CONSTRUCTION LAW ASSIGNMENT

PROBLEM

Eiffel Builders Inc enters into a contract with SupeInfrastructure to build a water desalination plant...Eifel Builders engages Aqua Engineers to prepare turbine capacity specifications for each stage. The contract provided for payment a 3-stage basis.

The specifications on three occasions are stamped "approved" by Eiffel. Subsequently Eiffel refuses to pay for the Specifications services on the basis that the speciation prepared were not adequate and involved a variation of the provisions of the contract. There is some information that the reason that Eiffel refused to pay is that it has liquidity problems and is using the dispute to delay or negotiate a reduction of payment...

At site meeting is organised with all parties. They discuss the requirements and verbally agree on terms to vary the construct so that the specifications as presented can be carried out acting on this agreement the building proceeds. A few weeks later Eiffel r refuses to pay Aqua t because the specifications are not complete and do not comply with the terms of the written contract.

QUESTIONS

PART A

1. In the case can the specifications in the contract vary the written terms of the contract. Describe the Legal Principles applicable and the hierarchy of contract documentation.

2. What is the legal affect of stamping the specifications "approved" on any future contractual position?

3. What action can be takes and what needs to be established if it is asserted that the reason that the payment is not made is because the liquidity problems of Eiffel. Describe the Legal principles and what evidence is required.

4. Having regard to the problems encountered in this case what procedures would you formulate to cover to avoid problems of amendments in the course of construction and advice about the resolution of technical disputes and use of experts?

NOTE: Questions 1 -3 questions require an identification of the relevant legal principles of Contract and the application of these principles to the fact situation to indicate a possible outcome. Question 4 requires the identification of the problems in the case example and having regard to the legal principles what action can be taken in planning to avoid these problems in the future

PART B

5. (a) (Assume that the Security of Payment Legislation Does not Apply). Eiffel wishes to commence court proceedings to substantiate its claim that the specifications are not complete. Describe what preparation is required and how the Court assesses expert witnesses? What are the problems and risks in using expert witnesses?

(b) You are required to advise Aqua Engineers of the procedures required in the future if it wishes to avail itself of the payment process under the Building Industry Security of payment Act (Victoria). In your advice you should include what is required to ensure that a claim fall under the scheme of the Act and any issues as indicated in the cases referred to in the blackboard notes .Refer and discuss the relevant section of the Building Industry Security of Payments Act. (Victoria)

NOTE: Question 1 requires evidence of the understanding of the court process, risk involved and preparation use of witnesses and the role of expert witnesses in the court process

Question 2 requires how an application under the Security of Payments Act would proceed in the fact situation provided. Reference to the relevant section of the Act is required.