Galba Developments is the commercial development entity created by the largest pension fund in Nusquam. It is progressing a project to redevelop a large brownfield site in Cloacarius, a run-down port on the coast of Nusquam.
The scheme is extensive and involves the creation of new port facilities, a storage and distribution centre and new housing. In addition new road and rail links are being created to improve the accessibility of Cloacarius from other parts of Nusquam.All planning and feasibility has been undertaken and approved.
For historical reasons, the law of England and Wales is the law that applies in Nusquam.A team of highly experienced consultants have been assembled. Your role is as project manager for the development on behalf of Galba Developments.
You can use any standard form of building contract with which you are familiar for the purposes of your submission. The contract you have selected should remain the same throughout the task and should be named at the outset. It need not be the same form of contract as you selected for the purposes of your submission in respect of Assignment
1. The development is around two thirds complete, however, issues have arisen with the contractor responsible for the construction of the new rail freight terminal in Cloacarius and with the contractor responsible for the design and construction of one of the new residential buildings on the waterfront adjacent to the new port facilities.
The first issue is the allegation that items necessary for the completion of the rail freight terminal works have not been included in the client’s design and specification documents included in the contract. The contractor is seeking additional payment for these items.
The second issue relates to an emerging dispute that is the result of a breakdown in the relationship between Galba Developments and its contractor for the waterfront residential building. The point in issue in is the aesthetic quality of the works. In order to preserve its design vision for the building Galba Developments novated the architect it had appointed to the contractor at the time it entered into the design and build contract for the works.
However, ever since the works started on site Galba Developments has been of the view that the contractor through its choice of materials and selection of sub-contractors has evidenced an intention to do the least it needs to do in order to deliver the project rather than striving for excellence; a point of view reinforced by its perception that the contractor is ignoring the design detail suggestions of the architect.
The contractor has denied it is not trying to do its best to achieve a high standard and has also made it clear that its intention is to comply not only with the ‘letter of the contract’ but also its spirit. It has however also stated that it believes the client has unrealistic expectations given the contract sum and duration.
This conflict is becoming a matter of increasing significance for Galba Developments because the project will shortly be entering the stage at which internal finishings and other features will begin to be procured and Galba Developments will begin marketing the scheme more widely.
Its intention is to market the scheme as a prestigious waterfront residential complex but it believes this aim is being imperilled by the actions of the contractor. Task
Using a report format, Galba Developments has asked you to prepare:
a. advice in which you critically appraise its obligations in respect of the first issue based on analysis of the standard form contract in use. It has also asked you to ensure you include in your advice an analysis of what its obligations would be if the contract did not contain provisions that dealt with this matter (in other words if the common law position applied).
b. advice as to how it should seek to resolve the conflict it has with the contractor (the second issue). Galba Developments is aware of the numerous dispute resolution methods available to it as an alternative to arbitration or litigation and is seeking your reasoned advice as to which you believe would be the best approach to use in the present situation irrespective of the dispute resolution mechanism stipulated in itscontract with the contractor. When providing your advice Galba Developments has asked you to make clear why you have rejected use of methods other than that you have put forward.
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