Interpretation and Enforcement of Construction Contracts

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

• Consider contractor perceptions about interpretation and enforcement issues
• Apply your knowledge of construction contracts
• Understand the role of the inspection authority
• Avoid claims caused by overly strict or untimely interpretation
• Recognize laxity in interpretation and its consequences

Description
Ambiguous contract documents, improper interpretations, delayed decisions, and wrongful enforcements can result in owners not getting their money’s worth and being stuck with costly construction claims. This course explores what happens when interpretation and enforcement are too strict or too lax and whether there is a correct balance.

Course materials will cover the many details of multi-faceted contract documents and focus on developing your interpretation and enforcement skills to reduce costs.

Who Should Attend
Project Managers • Engineers • Contract Managers and Coordinators • Designers • Architects • Contractors • Construction Managers • Construction Inspectors • Procurement Specialists • Field Engineers • Subcontractors • Project Technicians and Technologists • Developers • Business Owners • Consultants • Government Employees • Public-Sector Employees and others concerned with the ultimate success of a project

Day I

Best Practices for Managing Risk in Construction Contracts
(Prof. Sami Fereig)

• What should an owner be on the lookout for?
• What should the contractor be aware of? Knowing your rights and obligations
• What should the consultant be aware of?
• Crucial factors to look for in effective contract administration
• Top tips for managing risk in construction contracts

Workshop 1
(Prof. Sami Fereig)

• Case Study: Risk Management and Allocation of Risk
• Discussion of lessons learned

Construction Project Administration
(Prof. Sami Fereig)

• Parties to the process
• Relationships among the parties
• Responsibility, risk allocation, and management
• Record keeping
• Contract administration: the paper trail, coordination, negotiations, payments, changes, inspection/quality control, project close-out

Workshop 2
(Prof. Sami Fereig)

• Case Study: Establishing a Responsibility Matrix and Line of Communication
• Discussion of lessons learned

Enforcement of Contracts
(Michael MacKay)

• Basic principles
• What is a contract?
• Enforceability
• Evidence of intention to be legally bound
• Agreement as to the subject matter
• Written versus verbal contracts
• Enforcement - what does it mean?
• Specific performance versus damages
• Calculation of damages
• Limitations on the recovery of damages

Structure of Construction Contracts
(Michael MacKay)

• The evolution of construction contracts
• Allocation of risk
• Fixed-price
• Cost-plus
• Unit price
• Construction management
• Design/Build and EPC
• P3

Day II

Claims by Contractors / Claims by Owners
(Prof. Sami Fereig)

• Restricted access/changed conditions: late and incomplete drawings or equipment, active interference with the contractor’s means and methods, constructive acceleration, termination and suspension
• The contractor walks off the job and delays completion: liquidated damages
• The contractor finishes with deficiencies: cost vs diminished value claims against design consultants

Workshop 3
(Prof. Sami Fereig)

• Case Study: Designing Forms for Different Administrative Activities
• Discussion of lessons learned

Pricing the Changes and the Process of Effecting Changes
(Prof. Sami Fereig)

• Introduction
• Factors that affect the pricing of changes
• Extras and changes
• Changes in work
• Resolving disagreements on changes
• Payment for extras and changes: resolving disputes

Bids: Avoiding Interpretation and Enforcement Problems
(Michael MacKay)

• The tendering process
• The contractor’s obligations to the owner: the Ron Engineering revolution
• Obligations of the owner to contractors: M.J.B. Enterprises, Martel Building and Double N Earth Movers
• Exclusion of liability for owner’s breach of contract: Tercon v British Columbia
• Bid evaluation; preventing ambiguities; technical evaluation (time, performance); financial evaluation
• Minimizing the risk of bid disputes

Day III

Damage Quantification
(Prof. Sami Fereig)

• Pros and cons regarding the various means of quantifying the cost
• Direct and indirect cost/equipment ownership
• The failings of the total cost approach

Workshop 4

(Prof. Sami Fereig)

• Case Study: Quantifying Change Order Claims
• Discussion of lessons learned

Understanding Delay and Productivity Claims
(Prof. Sami Fereig)

• Types of delay: means and methods of analyzing delay
• Factors which affect productivity, discussion on different methods of calculating productivity claims (i.e. differential cost method, measured mile approach), estimated cost/industry charts)

Workshop 5

(Prof. Sami Fereig)

• Case Study: Using CPM for Delay Analysis
• Discussion of lessons learned

Interpretation of Contract Language by the Courts
(Michael MacKay)

• How do courts interpret contracts?
• General principles
• Specific rules
• Exclusion and limitation of liability clauses
• Warranty provisions
• Importance of contractual notice requirements
• How courts resolve disputes over extras and changes
• Contractual responses to the risk of adverse site conditions
• Delay claims
• Contractors’ delay claims against owners
• Owners’ delay claims against contractors
• Enforceability of liquidated damages

Day IV

Claim Prevention and Management
Prof. Sami Fereig

• Mitigation of Claims
• Documentation of Claim Events
• Knowing Your Contract
• Do Not Waive Claims
• Monitor Job Progress
• Monitor the Impact of the Schedule

Dispute Resolution
Prof. Sami Fereig

• Strengths and weaknesses of alternative strategies such as negotiation, partnering, mediation, project neutrality, arbitration and litigation
• Discussion of available strategies during and after construction is complete
• Controlling costs while resolving disputes

Bonding
(Michael MacKay)

• 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

Insurance
(Michael MacKay)

• Insurance requirements of the contract
• What kind of insurance is available?
• What does the insurance cover?
• How to deal with insurance companies

Workshop
(Michael Mackay)