of those d......d lawyers, I'd like to add the following: (1) I guess we all agree that Engineer is to assume that the contract is compliant with the law and pursue its performance.

(2) Having someone experienced and with a good legal grasp to monitor communications between the parties would definitively be a must, in order to avoid surprises... (3) If claims are presented that do involve the law of the country explicitly, then I strongly suggested local lawyers to be involved in helping analyzing and answering such claims. (4) Last but not least, most of the problems I face daily are related to: (A) Poor surveys & studies by Owner (who decides to go bidding with poor specifications); (B) Poor technical & commercial proposals by constructors that, at bid time, accept most anything; (C) One-sided contracts imposed by Owner that, when there is a dispute that actually goes to court, becomes unpredictable, so outrageously one-sided they are.... If we could take care of the 3 points above, I bet we would have more realistic expectations regarding constructions and, as a consequente, less to worry regarding the law of the country, whichever it may be.
15 days ago Like

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Clarence Elmer Quismundo All valid points, esteemed colleagues. I would neither disagree nor argue with anyone in particular. I would simply like to add my 2 cents' worth as follows: 1. I believe Engineers should be appointed to administer the contract in consideration of their experience in construction. I do not hate lawyers, in fact I work closely with them. But they should agree that a highly technical person (with "some" knowledge of legal principles) is better equipped to handle a construction contract with all its attached technical (and at times ambiguous and confusing) documents such as Drawings, Specifications, Work Programmes, Cashflows, BOQ, Unit Price Analysis, Standard Method of Measurement, Statement of Work Information, Construction Methodology, etc. Besides, there is no prohibition for an Engineer to engage legal services to assist in his duties. 1. If any provision in a contract is not valid, I presume that the particular provision is logically superseded or overruled by the relevant applicable law. I've taken some valuable advice from lawyer friends that it does not automatically invalidate the contract and the valid provisions remain in force. So I guess we can still use the same contract, but some mutually agreed amendments might be necessary. 1. On the many poor surveys, engineering problems and other technical errors that Flavio mentioned, I cannot speak for the other engineers but I acknowledge the shortcomings of the engineering profession (shame on us). Most are not intentional but often the product of time and cost/economics constraints, and this is partly the fault of Employers. Others are done out of ignorance, but seldom out of bad faith. As I've said previously, they have many mouths to feed. 1. I agree that local lawyers should be consulted because no other person is more familiar with the Law of the Land. Having said that, they cannot do it without the Engineers. They must find a way to co-exist in the construction project. Forget the egos, there is no Boss between them. The only person to be called Boss is the Employer and the facility's end-users/customers.

1. I have often discouraged my Employers to use one-sided contracts because they would be voidable, and I remind them about the Principle of Contra Proferentem which would be used against them. Lastly, I am both a QS and Engineer. Fortunately, none so far of my previous works have reached either arbitration or litigation (nevertheless, we are ready just in case). Some have come close but we are able to avert them through the intervention of reasonable heads. Best regards to everyone.
15 days ago Like

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Andy Reid Ahhh,.... seems playing devils advocate draws out the players. From the 3 comments above, it would seem that the engineer should follow the laws of the land and then the contract?! Hmmm... The implications of this then should mean that using an internationally accepted form of contract (e.g FIDIC) can not be done - and that each countries engineering organisation should amend said documents to include local law (note, I said law; not rules, regs or ordinances). This revised document(s) should then be the basis of any local building contract, not so? This would level the building field so to speak so that all tenderers would be bidding on equal terms.... And the local risks would be known... Hmmm... What about the large and international contractors who work projects worldwide? Their risk analysis on standard terms of contracts are based on known clauses - and when tendering they allow for any special amendments thereto when checking the documents. From the conversations above, they are now also expected to know the local laws of each country they tender in...? Hmmm... A point raised above: if a contract is "effectively amended impliedly by the governing law, then the truly valid Contract is the amended version" - surely then the engineer should be issuing a variation incorporating the implied amendment into the contract?! (and effectively create new T&Cs different to the original agreed contract) Hmmm... This would certainly keep him busy with the law instead of the contract... For the lawyers, I always thought that if one party makes an agreement or contract with another party, then that agreement or contract once signed and accepted by both parties is binding. From the sounds of things above, it would seem then, that if one party doesn't then like what they signed, It can then use a local law to get itself out of the contract - I think I raised the point above, that this is then not playing on a level field as that party has a distinct and unfair advantage and knowingly entered a contract they knew they could break... This brings me back to administering the contract - the engineer should (here i'll insert) "fairly and impartially" determine his decisions based upon the T&Cs of the contract, not local law (other than those already incorporated and spec'd into the contract docs). There are clauses within the contract to allow for a party to proceed to local law if this becomes necessary...

