I.
General Course Knowledge Exam Questions
1) Please, identify & discuss (in detail) the possible types or categories of business
services required both for the construction business & construction project & their
content & practical significance in respect thereof.
Ans: we didn’t cover this portion
2) Please, define, and discuss (in short) the basic features & distinctions between
Project Delivery Systems, Contract Types (Forms of Contract) & Methods of
Procurement by providing three pertinent examples for each of them under the
Ethiopian & the international context.
Ans: Project Delivery System is the way Project Owners together with Project Regulators
and Financiers determine the assignment of responsibilities to Project Stakeholders along
the Construction Process. Project delivery systems are basically classified in to two broad
areas:
a) Force Account; and
b) Outsourced.
Sometime owner may have interest to engage themselves to undertake the project, as
case of force account delivery system. Most of the time the owner may give their project
to professionals firms(Contractor )that are involved in construction industry, as in the
case of outsourced delivery system
According to Article 1675 of the Civil Code:
A contract is an agreement whereby two or more persons as between themselves
create, vary or extinguish obligations of a proprietary nature.
The following are some of the types of contract:
Contracts on onerous v. gratuitous title; (reciprocity);
Commutative v. aleatory contracts; (time)
Consensual v. solemn contracts; (form)
contracts of consultation v. contracts of adhesion; (freedom of
negotiation);
Construction contract is example of onerous, commutative and solemn type of
contract
Donation is example of gratuitous type of contract
Shoe selling is example of aleatory
Methods of Procurement???
3) Please, identify, and discuss (in short) the fundamental obligations of the Employer
& the Contractor within the context of an international construction contract based
on MDB Harmonized FIDIC Conditions of Contract (2006).
According to MDB-FIDIC clause 2.1Right to Access to the site
“The Employer shall give the Contractor right of access to, and possession of, all parts of
the Site within the time (or times) stated in the Contract Data.” This means that the
employer has an obligation for preparation of access road to the site
According to MDB-FIDIC clause 14.2 Advance payment
“The Employer shall make an advance payment, as an interest-free loan for
mobilisation and cash flow support, when the Contractor submits a guarantee in
accordance with this Sub- Clause.”
According to MDB-FIDIC clause 4.1 Contractor’s general obligation
The Contractor shall design (to the extent specified in the Contract), execute and
complete the Works in accordance with the Contract and with the Engineer’s instructions,
and shall remedy any defects in the Works
4) What do you understand by delay & disruption claims? Is there any difference
between the two types of claims? If yes, why? If not, why not? Please, discuss in
detail.
Delay claims are the claims that rose due to the interruption of the time of completion of the
project. This claim may originate from the employer or the contractor. The employer has the
right to ask the contractor, in the form of liquidated damages, for any delay of the project that is
caused by the contractor. In turn the contractor also has right to ask the employer, the form of
extension of time and additional payment, for any delay caused by the engineer and the
employer. In addition to this the contractor also has the right to ask delay claims for any other
delay that affect the completion time of the project such as the government bodies, God acts and
the like.
Disruption claims are the claims that rose by the contractor due to loss of the productivity caused
by employer, engineer or other external bodies.
Is there any difference between delay and disruption claims?
Yes there is, because delay claim are only focus on the interruption of the completion time of the
project where as the disruption claims focus on the loss of productivity of the contractor. The
other difference of the two claims is that disruption claims are only raised by contractor where as
delay claims can be asked by the contractor and the employer.
5) There are two types of sub-contractors: preferred (selected) subcontractors &
nominated sub-contractors. The nomination is carried out by the employer himself.
Does the Sub-contract Agreement signed between the (preferred/selected) Sub-
Contractor & the Main Contractor create any legal relationship between the said
Subcontractor & the Employer? Why? Discuss. Would your opinion or position be
different, if the Sub-contractor were a nominated subcontractor? Why? Please,
discuss in detail.
Ans: subcontract that signed between the main contractor and domestic contractor will
not create any legal relationship between the employer and subcontractor. This is due to
the legal effects of Sub-contract could be seen in light of the doctrine of the privity of
contract, which stated as contract will only bind those parties that sign it.
The subcontract concluded between the Main Contractor & the Subcontractor only binds the
Main Contractor & the Sub-contractor (see also Article 1731(1) of the Civil Code).
The Sub-contract may not create a contractual relationship between the Subcontractor & the
Employer (see Sub-clause 4.3 of the FIDIC Conditions of Sub-contract). See also Article
1952(1) of the Civil Code
6) Please, discuss the role of Consultants in the construction project inclusive of
building project. What is the underlining features or nature of their professional
Services? Please, discuss in detail.
