Construction Law and Contract (Sri Lanka)

Law and Contract ICBT-Nugegoda

I.A. Anhaf Ahamed NG/HNDQS/06/08 P a g e | 1

Acknowledgment

This assignment would not possible without encouragement of our “Law and Contract” lecturer

Ms. Harshi Madubashini B.Sc. I also take this opportunity to express deep sense of gratitude for

all staff members of ICBT campus Nugegoda. As well as I take this opportunity to thank my

parents. Finally I thank my friends. Because without these people’s support and encouragement I

can’t submit this assignment at right time



Table of Contents

Executive Summary ........................................................................................................................ 5

1.0 Introduction ............................................................................................................................... 6

2.0 Task 01 ...................................................................................................................................... 7

2.1 Elements of the National Legal System of Sri Lanka ........................................................... 7

2.1.1 English Law ................................................................................................................... 8

2.1.2 Roman Dutch Law ......................................................................................................... 9

2.1.3 Kandyan Law ............................................................................................................... 11

2.1.4 Theswalamai Law ........................................................................................................ 12

2.1.5 Muslim Law ................................................................................................................. 13

2.2 Sri Lankan Court System and Its Procedures ..................................................................... 14

2.2.1 Supreme Court ............................................................................................................. 14

2.2.2 Court of Appeal............................................................................................................ 16

2.2.3 High Courts .................................................................................................................. 18

2.2.4 District Court ............................................................................................................... 20

2.2.5 Magistrate’s Court ....................................................................................................... 22

2.2.6 Primary Courts ............................................................................................................. 24

2.2.7 Other Courts and Tribunals .......................................................................................... 25

3.0 Task 02 .................................................................................................................................... 26

3.1 Negotiation .......................................................................................................................... 27

3.2 Conciliation ......................................................................................................................... 28

3.3 Mediation ............................................................................................................................ 29

3.4 Arbitration ........................................................................................................................... 30

3.5 ADR Benefits ...................................................................................................................... 31

3.5.1 Save Time .................................................................................................................... 31

3.5.2 Save Money ................................................................................................................. 31

3.5.3 Increase Control over the Process and the Outcome ................................................... 31



3.5.4 Preserve Relationships ................................................................................................. 31

3.5.5 Increase Satisfaction .................................................................................................... 32

3.5.6 Improve Attorney-Client Relationships ....................................................................... 32

3.6 Comparing Few ADR Methods .......................................................................................... 33

3.7 ADR Case Studies............................................................................................................... 34

3.7.1 Negotiation ................................................................................................................... 34

3.7.2 Conciliation .................................................................................................................. 36

3.7.3 Mediation ..................................................................................................................... 37

3.7.4 Arbitration .................................................................................................................... 39

4.0 Task 03 .................................................................................................................................... 40

4.1 Tort ...................................................................................................................................... 40

4.1.1 Tort law ........................................................................................................................ 40

4.1.2 Case Study ................................................................................................................... 44

4.2 Significance of Common Law within Construction Process .............................................. 46

4.2.1 Common Law............................................................................................................... 46

5.0 Task 04 .................................................................................................................................... 50

5.1 Main Parties to a Construction Contract ............................................................................. 50

5.1.1 The Employer (Client) ................................................................................................. 50

5.1.2 The Contractor ............................................................................................................. 50

5.1.3 The Engineer (Consultant) ........................................................................................... 51

5.2 Roles and Responsibilities in Relation to the Construction Contract ................................. 52

5.2.1 Employer ...................................................................................................................... 52

5.2.2 Consultant .................................................................................................................... 55

5.2.3 Contractor .................................................................................................................... 57

5.3 The principles of law applied to the main parties in the above project and Advice for the

Client ......................................................................................................................................... 61

5.4 Contractual Obligations of a Contractor and Client in Construction Work ........................ 63

5.4.1 Contractor’s Obligations .............................................................................................. 63

5.4.2 Client’s (Employer’s) Obligations ............................................................................... 64

6.0 Task 05 .................................................................................................................................... 65



6.1 Company Law ..................................................................................................................... 65

6.2 Employment Law ................................................................................................................ 67

6.2.1 Employment Law Case Study ...................................................................................... 69

6.3 Health Safety and Welfare Law .......................................................................................... 70

Health and Safety at Work etc. Act 1974 ............................................................................. 70

The Management of Health and Safety at Work Regulations 1999 ..................................... 70

The Construction (Design and Management) Regulation 2007 ........................................... 71

6.3.1 Health Safety and Welfare Law Case Studies ............................................................. 74

6.4 The Sale, purchase and rental of goods Law ...................................................................... 75

Sale of Goods Act 1979 Summary........................................................................................ 75

6.4.1 The Sale, purchase and rental of goods Law Case Studies .......................................... 76

6.4.2 Hariligdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd (1991) ......... 76

6.5 Land law.............................................................................................................................. 77

6.5.1 Land Development Ordinance – No. 19 of 1935 ......................................................... 77

6.5.2 State Land Ordinance – No. 08 of 1947 .......................................................................... 77

6.5.3 State Land (Recovery of possession) Act – No. 07 of 1979 ........................................ 77

6.5.4 Land Acquisition Act – No. 09 of 1950 ....................................................................... 77

6.5.6 Title Registration Act – No. 21 of 1998 ...................................................................... 77

6.5.7 Land law Case Studies ................................................................................................. 78

6.6 Property law ........................................................................................................................ 79

6.6.1 Property Law Case Studies .......................................................................................... 81

6.7 The Effect of the European Legal Systems on Related Construction Activities ................ 82

6.7.1 The European law of contract ...................................................................................... 83

6.7.2 Design team combination with European law ............................................................. 83

6.7.3 Case Study ................................................................................................................... 85

7.0 Conclusion .............................................................................................................................. 86

8.0 References ............................................................................................................................... 87



Executive Summary

In this assignment I have mentioned the main tasks of Law and Contracts. I have included every

Law and contract subjects regarding construction industry briefly as possible as I can.



