Legal to Prorate Charge Then Charge Again
Back charges in construction do
Credit: Shutterstock
J B Kim
Blackrock Expert Services, London
Dukgeun Yun
Al Tamimi & Co, London
In the construction industry, uncertain economical climates, such as that acquired by the Covid-xix pandemic, can cause constraints on cash flow and potentially negatively affect liquidity across global supply bondage. Equally such, employers have sought to rely on their contractual rights to avoid or delay payment. Equally a outcome, contractors and subcontractors are existence faced with a lack of cash menstruum; information technology has regularly been stated that 'greenbacks is the lifeblood of the structure manufacture'1 resulting in issues with non-payment, belatedly payment or underpayment.
In guild to ensure cashflow, contractors may have a correct to interim payments. Whereas employers may have a right to ready-off or withhold sums due in the contractor'south interim payment applications to embrace services performed by themselves, or costs incurred in relation to the contractor's piece of work a procedure is ofttimes referred to as back charge.
This commodity briefly introduces interim payments and ready-off in the construction context it then details aspects of back charges in the common law jurisdictions of Canada, the UK and the US.
Introduction to the right to an acting payment and gear up-off
Under the full general principle of contract law in the Uk,a party does not accept a right to merits interim or partial payments as role of the agreed sum of the contract, unless at that place is a contractual agreement or statutory right.two
In the context of construction contracts, the utilise of interim payments is a standard means of ensuring cash flow for contractors and subcontractors alike. The purpose of acting payments is to save the contractor/subcontractor of the burden of financing the whole of the works until completion – works that may have many months or years to complete. It is incorporated into all standard construction contracts (FIDIC, JCT, NEC, ICE and the similar) and statutes in the Britain (the Housing, Grant Structure and Regeneration Deed (HGCRA) 1996 as amended by Part 8 of the Local Democracy, Economic Evolution and Structure Act (LDEDCA) 2009, section 109 'Entitlement to stage payment').
According to RICS guidance notes,3 several methods and mechanisms are used for contractual agreements for acting payments. These include the utilize of the bill of quantities, priced activity schedules, milestone payments and contract sum analysis. The periodic intervals applicative to interim payments can also be contractually agreed, such equally bi-weekly, monthly (the nigh common interval), every 3 months, quarterly so on.
When an employer or contractor encourages the procurement of materials and equipment at the early on structure stage, construction contracts allow the contractor or subcontractor to utilize for payments for materials and equipment delivered at the construction site or some other agreed location before installation, which is often referred to every bit a payment for 'textile on site'. Generally, the employer or contractor is then entitled to inspect the stored materials and equipment to verify the quality and ensure that materials take been suitably stored and insured, before making payment.
The US appellate courtroom held that 'A set-off (sometimes called contra charging) is a counter need which a defendant holds against a plaintiff, arising out of a transaction extrinsic of the plaintiff'south cause of activeness.'four
There is ofttimes confusion between abatement and gear up-off. Abatement is used as a means to reduce a contract price in circumstances where full payment may not necessarily be justified. For example, if a subcontractor failed to bear out works to an acceptable standard and the value of the works was diminished, the contractor would take grounds to reduce the amount owed on the basis of the difference in value.5 The mensurate of abatement is 'how much less the subject-thing is worth',so the measure out of the abatement cannot exceed the total of the sum to which it is applied.vi Since an abatement applies only to matters that go to reduce the value of the work performed, information technology cannot apply to a counter-claim for a delay in the execution of the works, which would be a matter of set-off.seven Information technology is also well established that abatement cannot use to a merits for professional services.8
Set-off has a wider application than abatement given that it could be a remedy for alienation of contract, for example, applying to a counter-claim for recovering costs in relation to the costs of the filibuster that were incurred or rectifying defective works.ix From a breakthrough perspective, while the measure out of abatement cannot exceed the contract sums, ready-off, equally a course of counter-claim for damages, may exceed an agreed sum.
In the UK, the right of set-off exists nether mutual law. In Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd,10 the House of Lords held:
'Information technology has been a well-sealed principle of law since the heart of the concluding [19th] century that when a merits is made for the price of goods sold and delivered or work and labour done, the defendant is entitled to set-off or gear up against the amount claimed any amercement which he has suffered as a consequence of the plaintiff's breach of the contract under which the appurtenances were sold and delivered or the work and labour were done.'
