i-law

International Construction Law Review

INTRODUCTION

Chantal-Aimée Doerries QC

Douglas S Jones AO

Part 3 of 2017 contains a variety of papers with lessons for and from dispute resolution arising as a strong theme throughout, as well as procedural considerations arising out of legislation and standard form contracts.
First, Mathias Cheung, in a very well-written article, adopts a comparative law approach to the issue of an implied duty of good faith in the tender process. After noting the entrenched scepticism towards such a duty under English law, the article proper commences with an analysis of the Canadian jurisprudence, which has developed the concept of a “Contract A”. This is an implied contract arising during the tender process, carrying with it associated implied obligations. His article then travels on a journey across the Commonwealth, passing through Australia, before reaching the most restrictive domain New Zealand, which parallels the English approach. Cheung then considers this issue from a principled perspective, noting the tension that exists between freedom of contract and the policy benefits of encouraging a culture of fairness and integrity in tender processes. His analysis contains detailed insights into the different positions of the case law, and provides examples on how such an implied duty could work in both the public and the private sphere. The article concludes with a discussion of what is perhaps the most challenging issue in this space – how to quantify damages for a breach of such a duty. Overall, the article provides rich insights into both the common and civil law world, and presents a compelling overview of this area of law.
Adrian Bell, Aidan Steensma and Natalie Hall then turn to a discussion of exclusion clauses designed to limit damages for indirect and consequential loss under English law. The article commences by noting that a long line of English authority has construed these clauses in a very narrow way, extending only to those losses contained with the second limb of the Hadley v Baxendale test. Of course, this does not accord with the ordinary meaning of the word “consequential”, presenting the possibility for commercial or international parties to overlook this. Noting this, and other recent judicial criticism of the traditional English approach, the authors focus on the 2016 Commercial Court decision of Star Polaris. This appears to be the first reported case in which an English court has departed from this traditional rule, and allowed a broader meaning to be given to a consequential loss exclusion. The authors argue that this approach is in accordance with recent English Supreme Court authority regarding the proper interpretation of contracts. In supporting such a broad view, the authors argue that this view is both sound in principle, and also mirrors developments in other jurisdictions such as Australia. Ultimately, the article presents a well-written articulation of the issues presented by the current approach, as well as a reasoned case for why the English approach is on the brink of change.

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