CONSTRUCTION AND CONTRACT LAWS

CONSTRUCTION LAWS

DEFINITION
is a branch of law that deals with matters relating to
building construction, engineering and related fields.
 Construction Law is neither a legal term of art nor a
technical one. It is used to cover the whole field of law which
in one way another affects the construction industry
It is used interchangeably with building law and
engineering law. However, construction law appears to be
the correct term to adopt due to its general acceptance in the
industry and its wider scope encompassing the building law
and engineering law.
 CONTRACT LAWS

DEFINITION
An agreement between private parties creating
mutual obligations enforceable by law.
SOURCES
Common law
contracts require strict adherence to the mirror image rule,
while the UCC allows for minor changes to a contract that
do not significantly impact its terms. We will focus on the
element of acceptance. Common law is like a precedent set
by prior court rulings. In other words, no set-in-stone law
applies to common law decisions. And, decisions may vary by
court or state.
Next, common law contracts also use the mirror image
rule, meaning acceptance must be for the exact same terms
and conditions presented in the offer. Nothing is permitted
to change or the offer is no longer valid.
 Uniform Commercial Code
Unlike common law, the Uniform Commercial
Code deals specifically with commercial contracts. It is
actually a set of laws that governs transactions between states
and in business transactions. It was designed to create a
uniform set of standards that regulate fairness in commercial
transactions.
ELEMENTS OF A CONTRACT

OFFER ACCEPTANCE FREE CONSENT

LEGAL PURPOSE
CONSIDERATIONS AND CAPACITY TO
CONTRACT
 TERMINATION/DISCHARGE OF
CONTRACT

BREACH OF
PERFORMANCE
CONTRACT

CONSENT OR
IMPOSSIBILITY
AGREEMENT
OF
BETWEEN
PERFORMANCE A CONTRACT PARTIES
CAN BE
TERMINATED
BY
 BY PERFORMANCE

In engineering/ construction contracts, a contract is

considered to be discharged by performance when:
The contractor has carried out all his obligation under the contract
,i.e. undertaken the construction, installation, etc, rectified all
defects, conducted the servicing and maintenance, done all
necessary training, supplied all as-built and maintenance
records per the contract; and
 BY BREACH

defines as a refusal or failure by a party to a contract to fulfil an

obligation imposed on him under that contract.
an unjustified failure to perform all or any part of what is
promised in a contract.
It may happen that in certain instances, either one or both of the
contracting parties, without sufficient excuse or justification, fails to
perform the contract in accordance with the terms of agreement.
Timing of the breach:
Before performance is due (also called anticipatory breach)
At the time performance is due
During the performance of the contract
 BY AGREEMENT

S 63, Contract Act 1950:

If the parties to a contract agree to substitute a new contract for it, or
to rescind or alter it, the original contract need not be performed.

S 64, Contract Act 1950:

every promise may dispense with or remit, wholly or in part, the
performance of the promise made to him, or may extend the time for
such performance, or may accept instead of it any satisfaction which
he thinks
fit.
 BY FRUSTRATION OF
PERFORMANCE

Parties may enter into a contract with a fervent (strong-willed)

hope of fulfilling their respective bargains by carrying out
their reciprocal promises.
However, when the time for performance is actually due,
owing to a change of circumstances or the occurrence of
unforeseen conditions, the parties may find it not possible to
physically or legally discharge their obligations under the
contract.
A contract is terminated when performance of the contract has
become
impossible.
Few grounds that may cause performance of a contract
become impossible: destruction of contract subject matter,
death, or personal incapacity of the parties.
 REMEDIES FOR BREACH OF
CONTRACT
When there is a breach of contract, the innocent party, is entitled to one or
more of the following remedies:
Damages: Remedies claimed by an innocent party for the damage, loss or injury
he has suffered for breach of contract.
Specific performance: A court order to force the defaulting party to perform
what he has promised to do in the contract (normally when the remedy of
damages is not adequate to compensate the innocent party).
Injunction: An order of the court directing a person to refrain from doing or
continuing to do an act complained of, or restraining him from continuing an
omission.
DAMAGES
General damages:
Not specifically pleaded
Assessed and awarded by court
E.g. for pain, inconvenience, disappointment

Special damages:
Must be specifically pleaded and proved
E.g. loss of profit, interest, etc.
 Nominal damages:
Awarded where there is a technical breach but no loss
Always a derisory (small) sum
E.g. trespass, failure of claimant to mitigate loss, or where the
plaintiff is better off (away from) as a result of the breach.

Substantial damages:
Pecuniary compensation to put the innocent party in the
position he would have enjoyed had the contract been
performed.
For loss actually sustained
Most common form of compensation
 Exemplary damages:
Vindictive or punitive in nature and are awarded so as to punish a
defaulting party
Far greater than actual loss sustained
E.g. defamation, degrading someone, breach of promise (e.g. to
marry), etc.