The Business firm of Lords11 held that the contractor was entitled to set-off unless there were clear terms excluding it. The House of Lords refused the subcontractor'south argument that set-off cannot be exercised to prevent cashflow from existence impeded, which causes significant impacts in the construction manufacture. Therefore, this judgment allowed contractors to refuse the total payment to subcontractors by insisting set up-off, which caused cashflow constraints in the construction industry. Thereafter, the Great britain construction industry experienced a substantial corporeality of bankruptcies amid subcontractors in the 1980s and 1990s. The unregulated ready-off was criticised, among others, by the Latham Study, Amalgam the Team (1994), which triggered the legislation of the HGCRA 1996 regulating the right to set-off under sections 110 'Dates for payment' and 111 'Requirement to pay notified sum'. After sections included 110A 'Payment notices: contractual requirements' and 110B 'Payment notices: payee's observe in default of payer'south notice' and were inserted by the LDEDCA 2009.
Correct to dorsum charge
What is a back charge?
Structure projects are rarely completed without a contractor facing some issues with a subcontractor or vendor, such as poor quality of work, tardily delivery and abandonment of the project. The contractor may take a contractual or legal mechanism to resolve such issues themselves instead of the subcontractor, who should accept fixed the issues first-paw, and charged the subcontractor for any direct and unanticipated costs incurred. In the construction manufacture this process is often called 'back charging'.
A back accuse, in which in that location is a deduction from a subcontractor'due south payment for a contractor's unexpected costs in relation to the subcontractor's works, can be claimed as a form of set-off or counter-claim. A back charge is basically the claim for unexpected costs: 'information technology is billings for piece of work performed or costs incurred by 1 party that, in accordance with the agreement, should accept been performed or incurred by the party to whom billed'.12
Under the police force of contract in the Uk, contracts provide the opportunity to recover damages when one party fails to perform. The starting betoken for the damages is: '[T]he rule of the common law is that where a party sustains a loss by reason of a breach of contract, he is, so far as coin tin can do it, to exist placed in the same situation, with respect to damages, as if the contract had been performed.'thirteen This principle also applies to back charges.
Back charges can arise due to a variety of reasons, including:
• defective works or materials;
• delay to the works – a contractor might prepare-off the appropriate corporeality of liquidated damages in accordance with the contract;
• harm to a jobsite and cost of repair; and
• clean-up costs incurred to maintain worker prophylactic or compliance with the regulations surrounding wellness, safety and the environment.
From the authors' review, information technology appears that the most frequent reason for a back charge arises from lacking works. Hudson defined that
'lacking work is work which fails to comply with the requirements of the contract and so is a breach of contract. For big structure or technology contracts, this volition mean work which does non conform to limited descriptions or requirements, including any drawings or specifications, together with whatever unsaid terms as to its quality, workmanship, operation or blueprint.'14 Many standard forms of contract do non provide the definition of defects (ie, FIDIC),fifteen and so this volition mean that whether or non work is defective tin be influenced by local law and practice and will therefore vary in different jurisdictions.16
A dorsum charge, in which in that location is a deduction from a subcontractor's payment for a contractor'south unexpected costs in relation to the subcontractor'south works, tin exist claimed every bit a course of set-off or counter-claim
Under Uk law, there are quite significant legal issues relating to the contractor'due south obligations as to the quality of materials, workmanship and design (by and large fit for purpose obligations) and the construction professional's liability (by and large reasonable skill and care obligations). Further discussion is outside the telescopic of this article.
A back charge, in the context of this article, is coin withheld by a contractor which relates to the payment to a subcontractor to comprehend services claimed to have been performed, or costs incurred by the contractor relating to the subcontractor'southward piece of work.
From the perspective of the contractor, it is necessary to recover the unexpected costs incurred due to the subcontractor'due south defective and/or delayed works. From the perspective of the subcontractor, they may country that the back charges are unfair when there is no:17
• prior find of defective piece of work;
• time to investigate whether the work is lacking;
• time allowed to gear up the piece of work;
• documentation that the toll of the back accuse is appropriate and due to the lacking piece of work; and/or
• payment of other money until back charges are accustomed.
The Canadian judgment, Touch on Painting Ltd v Man-Shield (Alta) Construction Inc, 2017 ABQB 743 (CanLII), provides substantial considerations for resolving differences and disputes between contractors and subcontractors related to the in a higher place problems.