1.0 Introduction

Construction Industry is second Largest Industry in the world. There are several parties involving

in this industry. Each and every personal have their own duties and responsibilities.

When considering about these projects many places needed with law.

In this Assignment I tried to explain Legal Systems of Sri Lanka and court systems. I also try to

explain Construction disputes and methods of dispute resolutions too.

Furthermore I have explained tort lawn and common law in construction industry.

In this this assignment I have tried my best to achieve all the criteria well.



2.0 Task 01

2.1 Elements of the National Legal System of Sri Lanka

Sri Lanka is a multicultural country which is consisting Buddhist, Hindu, Muslim and Christian region

people. This country also ruled by Portuguese, Dutch and English governments. Therefor the legal

systems of Sri Lanka reflect the customs of the various communities which form Sri Lankan Society and

it also reflect the Dutch and English Law too. As per the results of these facts the Legal system of Sri

Lanka is a highly complex fusion of several laws.

There are 5 major laws applied in Sri Lanka,

English Law

Roman Dutch Law

Kandyan Law

Muslim Law

Thesawalamai



2.1.1 English Law

English Law is one of the well-established systems of law introduced to many countries around

the world including the British Colonials and Dominions.

There are three sources of English Law;

Common Law

Equity

Legislation

2.1.1.1 Common Law

Common Law is also known as Judge-declared law which is developed on case by cases.

2.1.1.2 Equity

Equity is a branch of English law. It says when plaintiffs would go to the court and complain of

harsh or inflexible rules of common law which prevented "justice" from prevailing. This is based

on a judicial assessment of fairness as opposed to the strict and rigid rule of common law. For

centuries, the common law was referred to as the law, in contrast with equity.

2.1.1.3 Legislation

Legislation is the act or process of making or enacting laws. It refers to the actual law enacted by

a legislative body at the national, state, or local level.



2.1.2 Roman Dutch Law

Roman-Dutch law, the system of law produced by the fusion of early modern Dutch law, chiefly

of Germanic origin, and Roman, or civil, law. It existed in the Netherlands province of Holland

from the 15th to the early 19th century and was carried by Dutch colonists to the Cape of Good

Hope, where it became the foundation of modern South African law. It also influenced the legal

systems of other countries that had once been Dutch colonies, such as Sri Lanka and Guyana.

In Sri Lanka Roman Dutch Law act as a Residual law which is the law governing in case any law

is silent or not possible to use.

There are three sources of Roman Dutch Law;

Treatises of Jurists

Statutes

Decisions of Courts

2.1.2.1 Treatises of Jurists

From the fourteenth to the eighteenth centuries a succession of Dutch Jurists were engaged in

formulating and setting out the principles of the law prevailing in the Netherlands. It was

developed by great writers, such as, Hugo Grotius, Simon Van Leewen, Johannes Voet, Vander

Keesal, and Vander Linden. Some of these generally with all the departments and branches of

the law, while others treat in detail of particular subjects.

2.1.2.2 Statutes

A statute is a written law passed by a government. Statutes set forth general propositions of law

that courts apply to specific situations.

A statute may;

Forbid a certain act

Direct a certain act

Make a declaration

Set forth governmental mechanisms to aid society.

2.1.2.3 Decisions of Courts

This is the decisions where taken by courts for several cases. It is an important source of the

modern Roman Dutch Law in Sri Lanka.



There are several applications of Roman Dutch Law in Sri Lanka;

o Law of Evidence

o Constitutional Law

o Commercial Law

o Private Law



2.1.3 Kandyan Law

Before 1815 Kandyan Kingdom was ruling the Sri Lanka. When British Government took over

the Central of Sri Lanka the Law of Kandyan Kingdom only apply to cultural Sinhalese whose

can trace their family back to the Kandyan provinces during the period of the Kandyan kingdom

in central Sri Lanka. This Law is known as Kandyan Law in present day Sri Lanka. This Law

does not apply to all Sinhalese who are now resident in the Kandyan provinces. That remains

applicable to Kandyan Sinhalese in present day Sri Lanka relates to marriage, divorce, and

interstate succession.

Kandyan Sinhalese have the option of choosing to marry under the Marriage and Divorce

(Kandyan) Act, or the General Marriage Ordinance. Kandyan Sinhalese who chooses to marry

under the Kandyan Act will be governed by Kandyan law in matters relating to marriage, divorce

and interstate succession by virtue of the Kandyan Law Ordinance, as well as the Kandyan

Matrimonial and Inheritance Ordinance.

Kandyan laws on adoption are also applicable to those who marry under Kandyan Law. The

General Law applies in other related issues such as alimony and child custody.

The relevant laws on this topic are mostly in the Kandyan Declaration and Amendment

Ordinance, and the Kandyan Marriages and Divorce Act.



2.1.4 Theswalamai Law

Theswalamai Law is based on ancient customs of Jaffna Tamils in Sri Lanka. It applies to Tamil

inhabitants of the Jaffna Area in Northern Sri Lanka. This customary and personal law also

applies to several Jaffna Tamils who no longer live in the Jaffna Area.

The only Thesawalamai laws that are applicable to Jaffna Tamils relate to property and interstate

succession resulting from marriage.

Thesawalamai Law, which was organized by the Dutch in 1706, gained legal validity when the

British enacted the Thesawalami Regulation No. 18 of 1806. Other relevant laws are Ordinance

No. 5 of 1869, the Matrimonial Rights and Inheritance Ordinance of 1911, amended by

Ordinance No. 58 of 1947, The Thesawalamai Ordinance and Thesawalamai Pre-Emption

Ordinance, and the Jaffna Matrimonial Rights and Inheritance Ordinance No.1 of 1911.



