A Case Study based on FIDIC and PAM Form 2006

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FIDIC WORKSHOP
2016
GROUP 6

QUESTION 1
WHAT ARE THE ESSENTIAL REQUIREMENTS FOR
FORMATION OF CONTRACT? DISCUSS WHETHER
A BINDING AND ENFORCEABLE CONTRA...

• 1. TENDERS AS OFFERS.
• The building owner who invites tenders is only indicating an intention to
receive (invitation to...

• 3. ACCEPTANCE OF TENDER
• A tender (offer) may be accepted any time after it is made. Generally, the tender is open
for ...

• 5. ESSENTIAL TERMS OF AGREEMENT.
• Lord Blackburn in Rossiter v Miller (1878) held that if some particulars
essential to...

Answer :
• There is an enforceable contract between Jolly and Can-do. In the event of Can-
do(contractor) was given posses...

CASE LAW
• The classic case of Trollope & Colls Ltd V Atomic Power Construction Ltd (1963)
support this situation where th...

QUESTION 2
ADVISE JAZZY ON THE VALIDITY OF CAN-DO’S
CLAIM FOR EXTENSION OF TIME AND ADDITIONAL
PAYMENT ARISING FROM THE CO...

• Based on the red book FIDIC in section 20.1_contractor’s claim; if
the contractor considers himself to be entitled to an...

Answer :
• Base on the situation, the contractor considers himself to be entitled to
claim for extension for time and addi...

QUESTION 3
HOW SHOULD JAZZ RESPOND TO CAN-DO
WITH REGARD TO THE LATTER’S CLAIM FOR
EXTENSION OF TIME FOR THE DELAY CAUSED
...

• Under Red Book FIDIC in section 8.4 (b) extension of time for completion stated that
the contractor shall be entitled su...

• Under PAM form clauses 23.0 submission of notice and particulars
for extension of time, if the contractors think that th...

QUESTION 4
IF THE STANDARD FORM OF CONTRACT IS THE
AGREEMENT AND CONDITIONS OF PAM CONTRACT
2006 (WITHOUT QUANTITIES), ADV...

• Under standard form of contract PAM 2006 (without quantities) clause 23.9
(extension of time after the issuance of certi...

QUESTION 5
ADVISE JOLLY ON THE CONTRACTUAL
IMPLICATIONS OF REPLACING ER JAZZY AND
APPOINTING THEIR OWN EMPLOYEE, ER JO-JO,...

• Under red book FIDIC in section 3.4 replacement of the engineer, if the employer
intends to replace the engineer, the em...

6. PROCEDURE AND CONSEQUENCES FOR SUSPENSION OF
WORKS.
FIDIC
-CLAUSE 8.8 STATES THAT ENGINEER MAY AT ANY TIME INSTRUCT TO ...

-CLAUSE 16.1- IF ENGINEER FAILS TO CERTIFY IN ACCORDANCE TO
CLAUSE 14.6 (ISSUE OF INTERIM PAYMENT CERTIFICATE)OR EMPLOYER
...

PAM 2006 (WITH QUANTITIES)
-THERE'S NO CLAUSES WHICH SUPPORTS AN ENGINEER TO SUSPEND
ANY WORK.
-HOWEVER, CLAUSE 30.7 WHICH...

7. ADVICE ON RESPONSE ON SUB-
CLAUSES TO BE DELETED IN CONTRACT
FORM.
- GULP SHOULD ADVICE JOLLY ON THE IMPLICATION ON REM...

- IF THERE'S EOT, THE COMPLETION DATE CAN BE EXTENDED WHEN THERE'S A
DELAY WHICH WILL SET A NEW COMPLETION DATE TO WORK TO...

8. IN EVENT CAN-DO BECOMES INSOLVENT
FIDIC
-CLAUSE 15.2(E) - THE EMPLOYER SHALL BE ENTITLED TO TERMINATE THE
CONTRACT IF T...

• AFTER TERMINATION, EMPLOYER MAY COMPLETE WORKS AND/OR
ARRANGE FOR ANY OTHER ENTITLES TO DO SO. THE EMPLOYER
AND THESE EN...

PAM 2006 (WITH QUANTITIES)
-CLAUSE 25.4-IN THE EVENT THE CONTRACTOR BECOMING INSOLVENT, THE
EMPLOYMENT OF THE CONTRACTOR S...

• CLAUSE 25.4 (B) - THE CONTRACTOR IS SO REQUIRED BY THE EMPLOYER
OR ARCHITECT, SHALL WITHIN 21 DAYS OF DETERMINATION, ASS...