Bear upon Painting Ltd v Man-Shield (Alta) Construction Inc
In the recent decision of the Courtroom of Queen'due south Demote of Alberta in Canada, Impact Painting Ltd five Man-Shield (Alta) Construction Inc,eighteen the Court dealt with disputes arising from back charges, and provided guidance in relation to them.
Homo-Shield was the contractor on a retirement customs construction projection in Edmonton. Impact Painting was Man-Shield's subcontractor for the painting and wallpaper installation.
Impact issued a number of invoices to Man-Shield for 'extra works', for which no written variation orders had been issued. Man-Shield rejected the majority of those invoices. Consequently, Touch commenced an action against Man-Shield to seek payment for the actress work and other unpaid amounts.
The general measure of damages for breach of contract when a contractor has provided less than full operation, or has provided defective work, is the price of curing the defective condition
Man-Shield made a counter-claim against Impact in the sum of approximately CAD 209,000 for 12 heads of back charges for the expenses incurred which they had issued to Bear on during the currency of the contract.
The Court held that a political party claiming to be entitled to a back accuse must run across a 'four-stage test':19
'In my view, the onus is on the party claiming a back accuse to prove that:
one. The back accuse is for an expense actually, necessarily and reasonably incurredby the party claiming the dorsum charge.
2. By the terms of the subcontract, or by some other agreement between the parties, the charge is ane, or is in relation to some task, for which the subcontractor undertook responsibility.
three.The general contractor incurred the expense because the subcontractor defaulted on the responsibility to which the charge relates.
iv. Prior to incurring the charge, the general contractor gave detect to the subcontractor of its default and a reasonable opportunity to cure it.' (emphasis added)
It is submitted that the iv-stage test appears to be very onerous, with hurdles to overcome in guild for a contractor to exercise a back charge, details of which are set out below.
Stage ane: 'The dorsum charge is for an expense actually, necessarily and reasonably incurred past the political party claiming the dorsum charge.'
In the US, when the subcontractor performs defective piece of work, the contractor is generally entitled to recover, as the principle of damages, the corporeality of money that will reasonably recoup the contractor for the impairment resulting from the lacking works.twenty
Although loss and expense are deemed to be equivalent to damages for breach of contract,21 Stage 1 in the Impact case only "referred to expenses 'which are actually, necessarily and reasonably incurred'. It is not articulate why the judge referred only to an expense for the scope of dorsum charges only information technology is submitted, given the facts of the instance, that just expenses tin be claimed by the defendant; the judge in the example does not need to refer to loss.
For the claiming party to seek to recover consequential amercement in terms of loss, such as lost profits, lost use or lost rent, and in the U.s., in guild to recover funds for these declared, the employer must prove the post-obit:22
• it was foreseeable to the parties when they entered into the contract that these damages would probably result if the contract
was breached;
• these damages were in fact acquired by the contractor's lacking/incomplete structure; and
• the amount of damages.
The first two elements are related to stages 2 and 3, and then will be discussed later. In relation to the amount of damages, the mensurate of damages will exist either the cost of cure, or diminution in value as well as the availability of consequential damages for lacking constructions.23
Cost of cure
The general mensurate of damages for breach of contract when a contractor has provided less than total functioning or defective piece of work is the price of rectifying the defective condition.24 This measure out is advisable unless the toll of repair would be grossly disproportionate to the results to be obtained or would involve unreasonable economic waste, in which case the diminution in value rule applies.25
Diminution in value
Usa police recognises that even though piece of work can deviate from contract requirements, information technology would crave swell waste product to remove and replace the work that has been performed.26 In such cases, 'diminution in value' is the advisable measure out of damages to compensate the client. A 'diminution in value' measure of damages is appropriate when the following occurs:27
• the contractor failed to perform its works in strict compliance with the contract;
• the piece of work performed past the contractor resulted in an unusable project; and
• the cost to remove and replace the piece of work to the form required by the contract would upshot in unnecessary waste matter or very loftier cost.
The quantum adding is the contract price minus the value of the piece of work actually performed,28 which is a form of abatement.
In the U.k., Ruxley Electronics and Construction Ltd five Forsyth 29 was concerned with the choice between an award of damages being either the 'cost of cure' or 'loss of amenity'.