2.1.5 Muslim Law

In Family Law related issues, the Muslim Special Laws apply to all Muslims in Sri Lanka. When

a Muslim marries another Muslim, the bride and the groom do not have the option of getting

married under the General Law, unlike in the case of Kandyan Sinhalese. Marriage, divorce and

other related issues involving Muslims are governed by the Marriage and Divorce (Muslim) Act,

no.13 of 1951, and any subsequent amendments.

Issues related to interstate succession and donations, involving Muslims, are dealt with under the

Muslim Interstate Succession Ordinance No.10 of 1931, and any subsequent amendments.



2.2 Sri Lankan Court System and Its Procedures

The court-structure in Sri Lanka consists of

A Supreme Court

A Court of Appeal

High Courts

District Courts

Magistrate’s Courts

Primary Courts

Additionally, there are numerous tribunals, etc.

2.2.1 Supreme Court

The Supreme Court is the highest and final court of record, and works on final civil and criminal

appellate jurisdiction.

Plaintiffs who do not agree with a decision of the original court, which are from civil, criminal,

or Court of Appeal, he or she may take the case before the Supreme Court with permission from

the Court of Appeal or special permission from the Supreme Court. However the Supreme Court

will only agree to consider cases involving a considerable legal issue.

The Supreme Court is composed of a Chief Justice and not less than six, and not more than ten,

other judges.

For a case that fall under the several jurisdictions of the Supreme Court are heard by a bench of

at least three judges of the Supreme Court but the Chief Justice with the authority to increase the

number of Supreme Court judges hearing a particular case to five or more judges especially if the

issue under consideration is one of general and public importance. As a result at the same time

different cases may be heard by several judges of the Supreme Court sitting apart.



The Supreme Court is entrusted with certain exclusive jurisdictions;

Subject to provisions in the Constitution

Jurisdiction over constitutional matters

Fundamental rights issues.

Jurisdiction over questions concerning the constitutionality of a parliamentary bill or a

particular provision in the bill

Certain constitutional requirements

Exclusive jurisdiction to hear and determine issues relating to the interpretation of the

Constitution.

Exclusive jurisdiction to hear and determine issues relating to the infringement of

fundamental rights by Executive or Administrative action

o These fundamental rights include

Freedom of thought

Conscience and religion

Freedom from torture

Right to equality

Freedom from arbitrary arrest

Detention and punishment

Prohibition of retroactive penal legislation

Freedom of speech, assembly, association and movement.

The Supreme Court also workouts on consultative jurisdiction. If the President of the

Republic deems that a question of law or fact that has arisen.

Exercises jurisdiction over legal issues related to the election of a President of the

country, and legal issues surrounding a referendum.

Legal issues surrounding any breach of privileges of Parliament by any person also fall

under the purview of the Supreme Court.

The age of retirement for Supreme Court judges is 65 years.



2.2.2 Court of Appeal

The Court of Appeal is the first appellate court for decisions of all original courts and certain

Tribunals.

The Court of Appeal is composed of the President of the Court, and not less than six, and not

more than eleven other judges. Many cases at the Court of Appeal are presided over by a single

judge.

The Court of Appeal;

Hears appeals against judgments of the High Courts

Exercises appellate jurisdiction for the correction of errors in fact or in law at a High

Court, or any Court of first instance, or Tribunal, or other Institution.

Jurisdiction to affirm, reverse, correct, or modify a judgment

Give directions to a Court of first instance, Tribunal, or other Institution, or order a new

trial, or order additional hearings.

Has the authority to receive and admit new evidence additional, or supplementary, to

evidence already recorded in a court of first instance.

Exercising its power to examine and reverse a judgment of any court of first instance

Has the authority to examine any record of any court of first instance.

Exercises the power to grant and issue, as provided by law, writs of certiorari,

prohibition, procedento, mandamus, and quo warranto.

Exercises jurisdiction to grant writs of habeas corpus in order to bring before the Court a

person who has to be dealt with according to the law or to bring before the Court a person

illegally or improperly detained in public or private custody.

Grants injunctions

Exercises the jurisdiction to try petitions challenging the election of a Member of

Parliament.

Hearing Parliamentary election petitions (by the President of the Court of Appeal, or by a

judge of the Court of Appeal nominated by the President of this Court, or by more judges

of the Court of Appeal nominated by the President of this Court)

The Court of Appeal sits in Colombo. The Chief Justice may direct that particular sittings of the

Court be held in another judicial zone or district.



Appeals against judgments, sentences and orders of the High Court are heard by at least two

judges of the Court of Appeal.

Other issues before the Court may be heard by a single judge of the Court of Appeal.

If the Court hearing a case consists of two judges and they fail to agree on a decision, the issue is

reviewed by three judges of the Court of Appeal.

The age of retirement for Court of Appeal judges is 63.



2.2.3 High Courts

Trials at a High Court are conducted by the State (Sri Lanka), through the Attorney-General’s

Department. The Attorney-General’s Department prosecutes on behalf of the State.

Murder trials and various offenses against the State are tried at the High Court; other criminal

offenses are tried at a Magistrate’s Court.

While some High Court trials will have a jury, some trials will not have a jury. The types of

cases that require a jury are provided in the Second Schedule of the Judicature Act No.2 of 1978.

Also, the Attorney-General has the authority to determine whether a case that does not fall into a

category provided in the Second Schedule of the Judicature Act No.2 of 1978 should nonetheless

have a jury.

The Penal Code stipulates the types of cases argued in a High Court: “The Penal Code defines

most of the criminal offenses known to our law. And the Code of Criminal Procedure Act. No:

15 of 1979 sets out which of these offenses [can be tried] by each court [High Court and

Magistrate’s Court].” 13

The High Court is composed of not less than ten and not more than forty judges. This Court sits

in 16 provinces in the country (16 High Courts).

