Alternatively, the Contractor must demonstrate a danger to life or property or,

less dramatically, that it is customary to execute the work day and night. It is
arguable that this clause is altogether unnecessary as any restrictions on working
hours seem invariably to be included in the contract details.

This clause should be read with clause 19.1 (Safety, security and protection of
the environment) which requires the Contractor to "take all reasonable steps... to
avoid nuisance to persons... resulting from pollution, noise or other causes
arising as a consequence of his methods of operation".

"...unavoidable or absolutely necessary for the saving of life...". If "unavoidable" is

not qualified by "for the saving...", the clause gives more latitude than at first sight
appears. For example, the need to pour concrete continuously could be
unavoidable and thus entitle the Contractor to work after hours.

Under clause 46 of the 2nd Edition, an inability to work extra hours gave rise to a
claim on the part of the Contractor for an extension of time. This somewhat
extraordinary means of rewarding a defaulting Contractor has, sensibly, been
discarded.

CLAUSE 46 : Rate of Progress

Clause 46 enables an Engineer to require a Contractor who is in delay for

reasons which are the Contractor's responsibility, to accelerate to complete on
time. The Contractor may be allowed to work day and night. The Employer is
entitled to recover any extra supervision costs which result.

The principal change to this clause as compared with the 3rd Edition is the ability
of the Employer to recover any additional supervision costs caused by the
acceleration. Otherwise the alterations are mainly of vocabulary.

Clause 46 is problematic. Its intent is to remove from a Contractor in culpable

delay the choice of whether to accelerate or whether to incur liquidated damages.
Sometimes the latter course may be cheaper due to the inefficiencies of
acceleration.

The difficulty is that there will often be a dispute as to whether the cause of delay
falls within clause 44.1 (Extension of time for completion) ; further there will often
be other claims for extension of time in the process of notification and
consideration, which process is likely to be at least 10 weeks long. If the
Engineer is only entitled to use the clause when he has considered and
determined all extensions of time claimed, its use could be severely restricted.
The Contractor could effectively prevent its use by a regular stream of extension
of time notices.

If the Contractor disagrees with the rejection of an application for an extension of

time, he could refuse to act upon the Engineer's notification and seek to

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persuade the Engineer or arbitrator that the delay fell within clause 44. If the
Contractor acts upon the notification and subsequently proves that the delay fell
within clause 44, the Employer may argue that the Contractor should not have
complied.

Wherever the Contractor has accelerated in order to overcome delays for which
he is not responsible, he will seek to recover from the Employer the costs of the
acceleration. These costs will often substantially exceed the costs of the
prolongation of the contract which would otherwise have resulted. The
acceleration will often have been brought about by a notice under this clause, a
refusal to grant an extension of time or both. As a failure to comply with a notice
under clause 46.1 is a ground for the termination of the contract under clause
63.1 (Default of Contractor), Contractors are likely to comply first and argue later.

When the entitlement to an extension of time has been established, the Employer
may deny the validity of the Engineer's notice. The Contractor's options are then
either to seek to recover his acceleration costs as damages for breach of
contract by the Employer (by reason of the wrong notification by the Engineer) or
else to argue for an implied agreement to accelerate. For comment on the former
argument, see under clause 2.1 (Engineer's duties and authority).

It is important to appreciate that there is no power given to the Engineer under

the contract to order acceleration at the Employer's expense. Clause 51.1
(Variations) item (f) includes a power in the Engineer to instruct the Contractor to
"change any specified sequence or timing of construction of any part of the
Works" but, even if "sequence and timing" could be interpreted as included the
Contractor's rate of progress, the word "specified" must refer to a sequence and
timing as specified by the contract. It is submitted that a programme consented to
under clause 14.1 (Programme to be submitted) does not amount to a specified
sequence, particularly in the light of clause 14.4 (Contractor not relieved of duties
and responsibilities).

It should also be appreciated that an Engineer, as agent of the Employer, will not
necessarily have the Employer's authority to order such an acceleration. Some
circumstance, perhaps only the copying of relevant correspondence to the
Employer, is needed to demonstrate the necessary authority or ratification for the
Engineer's actions.

It is therefore necessary for a Contractor to demonstrate a variation of the

contract as distinct from a variation pursuant to the contract. He must show that
the Employer and Contractor have agreed that the Contractor should accelerate
and that the Employer would pay him so to do. One must therefore find words or
conduct on the part of the Employer or the Engineer on his behalf amounting to
an offer to vary the contract and thereby to pay for the acceleration. The actual
acceleration by the Contractor would be sufficient acceptance to produce the
binding variation. Alternatively, in UK and certain other jurisdictions, it may be
sufficient to show a request to accelerate, an acceleration in the progress of
works and some benefit flowing to the Employer in order to establish a quantum

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meruit, a right to a reasonable payment for the work performed. A third
alternative and perhaps even further restricted in the jurisdictions in which it
would apply would be conduct on the part of the Employer which the Employer
intended the Contractor to rely upon and which was relied upon such that it
would be inequitable for the Employer to deny any obligation to pay the
Contractor.