An aside here: It has been known to happen in some countries that when one party tries to rely on local laws to win an argument in their favour, that a local judge has actually gone back to the original agreement and enforced what was agreed upon between the parties, even if this violates the local law. (Rare but not unknown!) Ok, this should become interesting now,...
15 days ago Like

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Andy Reid Hi Clarence, sorry just seen your latest post... Your last point about one-sided contracts. If one party 'knowingly' agrees to a one-sided or biased contract and has priced accordingly, often that agreement will be upheld. That party has balanced his risk (usually by price) and has accepted the terms knowingly and should not (i am not saying 'can not') then attempt to redress it through law... as this might then bite him in the proverbial (see my aside above)...
15 days ago Like

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Clarence Elmer Quismundo Hi Andy, Interesting scenario indeed. I'll stir the pot further. What if the Contractor, knowing that the contract is one-sided, signed it anyway due to his inferior bargaining position (a condition often exploited by cunning Employers during hard economic times), with the simple purpose to survive in the industry by securing the project without factoring this risk in his price? If he adds something, then he faces the greater risk of losing the project in an increasingly competitive bidding process where Employers' primary objective is get the lowest bid first and foremost. What would be the Contractor's recourse then? Is it fair for him to prove that his inferior leverage was exploited by the Employer to entice him in signing a one-sided contract? Since he cannot win the battle using the one-sided contract, then he must be entitled under the law of the land or otherwise just roll over and die. The poor Contractor is left with 2 undesirable options and he is to pick his own poison then. So it goes back to reasonable beings to act ethically, not taking advantage of the other, and acting in good faith to give what is properly due. But can we do that (i.e., "f__k the unjust law and simply work out a compromise with the other party)? I would like to hear additional suggestions from our other friends here. Best regards.
15 days ago Like

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Andy Reid Hi Clarence, Using your scenario, the contractor would enter a one-sided contract,... Then what often happens is he uses inferior materials, etc., to cut corners in order to try nd meet his price... So both parties lose and end up paying more in the long term. Best advice is not to enter the contract if one-sided OR make sure you price accordingly. And it's also good business sense, using your scenario, to cut ones losses before making things worse... Lets hear what the others have to say???
14 days ago Like

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Clarence Elmer Quismundo You hit the nail on the head there, Andy. That's exactly what is happening to our local projects. A Contractor would have to earn his keep or risk closing down his business. So if he has no legal or contractual recourse, the best way to cut his losses are on the materials (inferior quality) and manpower (low salary, the norm in our local construction industry who is consistently rated among the lowest payers here and thus the main cause why we Filipinos are among the top exporters of construction manpower in the world). It's the painful reality here. I am simply fortunate to have an above average paying local job for now, but who knows what the future holds? Yes, I would also like to see what the others have to say. Best regards.
14 days ago Like

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Volker Motzkus After having read what was said, I feel I must also provide my own "two cent's worth", as it was impeccably put by Clarence: I do not see a "law vs contract" conflict as such. The APPLICABLE law is supposed to supplement the contract, not replace it. If the applicable law does not contain provisions for allowing that, then somebody did a very poor job indeed of drafting the contract, and choosing that law in the first place. In other words: The applicable law is supossed to (a) provide guidance on how to interpret the contract, and (b) fill in the cracks. If the contract was drafted properly, there will not be a conflict.