The High Court of each province exercises:

Original jurisdiction over prosecution of offenses committed within a particular province.

Admiralty jurisdiction, which is usually exercised in Colombo, the capital city.

Commercial jurisdiction, which is vested by the High Court of the Provinces (Special

Provisions) Act, No. 10 of 1996.

Jurisdiction to hear cases involving attempts to influence the outcome of a decision made,

or an order issued, by the Judicial Service Commission. This jurisdiction is vested by

Article 111 L (2) of the Constitution.

Applications for the return of, or access to, a child, under the Hague Convention, is

handled by the High Court of the Western Province (Civil Aspects of International Child

Abduction Act, No: 10 of 2001).

Appellate jurisdiction over convictions, sentences, and orders imposed by the

Magistrate’s Courts and Primary Courts within the province.



Writ jurisdiction in respect to powers exercised under any law or statutes enacted by the

Provincial Council of that particular province, with regard to an issue delineated in the

Provincial Council List.

Appeals of decisions reached by Labour Tribunals, Agrarian Tribunals, and Small Claims

Courts.

The Provincial High Court sits in the following cities: Colombo, Kalutara, Galle, Matara,

Batticaloa, Jaffna, Chilaw, Negombo, Gampaha, Kegalle, Kurunegala, Kandy, Avissawella,

Ratnapura, Badulla, and Anuradhapura.

Judges of the High Court are appointed by the President of the Republic on the recommendation

of the Judicial Service Commission, and in consultation with the Attorney-General. The

President of the Republic, acting on the advice of the Judicial Service Commission, exercises

authority in disciplinary matters concerning the High Court judges. The President may terminate

the service of a High Court judge on the advice of the Judicial Service Commission.

The age of retirement for High Court judges is 61.



2.2.4 District Court

District Courts are the Courts of first instance for civil cases. District Courts have jurisdiction

over all civil cases not expressly assigned to the Primary Court or a Magistrate’s Court.

Sri Lanka has 54 judicial districts. Every District Court is a court of record and is vested with

unlimited original jurisdiction in all civil, revenue, trust, insolvency and testamentary matters,

other than issues that are assigned to any other court by law.

Certain specific civil issues handled by the District Courts include:

Cases related to ownership of land.

Action by landlords to eject tenants.

Action to recover debts of more than Rs. 1,500.

Action in connection with trademark and patent rights, and infringement of copyright

laws.

Claims for compensation of more than Rs. 1, 500 for injuries caused by negligence.

Divorce cases (Formerly, divorce cases were handled by the now defunct Family Courts).

Commercial disputes that are more than three million rupees in monetary value fall within the

purview of the High Court in Colombo, the administrative capital, in accordance with the High

Court of the Provinces (Special Provisions), Act No. 10 of 1996.

There is a standard form of plaint for each type of action, and if necessary, there may be

variations to the form.

The normal procedure is for the filing of a plaint by the plaintiff. The plaint is argued before a

District Court judge, and if the judge is satisfied that all matters are in order, an order may be

issued to serve summons, along with a copy of the plaint, on the defendant(s). Usually, the

plaintiff, or the plaintiff’s attorney, must ensure that the Court’s fiscal officer serves the

summons, with a copy of the plaint, to the defendant.

The defendant appears in court on the summons returnable date. The defendant, or his or her

lawyer, is provided with a date by which an answer to the plaint is required.

Further pleadings may be filed, especially if the defendant files a counter-claim, a claim in

reconvention. The counter-claim, if any, must relate to the issue brought before the District

Court by the plaintiff. The plaintiff may then file a replication in response to the defendant’s

claim in reconvention.



The above procedure is the normal procedure at the District Court. There is also a Summary

Procedure for the District Court provided in Chapter 53 of the Civil Procedure Code.

Judges of the District Courts are appointed by the Judicial Service Commission (See section on

High Courts for information on the JSC). The JSC has the power to dismiss and maintain

disciplinary control over the District Court judges.

The retirement age for District Court judges, generally, is 60 years.



2.2.5 Magistrate’s Court

The Magistrate’s Courts are established under the Judicature Act, No.2 of 1978.

Each Judicial division has one Magistrate’s Court, and there are 74 judicial divisions in Sri

Lanka.

Each Magistrate’s Court is vested with original jurisdiction over criminal offenses (other than

offenses committed after indictment in the High Court.)

In cases involving criminal law, the Magistrate’s Courts and the High Court are the only Courts

with primary jurisdiction. The respective domains of these Courts are detailed in the Code of

Criminal Procedure.

Appeals from these courts of first instance may be made to the Court of Appeal and, under

certain circumstances, to the Supreme Court, which exercises final appellate jurisdiction.

The vast majority of the nation’s criminal cases are tried at the Magistrate’s Courts level, which

forms the lowest level of the judicial system.

Cases may be initiated at a Magistrate’s Court by any police officer or by anyone else making an

oral or written complaint to the Magistrate. The Magistrate is empowered to make an initial

investigation of the complaint, and to determine whether his or her Court has proper jurisdiction

over the matter, whether the matter should be tried by the High Court, or whether the matter

should be dismissed.

If it is determined that the Magistrate’s Court has the proper jurisdiction over the matter, the

prosecution may be conducted by the complainant (plaintiff), or by an officer of the Government,

including the Attorney-General, the Solicitor-General, a state counsel, or any officer of any

national or local government office.

At the trial, the accused has the right to call and cross-examine witnesses.

Trials are conducted without a jury, and the verdict and sentence are given by the Magistrate.

Any party in a case who is in disagreement with a judgment has the right to appeal the judgment,

on any point of law or fact, at the Court of Appeal.