Thus, where the Engineer has required the Contractor by purported notice under
clause 46 to accelerate and/or has refused him an extension, and perhaps
reminding him of his duty to complete by the time for completion, the Contractor
may respond that he is entitled to an extension and that there are no delays
which are his responsibility. If the Engineer insists, the Contractor may
accelerate warning the Engineer of his intention to claim additional payment in
due course. This, not atypical, scenario will present an arbitrator with some
difficulties. An argument that a mere refusal of an extension of time, which turns
out to have been incorrect, amounts to an implied acceleration request is unlikely
to succeed. An arbitrator may well decide, however, that where acceleration has
been insisted upon in the face of the Contractor's denial of responsibility, the
Contractor could not realistically have refused to comply given the possibility of
termination. The Employer has benefitted by early possession (and would in any
event have been compensated for any lateness by liquidated damages) and the
Contractor has incurred significant additional costs. In such circumstances, an
award in favour of the Contractor is unlikely to do grave injustice.

The ability of the Engineer to refuse consent to the Contractor's proposed

acceleration measures could give rise to problems. If the Contractor had already
implemented measures when the Engineer issued his notice and those
measures were then rejected by the Engineer, the Contractor is left exposed to
liquidated damages and must undo the current measures and propose
alternatives. A dispute would then be inevitable. This right to interfere with the
Contractor's methods is contrary to the policy of the contract as expressed in
clause 8.2 (Site operations and methods of construction) and clause 14.1
(Programme to be submitted) which leave method strictly to the Contractor.

This clause should be read with and compared to clause 14.2 (Revised
programme). There, if actual progress and the approved programme do not
conform, the Engineer may request the Contractor to produce a revised
programme showing completion on time. Normally, a request for a revised
programme would accompany a notice under the current clause.

Given the difficulties of this clause, it is perhaps unfortunate that the Engineer,
having formed the opinion that the Contractor is in delay, is obliged to notify
under this clause. Employers would be well advised to approach this means of
spurring apparently slow contractors with considerable caution.

For cases on acceleration, see Morrison-Knudsen v British Columbia Hydro and

Power (1978) 85 DLR (3d) 186 and the decision of the English Court of Appeal in
Lester Williams v Roffey Brothers (1989) 48 BLR 69.

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CLAUSE 47 : Liquidated Damages

If the Contractor fails to complete the whole or any specified Section of the
Works by the due date, the Employer may deduct or recover from the Contractor
the daily amount specified in the contract up to a given maximum amount.

If the works are handed over on a piecemeal basis, the amount of liquidated
damages is reduced proportionately.

If appropriate, a bonus clause may be added for early completion, of which

examples are given in Part II.

This clause has been substantially altered from the 3rd Edition. Not least by the
inclusion of reference to a maximum amount of liquidated damages to be
specified in the Appendix.

47.1 In view of the international nature of the contract conditions, it has no

doubt surprised many people that the concept of liquidated damages has been
retained in the 4th Edition. There are now relatively few jurisdictions in which the
concept of a penalty being an unenforceable term survives. Even in those
jurisdictions which retain the venerable doctrine, the use of the term penalty
would have been acceptable. The House of Lords in Dunlop Tyre v. New
Garage (1915) AC 1979 accepted that the name given was not conclusive.

The limit specified in the appendix would, in the U.K. and other jurisdictions
maintaining the penalty doctrine, provide an argument that the prescribed
damages were not a genuine pre-estimate. See the comment on clause 47.2
below. The limit is not expressly optional but leaving the relevant section of the
appendix blank would doubtless remove the limit. In the U.K. at least, the use of
the term "nil" in the appendix either in respect of the daily rate or the overall limit,
could result in no recovery for delay: see Temloc Ltd v. Errill Properties Ltd
(1987) 39 BLR 30.

The changes made from the 3rd Edition do not assist the working of the
liquidated damages provision. It is not clear why the simplicity of the 3rd Edition
or ICE 5th has not been pursued. The essence of an effective liquidated
damages clause is one with a very simple trigger mechanism. Two simple
questions should be asked: Has the date for completion passed? If so, is the
work complete? If not, then liquidated damages are deductible. Here, the trigger
is complicated with reference to "Time for Completion", clause 48 (Taking-Over
Certificate) and clause 43 (Time for Completion). The reference to failure "to
comply with the Time for Completion" is unfortunate as the "Time for Completion"
does not impose any obligation with which to comply. Clause 43 is relegated to
the source of the "time prescribed" whereas it is in clause 43 that one finds the
obligation to complete by any given time. The position is worsened by a conflict

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between the definition of Time for Completion which refers to "the time...as
extended under clause 44" whereas clause 43 refers to "the time stated...or such
extended time as may be allowed under clause 44". In short, one refers to a
state of affairs existing at any given time whereas the other includes any future
extensions that may be allowed by the Engineer or even an arbitrator. Thus, in
the typical situation where a Contractor is in delay but disputes that it is his fault
and where applications for extension of time have been submitted, it may be
arguable that there is no entitlement to deduct. The Employer would argue that
when the contract is read as a whole, the right to deduct is clear enough to
succeed. Nevertheless, to be sure of the matter, an Employer would be well
advised to clarify this clause.