• CLAUSE 25.4 (D) - THE CONTRACTOR SHALL ALLOW OR PAY TO
THE EMPLOYER ALL COST INCURRED TO COMPLETE THE WORKS
INCLUDING AL...

QUESTION 9
ADVISE JAZZ ON THE MANNER IN
WHICH THE EXTENSION OF TIME WAS
PURPORTEDLY GIVEN FOR THE
RECONFIGURATION OF THE
B...

ACCORDING TO PAM FORM 2006,
• JAZZ IS THE CIVIL AND STRUCTURAL ENGINEER APPOINTED FOR THIS PROJECT.
• CLAUSE 2.1 STATES TH...

ACCORDING TO PAM FORM 2006,
• ASSUME PICASSO WHICH IS THE CONTRACT
ADMINISTRATOR IS THE ONE WE ARE ADVISING.
• SCENARIO: “...

ACCORDING TO FIDIC FORM,
• SCENARIO: “CAN-DO (CONTRACTOR) GAVE
NOTICE OF DELAY AND REQUESTED FOR AN
EOT FOR RECONFIGURATIO...

ACCORDING TO PAM FORM 2006 & FIDIC
FORM,
• CAN-DO (CONTRACTOR) IS NOT ENTITLED FOR EOT, AS
• THE CONTRACTOR GAVE LATE NOTI...

QUESTION 10
a) ADVISE JAZZ ON WHAT THEY HAVE TO DO AND ON THE CONSEQUENTIAL
EFFECTS IF JOLLY WISHES TO TAKE OVER PART OF T...

QUESTION 10 (A)
• THIS QUESTION IS RELEVANT TO SUB-CLAUSE 10.2 OF FIDIC CONDITIONS OF
CONTRACT FOR CONSTRUCTION.
• JAZZ SH...

QUESTION 10 (A)
WHAT IF JOLLY USED THE PART OF WORK BEFORE THE ISSUANCE?
• THE PART WHICH IS USED WILL BE DEEMED TO HAVE B...

QUESTION 10 (A)
CONSEQUENTIAL EFFECT:
• DAILY RATE OF DELAY DAMAGES PROPORTIONATELY REDUCED
• DEFECTS NOTIFICATION PERIOD ...

QUESTION 10 (A)
CONSEQUENTIAL EFFECT (CONT’D)
• FIRST HALF OF THE RETENTION MONEY CERTIFIED AND PAID FOR THE PART [SUB-
CL...

QUESTION 10 (B)
• THIS QUESTION IS RELEVANT TO CLAUSE 16 OF PAM CONTRACT 2006.
• PICASSO SHALL GIVE WRITTEN NOTICE OF INTE...

QUESTION 10 (B)
CERTIFICATE OF PARTIAL COMPLETION SHALL INCLUDE
• DATE OF PARTIAL POSSESSION
• LAYOUT PLAN TO IDENTIFY THE...

QUESTION 10 (B)
CONSEQUENTIAL EFFECTS:
• EFFECT OF PRACTICAL COMPLETION IS APPLIED ON THE TAKEN PART [CLAUSE
16.1(B)]
• DE...

QUESTION 10 (B)
CONSEQUENTIAL EFFECTS:
• DLP ENDS EARLIER, ISSUANCE OF CERTIFICATE OF MAKING GOOD DEFECTS UPON
ENDING OF D...

CALCULATION ON RETENTION SUM/MONEY
• ASSUMING THE PART TAKEN OVER
HAS AN ESTIMATED VALUE OF RM
20,200,200.00
• MAXIMUM RET...

CALCULATION FOR DELAY/LIQUIDATED
DAMAGE
• FOR FIDIC AND PAM
• RM20,200,200.00/RM80,800,800.00 X RM1,000,000.00
• = RM250,0...

QUESTION 11
DISCUSS JAZZ’S ACTION TO ISSUE AN
INSTRUCTION TO OMIT PORTIONS OF THE
WORKS FROM CAN-DO’S CONTRACTED SCOPE
SO ...

 PAM Form 2006 (With Quantities) assume Engineer is Architect
A certain portion of works have been omitted from the Engin...

 FIDIC Contract Form
Based on Clause 4.9, the contractor shall institute a quality assurance system to demonstrate compli...

QUESTION 12
ADVISE JOLLY (EMPLOYER) ON THEIR RIGHTS IN
RESPECT OF THE FAILURE OF THE MEMBRANE
ROOFING WORKS.