If the police decide not to institute criminal proceedings in a Magistrate’s Court, the complainant

has the option of filing a private plaint, and the complainant may retain an attorney for this

purpose.



As indicated earlier, while murder trials and various offenses against the State (Sri Lanka) are

tried in a High Court, other criminal offenses are tried in a Magistrate’s Court. The Penal Code

defines which court, a Magistrate’s Court or a High Court, has the necessary jurisdiction (Code

of Criminal Procedure Act No.15 of 1979).

If a new offense is codified by law, for instance the Prevention of Terrorism Act, the relevant

statute will indicate the manner of trial.

The Magistrate’s Courts are ordinarily empowered to impose the following sentences: A fine of

up to Rs. (rupees) 1,500.00, and/or two years of rigorous or simple imprisonment, unless special

provisions vest the Magistrate’s Courts with the power to impose higher penalties.

Magistrates are appointed by the Judicial Service Commission (JSC), and the Commission

exercises disciplinary oversight over the judges, including the power of dismissal (See section on

High Courts for information on the Judicial Service Commission).

The retirement age for Magistrate’s Court judges, generally, is 60 years.



2.2.6 Primary Courts

Each Primary Court is vested with the following jurisdictions:

Original civil jurisdiction over cases involving debt, damages, demands, or claims that do

not exceed Rs. 1,500.

Enforcement of by-laws by local authorities and disputes relating to recovery of revenue

by these local authorities.

Exclusive criminal jurisdiction over cases relating to offenses “prescribed” by regulation

by the Justice Minister.

Offenses in violation of the provisions of any Parliamentary Act, or subsidiary

legislation, that is related to jurisdiction vested in the Primary Courts.

There are seven Primary Courts, They are in;

Anamaduwa

Angunukolapelessa

Kandy

Mallakam

Pilessa

Wellawaya

Wennappuwa.

In all other divisions, the Magistrate’s Court exercises the jurisdiction of the Primary Courts.

Requests for revision of orders made by a Primary Court are handled by the High Court in that

province.

All Primary Court judges are appointed by the Judicial Service Commission (JSC), which is also

vested with the power of dismissal of the Primary Court judges.

The retirement age for Primary Court judges is 60.



2.2.7 Other Courts and Tribunals

The other courts include the Kathi Court, the special tribunal that adjudicates on matrimonial

matters relating to Muslims. Buddhist ecclesiastical matters that fall under the purview of the

Buddhist Temporalities Ordinance of 1931 are heard by the ordinary courts. Disciplinary matters

pertaining to Buddhist clergy are handled by religious councils which are under the authority of

the Buddhist priests themselves.

There are numerous administrative tribunals, such as the Inland Revenue Board of Appeal, The

Workmen’s Compensation Tribunals, Labour Tribunals, the Board of Appeal under the Factories

Ordinance, Tribunals under Agricultural Productivity Law, Labour Tribunals under the Wages

Board Ordinance, etc.

Most decisions of these tribunals can be appealed at the Court of Appeal; when regarding a

substantial question of law, the decision of the Court of Appeal may be taken up at the Supreme

Court.



3.0 Task 02

“An arbitral tribunal shall afford all the parties an opportunity, of presenting their

Respective cases in writing or orally and to examine all documents and other material

furnished to it by the other parties or any other person. The arbitral tribunal may, at the

request of a party, have an oral hearing before determining any question before it.”

(Arbitration Act, 1995)

Above mentioned statement says that, it’s a duty of tribunal to provide an opportunity for

Claimant and Respondent to provide written and oral evidences and other evidences regarding

the construction disputes. It also says tribunal should have oral hearing from each party

regarding the disputes.

According to above statement arbitration is better dispute resolution method. There are many

advantages in above mentioned statement. The above statement says that tribunal has to provide

opportunity both parties to provide their evidences which may be written or any other sources.

This is a good advantage for both parties to provide their documents as evidences to tribunal.

This may help them to show what is the dispute arise from other party.

When we considering more on above statement it says the tribunal should take an oral hearing

from each party regarding the dispute unlike adjudication. This may be an opportunity to provide

their opinion regarding the dispute and negligence of opposite party.

Considering about all the fact it will be helpful for tribunal to analyse the dispute and give a fare

judgment for parties.

If the arbitration is not happened according to above mentioned statement there will be several

problems. According to above statement there should be a hearing from both parties. If the

tribunal did hearing from party, the judgement may favourable for one party.

When it considering about disputes there are a several dispute resolution methods, such as;

Litigation

Adjudication

ADR – Alternative Dispute Resolutions

When it considering about alternative Dispute Resolution, there are four methods;

Negotiation

Conciliation

Mediation



Arbitration

3.1 Negotiation

Negotiation is the most direct method for resolving disputes is for the parties to work out their

own differences. It is a voluntary process by which parties attempt to reach a mutually

satisfactory agreement through informal and unstructured discussions. Successful negotiations

usually focus on problem solving and trying to satisfy both parties' interests without determining

who is right and who is wrong.

In the process of negotiation;

The parties remain in control of the outcome

No result is imposed on the parties, and they are free to walk away from the process at

any time.

A neutral third-party is usually not present

Participants often employ attorneys trained in problem-solving to represent their interests

in negotiation (this is not essential)

Negotiation is especially valuable in situations where future interaction between the parties is

desirable because negotiation is less confrontational than litigation and helps restore, preserve or

strengthen the parties' business relationship.



3.2 Conciliation

Conciliation is another dispute resolution process that involves building a positive relationship

between the parties of dispute. It is basically different than mediation and arbitration in several

respects. Conciliation is a method Employed in civil law countries (like Italy.

