2022-04-22（219）Engineering law and the ICE Contracts

12. PAYMENT TO CONTRACTOR “SUBJECT TO CLAUSE 52 (4)”—dealing with notice of money claims.

13. PAYMENT “IN ACCORDANCE WITH CLAUSE 60”—i.e. included in interim and final certificates, and subject to retention.

14. PAYMENT TO CONTRACTOR OF “SUCH COST AS MAY BE REASONABLE”. See p. 31, N. 18, as to overheads and exclusion of loss of profit. Under the previous edition the contractor’s claim for delayed documents is mainly for breach of a term implied into the contract, and compensation for such breach of contract includes loss of profits (p. 427). This clause appears to be intended as a comprehensive provision dealing with the contractor’s remedy for delayed instructions or drawings, so that there is no room for implication of any other term dealing with compensation for delay (p. 42).

The clause therefore, by removing the right to loss of the profits he would have earned if his resources had not been kept on the site by the delay, seriously limits the contractor’s remedy for delay or disruption due to late supply of drawings or instructions, but not, e.g., delay in inspecting works under cl. 38 or by other contractors employed direct by the employer (but as to a suspension order see p. 131, N. 4). For disruption due to variations see the next note.

In view of this restriction on his rights, the contractor should keep in mind the one remnant of his rights under the ordinary law, that is the right to end the contract in the case of serious or indefinite delay and to recover full damages which may include loss of profit (p. 427). In the case of delay lasting four months the contractor’s specific rights under cl. 40 (2) may be useful, including as they probably do a right to lost profits where the whole works are treated as abandoned because of suspension.

It is possible, although unlikely, that the Unfair Contract Terms Act 1977 may improve the contractor’s right to compensation for delay—p. 432.

It is clearly not “reasonable” to award costs incurred because of the contractor’s inefficiency, a problem discussed on p. 442. For another example of unreasonable costs see p. 82, N. 18.

15. DELAY WITH INSTRUCTIONS OR DRAWINGS CONSTITUTING A VARIATION, AND INSTRUCTIONS OR DRAWINGS REQUIRING A VARIATION. If delay in supplying instructions or drawings necessitates a change in any “specified sequence method or timing of construction” of the works, the contractor may be entitled to argue that the engineer must give a variation order under cl. 51, to be valued under cl.52 including profit (p. 187). If the contents of an instruction or drawing when issued involve such a variation or a variation in the physical works, then, as this sub-clause says, again the variation must be priced under cl. 52 and such valuation will normally include a profit for the contractor, and compensation for loss of profit for any extra time on the site due to the variation.

16. THE DOCUMENTS TO BE KEPT BY THE CONTRACTOR ON SITE are extended to the Specification (defined in cl. 1 (1) (f)) as well as drawings. For no apparent reason the contractor is not required to keep on site written instructions other than specifications.