Dr. Chandana Jayalath

Basically there are two approaches to set ethical standards. ‘Rule ethics' have been used to establish the ‘right' or ‘wrong' of ones actions or inactions, with no room for judgment or opinion, but simply to follow them, such as a code of conduct. ‘Social ethics' are based on value and judgment upon reason and knowledge and are open to different interpretations.

In devising a defect free mechanism, care must be taken not to seriously disturb the freedom of business and supply chain. There are macro economic effects in long run also. For instance, the contractor has the liberty to procure materials from his own choice while the employer also reserves the right to specify the source of procurement in some instances. It is the duty of the contractor, not the employer, to establish the basic prices against the specified materials under specified bill items

Contracts require the injured party to petition, in form of a claim, for a time extension, if they have been delayed by the actions or inactions of the other party. To this goal, many contracts specify that a time impact analysis (TIA) be prepared and submitted to objectively substantiate the request for a time extension. Once the duration of time has been agreed upon then the added time-related costs of such a delay are ascertained.

The use of preliminaries on pro rata basis would not truly result the actual loss in prolongation. The level of compensation is what is reasonable in the circumstances. Each case shall be evaluated on its own merit.

It is a cumbersome exercise to be dealt with far remote facts, both for justification and evaluation.

It is always better not to touch the General conditions but to have proper amended clauses as long as the primary intension of the standard clauses are secured in the given the General section.

If, however the instruction omitting works is a valid variation order, then whether a contractor can claim loss of profit on such omitted works depends upon the wording of the conditions of contract.

There are two general types of termination typically addressed in construction contracts: termination for convenience and termination for cause (sometimes referred to as termination for default).

It is impossible to accurately measure any under absorption of head office overheads whenever the damages become too remote and speculative. However, the contractor’s entitlement as to claim for additional overhead costs has been confirmed in case law.

A party, who wishes to exercise the right to suspend performance, runs the risk that their suspension will be regarded a failure to carry out the works regularly and diligently and may be treated as a repudiation of the contract, if in the particular circumstances no such right actually exists.