The conciliation is typically employed in labour and consumer disputes. The “conciliator” is an

impartial person that assists the parties by driving their negotiations and directing them towards a

satisfactory agreement unlike arbitration. In that conciliation is a much less adversarial

proceeding and it seeks to identify a right that has been violated and searches to find the optimal

solution.



3.3 Mediation

Mediation is similar in many ways to negotiation. In general both methods are;

Private

Voluntary

Informal

The focus in both is on problem-solving rather than on determining who is right and who is

wrong, and the parties themselves decide the outcome.

In mediation a neutral third party is chosen by agreement to help the parties resolve the dispute.

The mediator listens to each side's problem in an informal setting and helps the parties come up

with ideas for resolving the dispute. Also the mediator encourages each party to attempt to

understand and evaluate the interests of the other party, and he or she generally does not judge

the strength of either side's case. Although he or she has no authority to impose an outcome on

the parties if they fail to reach agreement and both sides are free to walk away from the process

at any time.



3.4 Arbitration

In arbitration, a dispute is submitted to one or more impartial persons, usually experts in the

construction field, who decide the outcome. The arbitrator's decision is private and binding

unless the parties have agreed to an advisory opinion. In binding arbitration, the arbitrator's

decision may be appealed to court, but an arbitrator's decision can be reversed only in

exceptional circumstances such as obvious bias by the arbitrator or fraud.

Even though arbitration is more structured than negotiation or mediation, it is more flexible, and

less costly, than litigation. Generally, the parties decide how formal the arbitration proceeding

will be and what rules they will follow regarding procedures such as discovery, presentation of

evidence, and the necessity of a detailed opinion supporting the arbitrator's decision. Fewer

discoveries are conducted in preparing a case for arbitration than for trial.



3.5 ADR Benefits

Using ADR methods for disputes may have a variety of benefits, depending on the type of ADR

process used and the circumstances of the particular case. Some potential benefits of ADR are

summarized below.

3.5.1 Save Time

A dispute often can be settled or decided much sooner with ADR unlike court procedure.

Solution will give often in a matter of months, even weeks, but bringing a lawsuit to trial can

take a year or more.

3.5.2 Save Money

When cases are resolved earlier through ADR, the parties may save some of the money they

would have spent on

Attorney fees

Court costs

Experts' fees

Other litigation expenses.

3.5.3 Increase Control over the Process and the Outcome

Parties typically play a greater role in shaping both the process and its outcome in ADR. In most

ADR processes, parties have more Opportunity to tell their side of the story than they do at trial.

Some ADR processes allow the parties to fashion creative resolutions that are not available in a

trial (Such as Mediation). ADR processes also allow the parties to choose an expert in a

particular field to decide the dispute (Such as Arbitration).

3.5.4 Preserve Relationships

ADR can be a less adversarial and hostile way to resolve a dispute. In ADR an experienced

mediator can help the parties effectively Communicate their needs and point of view to the other

side. This can be a greater advantage where the parties have a relationship to preserve.



3.5.5 Increase Satisfaction

There is typically a winner and a loser in a trial. The loser is not likely to be happy, and even the

winner may not be completely satisfied with the outcome.

ADR can help the parties find win-win solutions and achieve their real goals. It also may

increase the parties' overall satisfaction with both the dispute resolution process and the outcome.

3.5.6 Improve Attorney-Client Relationships

Attorneys may also benefit from ADR by being seen as problem-solvers rather than combatants.

Quick, cost-effective, and satisfying resolutions will help to produce happier clients therefore

generate repeat business from clients and referrals of their friends and Associates.



3.6 Comparing Few ADR Methods

Disputant’s Goal ADR Procedure

Mediation/

Conciliation

Non-Binding

Arbitration

Binding Arbitration

Minimize Cost 3 2 0

Resolve Quickly 2 2 0

Maintain Privacy 2 2 0

Maintain

Relationship

3 2 0

Involve

Constituencies

3 1 0

Link Issues 3 1 0

Get Neutral Opinion 0 3 3

Set Precedent 0 0 3

Key Areas to Achieve Disputants' Goals

3 = Highly likely to satisfy goal

2 = Likely to satisfy goal

1 = Unlikely to satisfy goal

0 = Highly unlikely to satisfy goal



3.7 ADR Case Studies

3.7.1 Negotiation

Problem

An electronic firm faces significant difficulties in one of their sub-assemblies. The problem was

turn around certain types of fittings and pins that were becoming bent and distorted by the

operation of the machinery. Units which were being produced were damaged and had to be

rejected because of inadequacies. These rejected components were put aside and then re-worked

later on in the month. This re-working resulted in increased costs as workers had to work

overtime to meet their allocations.

These extra costs for the extra work performed had not been considered in the manufacturing

budget. The manager of this sub-assembly line did not want be charged with these overhead

expenses because he felt it was not their responsibility.

Similarly, the manager who was the overseer of the final assembly department also refused to

accept the increased costs to his budget. He argued that;

“The extra costs were a direct result of the poor work of the personnel in the sub-assembly

department as this was where the problem originated.”

The sub-assembly department manager argues against this argument by claiming that;

“The parts were in good condition before they left his department and that the damage

must have occurred in the final assembly manager’s department as an alternative.”

Both parties had reached to a dispute.



Workout for Solution

After sometimes both parties were worked out that was agreeable to them. What both parties

were really seeking was to find a long term solution to this problem. It will only happen when

they truly understood the nature of the problem and whether they were able to negotiate a

reasonable solution that was acceptable to both of them.

Solution

Two negotiators were appointed for the both parties to represent their respective cases and find a

solution for them on behalf of their party.