12. Advise Jolly (Employer) on their rights in respect of the failure of the membrane roofing works.
 PAM Form 2006 (With...

 FIDIC Contract Form
Under Clause 11.3, Jolly shall be entitled subject to Sub-Clause 2.5 to an extension of the Defects ...

QUESTION 13
WHAT ARE THE DUTIES AND
OBLIGATIONS OF JAZZ AND CAN
DO FOLLOWING RECEIPT OF THE
NOTICES FROM THE LATTER ON
THE...

FIDIC
IN ACCORDANCE TO CLAUSE 20.1

• JAZZ HAS 42 DAYS FROM RECEIPT OF FULLY DETAILED CLAIM TO
RESPOND WITH HIS APPROVAL, DISAPPROVAL OR DETAILED
COMMENTS, AN...

• IF EVENT IS CONTINUING, CONTRACTOR SUBMITS INTERIM
ACCOUNT AT INTERVALS AS REQUIRED BY JAZZ.
• IN THE ABSENCE OF ANY AGR...

PAM
(2006)

EOT AND LOSS AND/OR EXPENSE IS IN TWO
DIFFERENT CLAUSES 23.0 AND 24.0
RESPECTIVELY IN THE PAM FORM
UNLIKE
IN FIDIC WHICH I...

ASSUMING PICASSO IS THE CONTRACT ADMINISTRATOR
EXTENTION OF TIME – CLAUSE 23.0
BEFORE GRANTING EOT THE JAZZ SHALL CONSIDER...

AFTER PICASSO HAS COMPLETED HIS ASSESSMENT, HE HAS TO
MAKE EITHER OF 2 DECISIONS:
1) REJECT THE CONTRACTOR’S APPLICATION, ...

TIMING OF ISSUE :
• WITHIN 6 WEEKS FROM THE DATE OF RECEIPT OF SUFFICIENT
PARTICULARS; OR
• IF PICASSO CANNOT ISSUE EOT WI...

LOSS AND/OR EXPENSE - CLAUSE 24.0
• BY RELEVANT EVENTS LISTED IN CLAUSE 24.3
• PICASSO SHALL ASCERTAIN THE AMOUNT OF LOSS ...

CONTRACTOR’S COMMON LAW RIGHTS UPON REJECTION
OF HIS CLAIMS:
• CAN DO MAY BE ABLE TO PURSUE HIS CLAIM UNDER COMMON
LAW FOR...

QUESTION 14
IF THE STANDARD FORM OF CONTRACT IS THE
AGREEMENT AND CONDITIONS OF PAM 2006 (WITH
QUANTITY), DISCUSS THE RULE...

PAM 2006 (WITH QUANTITIES)
• Clause 11.5 Valuation Of Variations And Provisional Sums
All variations shall be measured and...

Rules to be considered by gulp in when valuing the variation relating to the reconfiguration
of the bedrooms:
1. Re-measur...

QUESTION 15
YOU HAVE BEEN REQUESTED BY JOLLY TO ASSIST IN
DRAFTING THE LETTER OF ACCEPTANCE. ON THE
ASSUMPTION THAT THE CO...

*** REFER TO ATTACHMENT***
../DOWNLOADS/QUESTION 15- REVISED LOA.PDF

QUESTION 16 (A)
OUTLINE THE PROCEDURE THAT JAZZ AND CAN-
DO MUST COMPLY WITH WHEN DEALING WITH THE
CLAIM FOR ADDITIONAL PA...

CLAUSE 20.1 FIDIC
• Procedure for Can-Do ( contractor)
1. Contractor shall give notice within 28 days after the date on wh...

• *Case law
• Supported by case of Bremer Handelgesellschaft Mbh V Vanden Avenne Izegem
Nv,
• House Of Lords held that pro...

Procedure For Jazz (Engineer/Contract Administrator)
1. Engineer may monitor record-keeping and instruct for further recor...

16 (B)
IF THE CONTRACT FORM IS THE AGREEMENT AND
CONDITIONS OF PAM CONTRACT 2006 (WITH
QUANTITIES) HOW WILL YOU ADVICE PIC...

1. Clause 24.1 Loss And/Or Expense Caused By Matters Affecting
The Regular Progress Of The Works
i. 24.1 (A)
ii. 24.1 (B)
...

ADVICE FOR CAN-DO
• If Can-do (contractor) expects that the regular progress of works is likely to be
materially affected ...

• ADVICE FOR PICASSO
1. Architect must ensure that Contractor submitted his notice of intention to
claim in writing
2. Arc...

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