Ans: we didn’t cover this portion
Case study:
The Water Supply Dam Construction Project Case:
a) To analysis the argument between the contractor and the employer let us see the acts of
each parties in the due course of construction process:
Contractor:
He presented his claim after the completion of the project for the very reason that
he can submit his claims directly to adjudication and then to arbitration
He believe that non fulfillment of procedural requirements shall not waive the
substantive rights of the Contractor; his claim is unaffected on the basis of the
applicable law since the ten years period of limitation has not yet elapsed as per
the applicable law;(i.e. as per Article 1845 of the Civil Code); the submission of
the his Claims to the Engineer’s determination & the inclusion of the Claims in
the Statement at Completion shall serve no purpose since the decision maker in
both instances was the same Engineer, who has initially rejected the whole of the
Contractor’s claims; and under taking amicable has no effects on settling between
his employer as both the he and his employer may undertake same, at any time
even during the process of this adjudication;
Engineer:
Has rejected the contractor claims by given the following reasons
1) The project has been completed
2) The contractor’s claims is not submitted for his determination [Engineer’s
determination]
3) The contractor is not includes any claims in his statement at completion
Employer:
The employer reject the whole claims of the contractor due to the following
reasons
1) Claims has not submitted to the determination of the engineer
2) Contractor didn’t not amicable settlement
3) Contractor didn’t includes any alleged claims in his statement of completion
As sole adjudicator of this projects my analysis and discussion will given below
1) Regarding to contractor act concerning time of presenting claims:
According to MDB-FIDIC clause 20.1 “contractor’s claims”
Analysis:
If the contractor feels that he is entitled for any additional payment and time he has to
notice to engineer, describing the event or circumstance giving rise to the claim. The
notice shall be given as soon as practicable, and not later than 28 days after the
Contractor became aware, or should have become aware, of the event or circumstance.
If the Contractor fails to give notice of a claim within such period of 28 days, the Time
for Completion shall not be extended, the Contractor shall not be entitled to additional
payment, and the Employer shall be discharged from all liability in connection with the
claim. Otherwise, the following provisions of this Sub-Clause shall apply.
Decision:
Based on this clause contractor act to present all claims at the end of the completion of
the project is wrong because any claims must be presented to the engineer with in less 28
days after the contractor aware about the claims. Addition to this the contractor did not
submit his claims to the engineer, this also another breach of the conract.
2) Regarding to contractors’ believe for non fulfillment of procedural requirements
Analysis:
As the contractor and the employer are in the contract, which is binding in nature, any
parties must be governed by that contract. As per article 1731(1) of the civil code
“A contract lawfully formed shall be binding on the parties as though they were law”
Decision:
Not following procedural requirements of the contract is disturbing the binding nature of
the contract, which is not lawful. This results liability of the contractor toward the case
3) Regarding to contractors’ believe toward application of article 1845 of civil code, Period
of limitation, for this scenario.
Analysis:
According to article 1845 of the civil code
“Unless otherwise provided by law, actions for the performance of a contract, actions
based on the non-performance of a contract and actions for the invalidation of a contract
shall be barred if not brought within ten”
Decision:
This clause is applicable for the cases that are related to failure of the project after
defected liability period and also it applicable by the employer. Therefore the argument
of the contract is invalid.
4) Regarding to contractor’s believe toward statement of completion
Analysis:
According to clause 14.10(C) of MDB-FIDIC “Statement at completion”
Within 84 days after receiving the Taking-Over Certificate for the Works, the
Contractor shall submit to the Engineer six copies of a Statement at completion with
supporting documents, in accordance with Sub-Clause 14.3 [Application for Interim
Payment Certificates ], showing:
(a) The value of all work done in accordance with the Contract up to the date
stated in the Taking-Over Certificate for the Works,
(b) Any further sums which the Contractor considers to be due, and
(c) An estimate of any other amounts which the Contractor considers will become
due to him under the Contract. Estimated amounts shall be shown separately
in this Statement at completion.
The Engineer shall then certify in accordance with Sub-Clause 14.6 [Issue of Interim
Payment Certificates]
Decision:
According to this clause the contractor has to submit its alleged claims payment in
statement at completion, but the contractor fails to do so therefore he is liable for his acts.
5) Regarding to employers’ and engineers’ argument toward this scenario
Analysis:
Both employer and engineer presented the failure of contractor not presented his claims
according to the time limits of contracts and procedure of the contracts.
Decision:
Both employer and engineer are lawful and reasonable raise their argument, as the
contractor seriously beach and wrongly interpreted condition of the contract and the
applicable law
Therefore finally I will decide based on the above points as contractor has not seriously followed
the terms of the contract is not entitled for any payments he asked.
b) Depending on your decision on the claims of the Contractor (under (a)), who shall cover
the costs of the adjudication incurred both by the Employer & the Contractor? Why?
Discuss.
Even if the contractor is the one who breach condition of the contract and raise
unreasonable claims to the adjudicator, but the selection of the adjudicator is made based
on the mutual agreement of the employer and the contractor. Therefore the payment for
the adjudicator should be shared equally by the parties, as per MDB-FIDIC condition of
contract clause 20.2
“The terms of the remuneration of either the sole member or each of the three members,
including the remuneration of any expert whom the DB consults, shall be mutually agreed upon
by the Parties when agreeing the terms of appointment. Each Party shall be responsible for
paying one-half of this remuneration.”