During the negotiation period it was found that the sub-assembly workers had some slack time

available during every working month. The damaged parts were returned in small batches form

the final assembly plant so that the sub-assembly personnel could work on them during these

slack periods. Also, when they examined the problem in more minute detail, the managers

learned that some of the personnel in the final assembly plant may not have been adequately

trained and may have also been partially responsible for the damaged incurred. Then with the

help of the negotiators these untrained personnel were identified and were sent to the sub-

assembly plant to further their training and to learn more about what transpired in that

department.

The resulting solution addressed the increased cost concerns of both departments on the one

hand. On the other hand, overtime was reduced by allocating the personnel where and when they

most needed and finally, because of the enhanced training, the number of damaged parts was

considerably reduced. The lesson to be drawn here is that the two managers were only able to

address the problem when they were able to understand the real issues that lay beneath the

problem as the cause for their cost overruns.



3.7.2 Conciliation

Problem

Thanh lived with her husband and 5 children in a rental home which was located near to her

children's school. She considered herself a good tenant as she kept the house clean and always

paid her rent on time. The landlord sent a termination to Thanh telling her she had 90 days to

vacate the premises. There was no reason given for the eviction and Thanh could not understand

why they were being asked to leave. By the time the termination notice date came, Thanh still

hadn't found a suitable home for rent in the local area, and an application had been lodged with

the Tribunal to end the tenancy.


On the day of the hearing, both parties were asked to attempt conciliation, with an interpreter

present to assist Thanh. A Tribunal Conciliator was available to assist and she ensured the

parties understood how to proceed with the conciliation process.

Thanh said she was sorry she had not moved out and that she had only recently found a new

home that was available in one month's time. The landlord explained that he needed the house

for his sister and her children who were coming from overseas to live in Australia. He had

promised his sister that she could live in the house when she arrived and she was due in 3 weeks’

time.

Solution

The Conciliator asked the parties to consider options and suggested some alternative solutions.

The landlord took some time out from the conciliation and called his family to arrange temporary

accommodation for his sister. Thanh agreed to vacate in 4 weeks. They returned to the hearing

room with their conciliated agreement, and a Tribunal Member made legally binding consent

orders.

This dispute arises because of a lack of communication. The Conciliation gave parties an

opportunity to discuss their issues and gain a better understanding of the other person's point of

view.



3.7.3 Mediation

Problem

Michelle and Angela are work colleagues in the support team of a large department in the

University. Angela has been on maternity leave and the department was reorganized while she

was away. Angela has now returned to work to find that Michelle has been given other duties

including producing management reports and statistics due to the reorganization. Michelle is

now asking Angela for information and advice on how to produce reports and stats (which was

previously within Angela’s remit) and appears to be ‘supervising’ her. Both Angela and Michelle

used to be very good friends.

Angela is clearly upset and distressed. She has not been informed of the changes and feels that

her relationship with Michelle has been badly damaged. She has lost trust in her friend and feels

that Michelle has gone behind her back while she was away.

Michelle assumes that Angela knows more about the changes to the reorganization than she

does. She thinks Angela has started being obstructive when she asks her for things and believes

that Angela is jealous of her new role, which is why she does not seem to acknowledge the

changes.

Their relationship is steadily failing and finally they have a huge argument over a double room

booking.

Workout for Problem

Angela noticed the message from the mediation service printed on her pays lip and decided to

ring the service coordinator to find out more. The coordinator assured Angela about

confidentiality and chatted about what mediation can do. Angela looked up further information

about the service and guidelines on what to expect in a mediation session from the mediation

website. Angela decided to give mediation a try and arranged an appointment. Then the

mediation coordinator sent a letter to Michelle advising her that she would be called in a couple

of days by the mediators and invited to voluntary participation in mediation.

Angela and Michelle had confidential one-to-one sessions with the mediators. During the

individual sessions the mediators saw that the following interests were common to both parties:

They both wanted to:

Rebuild their friendship with one another



Have a chance to rehearse what they needed to say to each other

Solution

They were offered joint mediation but after speaking with the mediators, they decided

independently that they wanted to speak directly to each other. The mediators assured them both

that they would be available for support if needed. Both Angela and Michelle realized from

talking to the mediators that there had been misunderstandings between them and that their

communication had broken down. They decided to meet up for lunch occasionally where they

would openly discuss feelings and any issues that concerned them.

Over the next few weeks they began to rebuild their trust in each other, with the aim of moving

their working relationship and friendship onto a normal footing. Angela also decided to go to her

line manager for clarification of their roles.



3.7.4 Arbitration

Problem

A French biotech company, holder of several process patents for the extraction and purification

of a compound with medical uses, entered into a license and development agreement with a large

pharmaceutical company. The pharmaceutical company had considerable expertise in the

medical application of the substance related to the patents held by the biotech company. The

parties included in their contract a clause stating that all disputes arising out of their agreement

would be resolved by a sole arbitrator.

Several years after the signing of the agreement, the biotech company terminated the contract,

claiming that the pharmaceutical company had purposely delayed the development of the biotech

compound. The biotech company filed a request for arbitration claiming substantial damages.


The Arbitration Centre proposed a number of candidates with considerable expertise of

biotech/pharma disputes, one of whom was chosen by the parties. Having received the parties’

written submissions, the arbitrator held a three-day hearing in Geneva (Switzerland) for the

examination of witnesses. This not only served for the presentation of evidence but also allowed

the parties to re-establish a dialogue. In the course of the hearing, the arbitrator began to think

that the biotech company was not entitled to terminate the contract and that it would be in the

interest of the parties to continue to cooperate towards the development of the biotech

compound.

Solution

On the last day of the hearing, the parties accepted the arbitrator’s suggestion that they should

hold a private meeting. As a result of that meeting, the parties agreed to settle their dispute and

continued to cooperate towards the development and commercialization of the biotech

compound.



4.0 Task 03

4.1 Tort

Tort is a civil wrong. It can be redressed by awarding damages.