If the law of the land collides with the apliccable law, well, that's another story. Us continental european types have it rather easy there, what with administrative law being a distinct branch of law that will most certainly apply anyway, it even says so in the FIDIC contracts, sub-clause 1.13. In most legal systems I know of, it is not enforceable to order something illegal (or immoral). In other words: If the contract demands something that is not in compliance with the law of the land, the contractor can ignore that order, regardless of what the contract says, because it would be illegal to execute on the site, and that is something that you cannot demand from a contractor. of course, this shifts the question to "how do I test for this...". I'm afraid it means that at least a basic concept of what the local law will or will not allow must be asked of the engineers, but most of the time, it is rather obvious what is permissble, and what isn't. The fine points of contract execution usually do not concern the local law (administrative law being mainly concerned with buildings not falling over or burning down and such), and that is where the contract, as interpreted by the applicable law, will shine. As always, exceptions exist. That's where us lawyer types earn money. Hope this helps Volker
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Andrew Tweeddale @Andy. It's not as simple as "the engineer should follow the laws of the land and then the contract." Many laws will contain both mandatory and non-mandatory provisions. Where there is a mandatiory provision then the parties cannot contract out of that law. If the provision is non-mandatory then the contract will prevail if it is in conflict with the law. An example, I hope, explains this. Many forms of contract (although not FIDIC) provide that when a Final Certificate is issued then the Contractor's liability under the contract will cease. However, in many countries there are mandatory laws that the Contractor (as well as Engineer or other Designer) will be liable for defects in a building for 10 years. There is clearly a clash between the contract and the law - and in this case the mandatory law will prevail. A further example shows the opposite effect - some laws will imply a term of fitness for purpose for goods supplied. However, where the parties expressly agree a lesser obligation then this will prevail over the implied term because the implied term is not a mandatory provision of the law. With good contract drafting many of these problems should be ironed out before the contract is signed and the Engineer should not be faced with legal provisions which conflict with the contract. However, even with the best legal drafting there will always be disputes which involve some issues of law. I am also of the view that the Engineer does not have to be a legal expert. It would be ridiculous to suggest he is. Similarly, it would be ridiculous to suggest that a construction lawyer should be as knowledgeable about engineering as an Engineer. It is the parties that submit claims and the parties are required to prove their claims. If a contractor

asserts that "time is at large" and produces no evidence to support its assertion then its claim should be dismissed. Equally where a contratcor provide substantial evidence to support its contention and this is not denied by the Employer then the contractor should succeed. Unfortunately - and far too often - the Engineer thinks he is the mouth piece of the Employer and goes off and tries to prepare a defence for the Employer. Where the Engineer has to make a fair Determination under s.cl 3.5 then he simply cannot do this.
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Flvio Roberto Naval Machado I think I concur with most of what Andrew is saying. Let's keep it simple: Im a lawyer but even me I dont want to see lawyers everywhere!!! The contract (whether bespoke, a form or other) is negotiated to stand over local law (and not the opposite). It is only fair that the Engineer expects that a NEGOTIATED contract, reviewed by lawyers, to be legal. Yes, there are local laws that the text of the Contract cannot change. This is expected to be corrected during the negotiation period before the contract is signed/executed. If a matter (any matter, but normally they come out of claims based on local laws) appears and doubt is raised based on the interpretation of a contract disposition vis-a-vis local laws: call a local lawyer! Other than that, we, lawyers have already enough competition among ourselves! Please bring the engineers in!!!
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Flvio Roberto Naval Machado (***) Just correcting my comment above: "Other than that, we, lawyers have already enough competition among ourselves! Please DONT bring the engineers in!!!"
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Andy Reid The odd thing about playing devils advocate is the return trip! Having gone back over the comments above, and looking at the original question posed, it would appear that the consensus is that the engineer makes his determination based on the contract, and leaves any potential conflict with the local laws to be decided by arbitration/the courts. Pls correct me if my view of the above is wrong.
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Flvio Roberto Naval Machado @Andy, I agree and concur with the first part, including, specially, the return trip back from playing devils advocate (I could not express myself better, pardon if I now on adopt that as my own). Now, in what comes to the second part and litigation, I am not sure you are talking serious about this but dont. When contract discussions start to mention the law, let local lawyers that are used to using safety boots, glasses and helmets in...
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