Ruxley agreed to build a swimming pool in Forsyth'southward garden. The contract specified that the pool would have a diving expanse of seven-foot 6-inches deep. When constructed, the diving area was only six-feet deep, which was however a condom depth for diving. Still, Forsyth brought an action for a breach of contract claiming the cost of having the pool demolished and rebuilt, beingness the 'cost of cure', at a sum of £21,540.
At showtime instance the judge rejected the claim for 'cost of cure' damages on the grounds that it was an unreasonable claim in the circumstances and awarded Forsyth 'loss of amenity' of £2,500. This award was reversed by the Court of Entreatment, which held that amercement should be awarded at the corporeality required to place Forsyth in the aforementioned position as he would have been had the contract been performed, which in the circumstances was the cost of demolition and rebuilding the pool as specified.
Ruxley appealed and the House of Lords allowed the appeal, upholding the judge's honor of £2,500 for 'loss of amenity'. Lord Lloyd said:
'Does Mr Forsyth'due south undertaking to spend any amercement which he may receive on rebuilding the puddle make any difference? Clearly not. He cannot be allowed to create a loss which does not exist in order to punish the defendants for their alienation of contract. The basic rule of damages, to which exemplary damages are the only exception, is that they are compensatory not punitive.'xxx
Lord Mustill held that bounty should be reasonable, maxim:
'[t]he exam of reasonableness plays a central part in determining the basis of recovery and will indeed exist decisive in a example such as the present when the cost of reinstatement would be wholly disproportionate to the non-budgetary loss suffered by the employer.'31
United states law recognises that even though piece of work tin deviate from contract requirements, information technology would crave groovy waste to remove and supersede the work that has been performed. In such cases, 'diminution in value' is the advisable measure of damages to compensate the customer.
The FIDIC Yellow Volume 1999 edition clause eleven.4 provides both remedies as employer's options, equally follows:
'If the Contractor fails to remedy the defect or harm by this notified appointment and this remedial piece of work was to exist executed at the cost of the Contractor under Sub-Clause 11.2 [Toll of Remedying Defects], the Employer may (at his option):
(a) carry out the work himself or by others, in a reasonable fashion and at the Contractor's price, but the Contractor shall have no responsibility for this piece of work; and the Contractor shall subject field to Sub-Clause 2.five [Employer's Claims] pay to the Employer the costs reasonably incurred by the Employer in remedying the defect or damage;
(b) require the Engineer to agree or determine a reasonable reduction in the Contract Price in accord with Sub-Clause 3.v [Determinations]'. (accent added)
Stages 2 and three
In relation to Phase ii, the charge is one, or is in relation to some task, for which the subcontractor undertook responsibility. Stage iii
is where the general contractor incurred the expense because the subcontractor defaulted on the responsibility to which the charge relates.
In Bear on Painting Ltd five Man-Shield (Alta) Construction Inc,32 stages ii and 3 are related to the issues of causation.
As regards causation, under the principles in relation to causation in the Britain, a claimant can recover damages only if a breach of contract has acquired damages. Information technology is not plenty to fence that there is a breach of contract and the existence of damages: the damages must exist a 'event' of the breach. In other words, in a civil instance, the claimant must constitute or prove them on the principle of the 'residue of probabilities',33 pregnant in that location is a linkage between crusade (alienation) and effect (damages), which is referred to equally 'proof of causation'. Causation can be divided into 2 categories: 'causation in fact' and 'causation in law' (or remoteness).
Causation in fact
Under the law of contract in the UK, a 'merely for test' unremarkably has to be implemented to prove causation in fact.34 The question is 'if there is no defendant mistake, will the claimant still endure the loss?' When the answer is 'no', then the defendant volition be liable.
Meticulous documentation appears to be essential for both contractors and subcontractors. Keeping detailed records will help to back up or debate any back charges.
However, a 'merely for test' has its limits. In the Great britain, if a claimant and defendant are responsible for the competing causes (concurrent causes), the 'but for' test volition non apply, and the 'dominant cause test' is not accounted to be applicable in this instance.35
Causation in law: remoteness
Under the rules of remoteness of impairment in contract law, set up out in Hadley 5 Baxendale, 36 a claimant may only recover losses that may be reasonably considered as arising naturally from the breach (the beginning limb/leg). The get-go limb is sometimes referred to as an objective examination, or those that may reasonably be in the contemplation of the parties when entering into a contract (the 2d limb/leg), which depends on additional special cognition by the accused; the second limb is sometimes referred to every bit a subjective test.
