International Construction Law Review
INTRODUCTION
HUMPHREY LLOYD DOUGLAS S JONES
This issue of The International Construction Law Review begins with an article contributed by Virginie A Colaiuta of Hughes Hubbard and Reed LLP in Paris, in which she explores the French approach to the application of penalties for delay and its impact on subcontractors (page 268). A particular focus is placed on the economics of the subcontractor’s decision to either accelerate works to comply with contract deadlines or risk paying liquidated damages and penalties. Colaiuta explains the French rules applicable to penalty and liquidated damages clauses and analyses the approach of the French courts to such rules. She then considers the effect of the court’s decisions on the economics of accelerating construction work to meet contractual deadlines, concluding that, as French courts tend to reduce excessive penalties for delay, the only way to encourage respect for a completion deadline or obtain acceleration of the works is to offer a financial incentive to contractors.
Our second article takes us to Germany and continues the theme of acceleration issues with an article by Dr Stefan Osing from Heuking Kühn Lüer Wojtek in Düsseldorf (page 278). Osing provides guidance to the “Allgemeinen Vertragsbedingungen für die Ausführung von Bauleistungen” (the General Contract Terms for the Execution of Construction Works), being a pre-formulated set of clauses, commonly adopted in German construction projects, designed to partly modify the German law applicable to works and services in construction contracts. In particular, he details the proper approach that should be taken to section 6 of the Terms which provides for two legal options in the event of a hindrance: extension of time and damages. These two articles are based on the authors’ contributions to the session on “Time and Acceleration Issues Affecting International Construction Contracts” held at the International Bar Association’s conference in Madrid last year.
These papers are followed by an analysis of Tercon Contractors Ltd v. British Columbia (Transportation and Highways), an interesting decision of the Supreme Court of Canada on the interpretation of contractual provisions relating to eligibility to bid and an exclusion of compensation for damages resulting from participation in the tendering process, by R Bruce Reynolds and Sharon C Vogel, both of Borden Ladner Gervais LLP, Toronto (page 284). The authors set the scene with an outline of the essential principles of Canadian tendering law established over the past 30 years, which establish that, in order to maintain the integrity and business efficacy of the tendering process, bidders must be treated fairly and the bidding process must be carried out in a transparent manner. They then discuss the Tercon decision through the lower courts to the Supreme Court, ultimately finding that the Canadian law on the test as to the enforceability of an exclusion clause is now clear and requires the court to consider, first, whether the
The International Construction Law Review [2010
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