i-law

International Construction Law Review

INTRODUCTION

HUMPHREY LLOYD

DOUGLAS S JONES

The writer of our first article in this issue (at page 292) is Mr Patrick J O’Connor, Jr. He is, with Mr Philip Bruner, the author and editor of the leading book in the United States: Bruner & O’Connor on Construction Law . He is a partner in Faegre & Benson, LLP, in Minneapolis, Minnesota. The article is about Exterior Insulation and Finish Systems or Synthetic Stucco Cladding Systems, commonly called EIFS. As Mr O’Connor recounts, the product was used in reconstruction work in Europe after the Second World War and then in North America. It is attractive and not expensive. However, problems are now found where it has been used on buildings with a wooden frame. Whilst it is intended to keep water out, it does not always allow moisture that has penetrated to escape, thus causing damage, including the growth of mould. The point of weakness may not be in the system but rather where it adjoins other components. Mr O’Connor’s article is therefore in the nature of a case study of a typical defect—what is the cause of the damage and is the fault one of design, manufacture or workmanship? Since the problem may not become manifest for some time, issues of prescription, limitation and waiver also arise. The article, therefore, provides an excellent survey of the questions that have had to be answered within the United States, together with references to court decisions, and thus lays the foundation for a discussion of how such questions might be answered in other jurisdictions. The systems in question provide a classic example that is found throughout the world when an application is used outside the environment for which it was originally intended. The article’s value is therefore not confined to the use of EIFS. However, liability for many (perhaps most) defects is normally determined solely by reference to any contract or legal principle but rather by an analysis of the facts (including what parties did or did not do).
The second article is also of wide application, but in a different way. The advantages of Dispute Boards (DBs) are extolled, primarily by those who have served on them. What do the people whose money is at stake think of them? An answer is provided by Dr Helmut Köntges of Hochtief Construction AG, a German company with enormous experience of international contracting. He has written about “International Dispute Adjudication —Contractors’ Experiences” (at page 306). The plural is used since his examination covers 22 contracts of various types—main contracts, subcontracts and joint venture agreements—of which 13 provided for DBs. His account is most interesting. For example, he records that, in all 13 contracts, the view of the DB was not accepted by the parties, although in 10 of them the parties settled the dispute on the basis of the views expressed. In the other three cases (24%) the dispute went to arbitration. However disputes went to arbitration on five of the nine contracts where there was no DB (i.e. about 55% of the contracts). Although Dr Köntges
[2006
The International Construction Law Review

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