In the subsequent instance of Victoria Laundry (Windsor) Ltd five Newman Industries Ltd, 37 a ordinarily expected loss of profit was accounted recoverable. Still, exceptionally lucrative loss of turn a profit recovery was not allowed since information technology was non in the reasonable contemplation of the parties.
If the type of loss acquired by the breach of contract is inside the reasonable contemplation of the parties, the magnitude/extent of the loss does non thing subject to a duty to mitigate.38 Hudson stated: 'foreseeability is generally considered to exist concerned with the type of loss, non its corporeality.'39
Degree of certainty
It is a general principle that the claimant should prove the merits with sufficient certainty. In Lisbon v U.s.a., 40 the United states Federal Court of Claims stated the principle:
'[C] bears the brunt of proving the fact of loss with certainty, as well as the burden of proving the amount of loss with sufficient certainty so that the determination of the corporeality of damages volition be more than than speculation.'
In both the US and the Great britain, the courts take recognised the dangers of encouraging as well detailed proof of causation with absolute certainty.41 On the other hand, the courts accept as well been careful to adopt a deliberately pragmatic and common-sense approach.42 The claimant must prove the extent of losses with reasonable certainty using civil police standards, examining a 'preponderance of the bear witness' in the U.s.a. and a 'balance of probabilities' in the UK, respectively.43 Whether or not the evidence advanced past the claimant meets the reasonable certainty rule is a matter of fact.44
Bailey45 commented on the dubiety issue, analysing a serial of English and Australian case police force stating that:
'[i]t is difficult to calculate with whatever precision the extent of the innocent party's loss or impairment, the court will do its best to arrive at an advisable award of damages, even if this involves elements of speculation or guesswork.'
Past applying the full general principles of United kingdom of great britain and northern ireland law in conjunction with the stage 2 and 3 tests of the Impact case, it is submitted that it is crucial to evidence with sufficient testify that remedial works past the contractor were caused by the subcontractor in question, and back accuse amounts were incurred direct by that specific subcontractor. The type of back charge should be foreseeable, and the claimant must prove the extent of back charge with reasonable certainty.
In the U.s.a. case of Great Western five Role Construction, 46 the Court ruled that it was the contractor'southward responsibility to establish the fact that the subcontractor'south defective piece of work was indeed tied to the back accuse.
Meticulous documentation appears to exist essential for both contractors and subcontractors. Keeping detailed records will assistance to support or fence any dorsum charges. For the contractor, information technology will exist imperative to include as much detail as possible when sending a observe of defective work, such every bit a Not-Conformation Written report, an Inspection Written report, quality test results and the like. If the subcontractor decides to take remedial action, it will exist of import to take progress photos for the records. If the subcontractor does not cure the defects, it's essential to continue the invoices and timesheets regarding the back charges separately to provide to the subcontractor/vendor on completion. Information technology is besides good practice to make a split up defect-related account for booking the costs incurred in the cost ledger. From the perspective of a subcontractor, the subcontractor should also document all phases of the work performed past themselves.
In the absenteeism of evidence, the contractor may contend that it is impossible or impractical to trace dorsum which subcontractor made a fault when many subcontractors are involved, which is highly probable in the construction industry. The contractor may attempt to allocate the overall incurred costs pro rata to each subcontractor. In the US case of Great Western Drywalls v Roel Structure, 47 when the clean-up costs were the event, the Court upheld the contractor's right to assess make clean-up costs confronting a particular subcontractor. Nevertheless, the Court ruled the costs could not be calculated pro-rata dorsum to each subcontractor but had to exist specific to each contractor's responsibility for make clean-up costs.
Stage iv: Prior to incurring the charge, the full general contractor gave notice to the subcontractor of its default and a reasonable opportunity to cure it
Stage 4 appears to exist principally concerned with notice requirements to implement a right to back accuse.
In relation to notice requirements between the employer and the contractor, the FIDIC Yellow Book 1999, clause 11.iv states:
'If the Contractor fails to remedy whatsoever defect or harm within a reasonable fourth dimension, a engagement may be stock-still by (or on behalf of) the Employer, on or by which the defect or damage is to exist remedied. The Contractor shall be given reasonable notice of this date.'
