Course Catalogue.

After participating in this course, you will be able to:

• Examine claims arising from construction
• Discover in detail the roles and obligations of the contractor/consultant/owner
• Protect yourself in construction contracts
• Recognize special risk and liability issues
• Apply knowledge gained to tendering for construction
• Determine the type of contract that best suits your needs

Description
In forming the construction contract, today’s competitive and complex construction industry requires careful consideration. We all want the work, but are the contracts equitable? Are the specifications and timetable feasible? What is your liability exposure?

Properly prepared contractors, subcontractors, architects, engineers, and developers can avoid anticipated liability, reduce performance disputes and receive payment for work performed. In this course, you focus on practical solutions for today’s construction problems. Relying on years of experience, the instructor will illustrate what you should look for in a contract, exposures to avoid, and ways to protect yourself should a dispute arise.

Actual case examples will be discussed, explaining contract performance, how to resolve construction disputes, how to prepare for a litigation case and the bidding process.

This course covers legal issues from the formation of the contract to the final payment. It is designed to assist construction professionals and their lawyers in day-to-day business activities.

Course Outline

• The Canadian legal system
• Basic contract law
• Types of construction contracts
• Construction bidding and tendering
• Construction claims
• Disputes over cost and time
• Allocation of responsibility for unknown risks
• The nuclear option and quality of performance
• Hidden risks and delay claims
• Architects and engineers
• Construction torts and Insurance
• Bonds and liens

Who Should Attend
Contractors • Subcontractors • Architects • Engineers • Owners • Developers • Suppliers • Lenders • Project Coordinators • Credit Managers • Liability Insurers • Brokers • Lawyers wanting to develop expertise in Construction Contract Law • Municipal, Provincial and Federal Agencies that engage Contractors for Public Contracts

Course Syllabus

Day I

The Canadian Legal System

What is the legal system

• Substantive law - rules to follow
• The courts - a body to enforce the rules
• Procedural law - hurdles to jump to get to court
• Where do the legal rules of substantive law come from?
• The government - statutes and regulations
• The Constitution and Treaties and Trade Agreements
• The courts: the common law: history, stare decisis and precedent
• The people: local custom and trade practice
• Branches of the law
• Law and Equity
• Public law and private law
• Aristotle’s two forms of Justice
• Corrective Justice:  the scales of justice
• The main private law domains: Property, Tort, and Contract
• Distributive Justice:  the ancient view – boons from the State
• The modern view:  the State as referee

Tort Law in General, and Particularly Related to Construction

• What is tort law? A set of legal rights and obligations that judges developed through the common law
• Elements of tort law:
• Duty of Care
• Standard of Care
• Damage
• Tort law as “the law of the neighbourhood”:  the 20th Century revolution in the expansion of tort law rights and obligations
• Contractor’s obligations in tort law: Winnipeg Condominium Co. v. Bird Construction
• Consultant’s Obligations to the Contractor: Edgeworth v. N.D. Lea
• The legal doctrines that circumscribe tort obligations:
• Reasonable foreseeability
• Proximate Cause
• Measurement of Damages

Basic Contract Law

1. Contract law – the law of the marketplace
• The court’s approach to contracts:  What the Supreme Court of Canada said in R v Paradis and Farley
• The two rules of contract law: (1) The Contract means what it says; (2) except when it doesn’t
• General principles and techniques of judicial control over contract terms
• The duty of good faith
2. Basic principles
3. What is a contract?
4. Enforceability
• Legality
• Parties
• Evidence of intention to be legally bound
• Agreement as to the subject matter
• Written versus verbal contracts
5. Enforcement - what does it mean?
• Specific performance versus damages
• Calculation of damages
• Limitations on the recovery of damages
• Suing for Breach of Contract
• Alternative dispute resolution (“ADR”)

Day II

Construction Bidding and Tendering - Legal and Practical Do’s and Don’ts

• The tendering process
• The continuing relevance of common law contractual rules to bidding and tendering
• The Supreme Court of Canada rules:  the Ron Engineering revolution
• The Supreme Court of Canada addresses unintended consequences:  M.J.B. Enterprises, Martel Building and Double N Earth Movers
• The Supreme Court of Canada puts a cap on common law regulation of tendering:  Tercon v. British Columbia
• New rules governing the tendering process - Canada Free Trade Agreement, New West Partnership Trade Agreement, and others
• Minimizing the risk of bid disputes
• Bid evaluation; preventing ambiguities; technical evaluation (time, performance); and financial evaluation
• New ways to resolve tendering disputes
• Bid protest mechanisms
• Judicial review

Types of Construction Contracts

• The evolution of construction contracts
• Allocation of Risk
• Fixed price
• Cost plus
• Unit price
• Construction management
• Design/Build and EPC
• P3
• Integrated Project Delivery

Construction Claims Overview

• How the courts deal with construction claims
• Principles of interpretation
• Express terms and implied terms
• Ordinary meaning
• Whole contract
• Contra proferentum
• Exclusion and limitation of liability clauses
• Notice provisions

Following the Requirements of the Contract

• The importance of complying with notice provisions
• Invocation of dispute resolution requirements

Disputes over Cost - Changes and Extras

• Payment provisions
• Scope of work
• Change or extra - does it matter?
• Pricing changes
• Enforceability of changes clauses

Allocation of Responsibility for Unknown Risks

• Concealed or unknown conditions
• Toxic or hazardous substances

Disputes over Time

• The importance of Scheduling
• Owner’s difficulties in enforcing timely performance
• Owners’ delay claims against contractors
• Enforceability of liquidated damages
• Contractors’ delay claims against owners
• Subcontractors’ delay claims

Force Majeure and Frustration with Contracts

• The effect of outside events – e.g. a global pandemic – on contractual rights and obligations
• A review of how construction contracts responded to the Covid-19 pandemic
• Preparing for the next pandemic and the future less-certain business environment generally

Quality of Performance

• Warranty provisions
• Practical difficulties in enforcing warranties
• Practical solutions - the owner’s inspection authority

Day III

Workshop - Case Study
The class will review a real fact scenario, to consider how a court interprets and enforces a construction contract

The Nuclear Option - Termination Provisions

• Perils and pitfalls of terminating the contract

Bonds - Protection Against Contractor’s Non-performance

• The parties - principal, surety, and obligee
• The business of bonding
• Bonding versus insurance
• Types of bonds
• Bid bonds
• Performance bonds
• Labour and material payment bonds

Governmental Regulation of Construction Payment

• The new: prompt payment requirements and prompt resolution of payment disputes – adjudication
• The old – construction/builder’s liens
• The lien as a legal right
• How liens work in theory: lien claimants’ rights and owners’ corresponding obligations
• How liens work in practice: paradigm scenarios
• Timing: determination of substantial performance
• Other rights and obligations created by statute in some jurisdictions: trusts and the right to information

Insurance

• The purpose and nature of insurance
• What does insurance cover?
• What kind of insurance is available for construction projects?
• Builder’s Risk
• Commercial General Liability
• Professional Liability: Errors and Omissions
• The biggest issue: the defective work exclusion
• How to deal with insurance companies

Architects and Engineers

• The consultant’s multiple responsibilities under the contract
• The consultant-owner relationship
• Consultant’s liability for breach of contract
• Responsibility for design
• Responsibility for construction cost
• Responsibility for the proper performance of the work
• The consultant’s responsibility as an interpreter of the contract - duty to act judicially

Questions and Answers and Feedback to Participants on Achievement of Learning Outcomes

Concluding Remarks and Final Adjournment

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