Further, as the amount that may be deducted is defined as the number of days
between the time for completion "and the date stated in a Taking-Over
Certificate", it must be arguable that no deduction may be made until after
substantial completion has been certified. Indeed, the Time for Completion is
variable until the last extension of time has been awarded. Further, the
Employer is permitted to deduct "the amount of such damages": this phrase
suggests that the total amount of the damages needs to have been established
before deduction may take place. An Employer would counter that the final
sentence refers to the Contractor's obligation to complete the Works which, he
would say, demonstrates the intention that deduction should take place before
completion. The Contractor would be obliged to answer that the Works includes
the Defects Liability Period: see clause 49.1 (Defects Liability Period). It is
submitted that the construction contended for by the Contractor, although plainly
not intended by the draftsman is sustainable. It would be a brave Contractor,
however, that suspended or terminated under clause 69 (Default of Employer) on
the strength of deduction of liquidated damages and a robust arbitrator who
upheld the Contractor's decision.

"(which sum shall be the only monies due from the Contractor for such default)".
This statement that liquidated damages represents an exclusive remedy is
probably unnecessary in English law but is a welcome clarification in other
jurisdictions where this is far from clear. An Employer wishing to mount an
argument for recovery for delay beyond the liquidated damages will be assisted
by the words "monies due from the Contractor" and by the final sentence which
says that the "damages shall not relieve the Contractor...from any other of
his...liabilities under the contract". One problem that could result is a conflict with
clause 63.3 (Payment after termination) in the event that the delay leads to the
termination of the contract either by clause 63.1 item (a) repudiation, item (b)(ii)
non-compliance with a notice under clause 46.1 (Rate of Progress) or item (d)
persistent breach of contract. A Contractor whose contract is terminated after
the contractual completion date, would argue that the Employer's recovery is
limited to liquidated damages and seek to avoid the costs of the execution,
completion and remedying of any defects etc provided for under clause 63.3.
This argument might turn on the actual ground for termination and the precise
meaning of "such default" in clause 47.1.

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In this contract, the deduction of liquidated damages is left strictly to the
Employer. In clauses 60.2, 60.8 and 60.10, the Engineer's sometimes wide
powers to deduct from the face of the certificate are carefully restrained in
relation to liquidated damages.

The Employer is entitled to deduct liquidated damages "from any monies due or
to become due to the Contractor". There is no express limitation to sums
becoming due under this contract. Thus the Contractor has arguably agreed to
allow the deduction to take place from sums due under, for example, another
contract with the same Employer.

Bonus clauses such as the one suggested by Part II can give rise to difficulties.
For example, as the calculation of the bonus will normally be based on the period
of time between substantial completion and the contractual completion date as
extended, the Contractor may require the Engineer to consider and award
extensions of time which may be entirely theoretical because the Contractor has
in fact completed early. The wording of clause 44.1 (Extension of time for
completion) does not prevent the Engineer from granting such an extension as
the test is whether an event is "such as fairly to entitle the Contractor to an
extension". Difficulty arises when the Contractor puts forward an accelerated
programme in order to obtain his bonus and then seeks to claim extensions of
time when the Engineer, the Employer and others fail to match the programme.
This problem was considered in the case of Glenlion v. Guiness Trust (1987) 39
BLR 1989, when the Official Referee decided that whilst the Contractor was at
liberty to put forward a programme which achieved early completion, he could not
thereby impose obligations upon the designer to require the design to be ready
earlier than would have been necessary to complete on time. This is the position
in English law at present but it must be questionable whether it will be followed
elsewhere, particularly where a bonus clause has been inserted into the contract
precisely in order to encourage the Contractor to achieve the earliest possible
completion date. If the Contractor's programme had been consented to by the
Engineer under clause 14.1 (Programme to be submitted), it would be
extraordinary if the Engineer could then argue under clause 6.4 (Delays and cost
of delay on drawings) that "a time reasonable in all the circumstances" should be
judged not by reference to the approved programme but by reference to a
programme that would achieve completion on time.

In the civil law countries referred to under clause 5.1 (Languages and law), the
English concern about liquidated damages does not exist. However, under some
administrative contracts, the Administration may have additional powers to
impose penalties; this clause may be adapted to make it plain that the deductions
made are penalties and thereby the Administration may be limited to the
specified amount. With private law contracts, a Contractor is sometimes free to
argue before the courts that the damages deducted exceed the Employer's loss
in order to obtain a refund. For a brief overview of administrative law based on
the French model, see clause 5.1.

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