From the subcontractor's perspective, similar the FIDIC conditions, the farm shall provide reasonable observe provisions, pregnant if and when the contractor finds the defective works, the subcontractor shall be notified and provided with a reasonable amount of time to right, repair or make clean upwardly any bug caused past the subcontractor'southward work. The reasonable amount of time volition be a matter of fact. A best-recommended exercise is to have any dorsum charge-related find requirements explicitly stated in the subcontract.48
This research has establish that in the United states, an approach/guidance/standard subcontract form to construction back charges is provided by the Associated Schools of Construction, the Associated General Contractors, and the American Subcontractors Association (ASA).
The standard forms mostly state that a contractor must first provide notice before any back charges are incurred. Secondly the subcontract requires another written notice to be sent seven days after the services or materials were provided. Finally, the contractor must provide a written compilation of the charges by the 15th day of the following agenda month.
The ASA recommendations are the most favourable to subcontractors:
'No back charge or claim of client for services shall be valid except by an agreement in writing by subcontractor before the work is executed, except in the case of subcontractor'southward failure to meet any requirement of the subcontract. In such upshot, client shall notify subcontractor of such default, in writing, and allow subcontractor reasonable fourth dimension to correct any deficiency earlier incurring any costs chargeable to subcontractor. No back charge shall be valid unless billing is rendered no afterward than the 15th day of the month following the charge being incurred. Furthermore, whatever payments withheld under a claim of subcontractor default shall be reasonably calculated to recover the anticipated liability and all remaining payment amounts non in dispute shall exist promptly paid.'
The consequence of failure or noncompliance of the notice and providing the opportunity to cure is not clear in the judgment of Impact Painting Ltd v Man-Shield (Alta) Structure Inc.49 The consequence can be either to condone the whole entitlement of the dorsum charge or deduct the breakthrough of back charges.
In the U.s.a., the Tennessee Court of Appeals50 has held that
'the common-constabulary is that one should requite notice designed to allow the defaulting party to repair the lacking work, to reduce the damages, to avoid boosted defective performance and to promote settlements of disputes.'
The Court of Appeals held that the defendant's counter-merits was properly dismissed where a defendant 'failed to give Plaintiff observe and an opportunity to cure the declared construction defects pursuant to the common-police'. Many states in the US have enacted 'right to cure' statutes that require notice and an opportunity to cure prior to commencing litigation.51
Decision
In the construction industry, contractors may have a correct for acting payments, which is against the common police force principle in the Great britain prohibiting interim or partial payments.
Under the common law, employers have a right to set up-off or withhold sums due in the contractor's merits for acting payments or last payment in the UK. However, the HGCRA has regulated the employer'southward action for set up-off or withholding payments to secure cashflow in the industry.
Contractors may claim back charges to cover services performed by themselves or costs incurred in relation to the subcontractor'south work in the course of gear up-off or counter-claim confronting the subcontractor'due south claim for interim payments or final payment.
The Canadian Court provides some considerations and guidance for back charges. A notice may exist the first step and crucial requirement for a back charge; this is to ensure the subcontractor's right to cure the defect. When the subcontractor resists the contractor's request to cure the defect, then the contractor may cure the defect by themselves at the expense of the subcontractor. The remedy is generally based on 'cost of cure'. The courts, however, may test the reasonableness of the cost and then apply 'diminution in value' principle. The contractor should prove that the blazon of back accuse is tied to the subcontractor'due south works and is foreseeable. The contractor should prove the causation with reasonable certainty.
Notes
1 Equally Denning LJ noted in Modern Technology (Bristol) Ltd 5 Gilbert-Ash (Northern) Ltd (1973) 71 LGR 162.
2 Meet Cutter v Powell (1795) 101 ER 573.
3 RICS (2015), Interim valuations and payment, 1st edn London, see world wide web.rics.org/uk/upholding-professional-standards/sector-standards/construction/black-book/acting-valuations-and-payment, accessed 27 January 2021.
ivM D Masonry v Universal Surety Co, 6 Pecker App 215 (Nib Ct App 1997).
5 'Set off & Abatement – which is which?' (Blake Newport, 22 June 2012), run into https://blakenewport.wordpress.com/2012/06/22/set-off-abatement-which-is-which-2 accessed 27 January 2021.
6 S Furst, V Ramsey, and D Keating, Keating on construction contracts (10th edn, Sweet & Maxwell 2017) paras xix-111.
7Ibid.
8Ibid. paras 19–112.
9Ibid. paras 19–113; see Set up off & Abatement, n5, above.
xGilbert-Ash (Northern) Ltd v Mod Engineering science (Bristol) Ltd(1976) one BLR 73.
11Ibid.
12 Facilities and Campus Services, 'Glossary of Construction Terms' (2005, Cornell Academy) see https://operations.fs.cornell.edu/info/ir_glossary.cfm, accessed 10 November 2020.
13Robinson v Harman(1848) one Ex Rep 850 at 855; Ruxley Electronics and Construction Ltd v Forsyth [1995] UKHL eight; n six in a higher place paras 19–003.
14 Nicholas Dennys and Robert Clay (eds), Hudson's Building and Applied science Contracts (13th edn, Sweet & Maxwell 2015) para 4–71.
fifteen In accordance with NEC third edn Contract, a 'defect' is part of the works which is not in accordance with the Works Information or a office of the works designed by the Contractor which is not in accordance with the applicable law or the Contractor'southward pattern which the project Manager has accepted.
16 See n 14 above, para four–072.
17 Bruce Suprenant, 'Watch Your Back Charges' (The Phonation Newsletter, 2018) see https://ascconline.org/Portals/0/Technical-Article-Mar-2018_WebSC.pdf?ver=2018-03-xix-093300-573 accessed 27 January 2021.
xviiiBear on Painting Ltd v Human being-Shield (Alta) Construction Inc2017 ABQB 743 (CanLII).
19Ibid, para 28.
20 See M Beutler, E Gentilcore, Model Jury Instructions: Construction Litigation, (2nd edn, ABA 2015) s 10.03.
21Wraight Ltd v PH&T (Holdings) Ltd(1968) xiii BLR 29.
22 Meet due north 20 above 10.06.
23 See n twenty higher up 10.03.
24 See n xx to a higher place ten.04.
25 See n 20 above x.03–10.05.
26 See n 20 above 10.05.
27Ibid.
28Ibid.
29Ruxley Electronics and Structure Ltd v Forsyth[1995] UKHL 8.
30Ibid.
31Ibid.
32 See northward 18 above.
33 The balance of probability standard ways that a court is satisfied an event occurred if the courtroom considers that, on the evidence, the occurrence of the event was more than likely than not, which is oftentimes said to be more than 50 per cent.
34Orient-Express Hotels Ltd v Assicurazioni Generali SA[2010] EWHC 1186.
35 V Moran, QC, 'Causation in structure police: The demise of the "dominant crusade" examination?' (2014) SCL Newspaper 190.
36Hadley five Baxendale(1854) ix Ex Ch 341.
37Victoria Laundry (Windsor) Ltd v Newman Industries Ltd[1949] ii KB 528.
38Transfield Shipping Inc five Mercator Aircraft Inc [2008] UKHL 48; Parsons v Uttley Ingham [1978] QB 791.
39 See n 14 above, para 7–003.
40Lisbon five U.s.(1987) 828 F 2d 759, 767.
41 See n xiv above, para 7–002.
42Ibid.
43 J Bailey, Construction Law (second edn, Informa Law 2016), thirteen.99; J Sweet and Marc G Schneier, (7th edn, Thomson 2004), 5.11.B; T J Kelleher and One thousand Walters, Mutual Sense Structure Police Smith (fourth edn, John Wiley & Sons2009), 465; see n 14 above para 7–002.
44Walter Lilly five Mackay[2012] EWHC 1773 (TCC) at 486.
45 See Bailey, n 43 above, para xiii.100.
46Great Western Drywalls v Roel Construction166 Cal App fourth 761 (2008).
47Ibid.
48 FIDIC Yellow Book (1999 edition), clause eleven.4 states: 'If the Contractor fails to remedy any defect or harm inside a reasonable time, a date may be fixed by (or on behalf of) the Employer, on or by which the defect or damage is to exist remedied. The Contractor shall be given reasonable notice of this appointment.'
49 See n xviii above.
50Bates v Benedetti, E2010-01379-COA-R3-CV, 2011 WL 978195, at 7 (Tenn Ct App 21 Mar 2011).
51 See n 20 higher up, 10.02.
JB Kim is a managing consultant at Blackrock Good Services, London, and can be contacted at jbkim@blackrockx.com. Dukgeun Yun is a senior acquaintance at Al Tamimi & Co, London and can be Dg.Yun@tamimi.com.
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