4.1.1 Tort law

Torts are civil wrongs recognized by law as grounds for a court case. These wrongs result in an

injury or harm establishing the root for a claim by the injured party. Some torts are punishable

with imprisonment.

Provide relief for the damages incurred and discourage others from committing the same harms

is the primary aim of Tort Law. The injured person may sue for an injunction to prevent the

continuation of the tortious conduct or for monetary damages.

Among the types of damages the injured party may recover are;

Loss of earnings capacity

Pain and suffering

Reasonable medical expenses

They include both present and future expected losses.

There are several specific torts, including;

Trespass

Assault

Battery

Negligence

Products liability

Intentional infliction of emotional distress



Torts fall into three general categories

Intentional torts

Negligent torts

Strict liability torts

4.1.1.1 Intentional Torts

This is a type of tort that can only result from an intentional act of the defendant. Depending on

the exact tort alleged, either general or specific intent will need to be proven. Common

intentional torts are;

Battery

Assault

False imprisonment

Trespass to land

Trespass to chattels

Intentional infliction of emotional distress.

International Torts are those wrongs which the defendant knew or should have known would

occur through their actions or inactions.

4.1.1.2 Negligent Torts

Negligent torts are the most prevalent type of tort. Negligent torts are not thoughtful actions, but

instead present when an individual or entity fails to act as a reasonable person to someone whom

he or she owes a duty to. The negligent action found in this particular tort leads to a personal

injury or monetary damages.

The elements which constitute a negligent tort are the following:

A person must owe a duty or service to the victim in question

The individual who owes the duty must violate the promise or obligation

An injury then must arise because of that specific violation

The injury causes must have been reasonably foreseeable as a result of the person's

negligent actions.

Above mentioned elements may also say as;



Duty of Care

Breach of Duty

Damage or Injury

When it says briefly, Negligent Torts occur when the defendant's actions were unreasonably

unsafe.

4.1.1.3 Strict liability torts

Strict liability applies when a defendant places another person in danger, even in the absence of

negligence, simply because he is possession of a dangerous product, animal or weapon. The

plaintiff need not prove negligence.

Types of Strict Liability Torts

There are instances when a person becomes responsible for things that may go wrong even if the

person did not intend for the wrong to occur. In other words, some actions hold a person strictly

liable anyway of the circumstances.

In other words, strict liability tort means a defendant is held fully liable for any injury sustained

by another party regardless of whether the injury was intended. Dangerous animals are just one

of three major strict liability categories. Strict liability categories include:

Animals, owned or possessed

Abnormally dangerous acts

Product liability

Strict liability wrongs do not depend on the degree of carefulness by the defendant, but are

established when a particular action causes damage.



There are also separate areas of tort law including

Nuisance

Defamation

Invasion of privacy

A category of economic torts

Tort law is state law created through judges (common law) and by legislatures (statutory law).

Many judges and states utilize the Restatement of Torts as an influential guide.



4.1.2 Case Study

4.1.2.1 Parties

Claimant – Contractor

Defendant – The University (Client)

4.1.2.2 Case

The University needed construction of new sports facilities for it. A contractor had submitted a

tender for the work. The university agreed for tender and appoint the contractor to undertake the

works under letter of intent due to contract documents was delayed because of getting full

planning permission.

The contractor started the work on expire date of letter of intent. The contractor received contract

document after completing main elements of the work.

In contract it said that the payment will be carried by Quantum meruit basis. The contractor

declined to sign and left the site.

4.1.2.3 Negligence Happened in Above Scenario

There was no contract prior to the expiry of the letter of intent

The essential terms had never been agreed



4.1.2.4 How to Avoid Negligence in Construction Process

According above scenario it has explained the negligence which happened by both parties. When

in considering about FIDIC Red Book, it has explained some clauses regarding avoid above

negligence.

According to FIDIC Red Book Clause 1.1.1.1. says “Contract” means the Contract

Agreement, the Letter of Acceptance, the Letter of Tender, these Conditions, the

Specification, the Drawings, the Schedules, and the further documents (if any) which are

listed in the Contract Agreement or in the Letter of Acceptance.

It says the Conditions, the Specification, the Drawings, the Schedules and the further documents

should be listed in Contract Agreement or Letter of Acceptance. According to above scenario

there wasn’t any Contract Agreement or Letter of Acceptance but the Client issued a letter of

intent as Letter of Acceptance. Even though he provided it, there wasn’t listed the Conditions,

the Specification, the Drawings, the Schedules and the further documents, specially the

Conditions.

According to FIDIC Red Book Clause 1.6. says The Parties shall enter into a Contract

Agreement within 28 days after the Contractor receives the Letter of Acceptance, unless

they agree otherwise. The Contract Agreement shall be based upon the form annexed to

the Particular Conditions. The costs of stamp duties and similar charges (if any) imposed

by law in connection with entry into the Contract Agreement shall be borne by the

Employer.

It says after 28 days of Letter of Acceptance the Parties should enter to a Contract. According to

above scenario the both Parties failed to go for a Contract Agreement within 28 days.

When it is considering about above scenario the both Parties have negligence. There proper

wasn’t Conditions for the Works before commencing the Works. Both Parties failed discus about

Conditions before commencing the work in Letter of Acceptance even.

If both Parties had proper understand about Conditions before commencing the Works according

to FIDIC Red Book, there won’t be this kind of Negligence and no problem will araise.



4.2 Significance of Common Law within Construction Process

For constructing a building people ne comply with legal requirements. Before a person start a

construction he has to buy a land (by the process of conveyance). The next process is he may

enter into several contracts appoint someone else to build the building and buy all the necessary

materials. They may make sure that the planning permission satisfies with building regulations.

When it contractor is working he have to make sure about contract of employment with his

workers, business registration. He also must think about Construction Regulations, Defective

Premises, and Health and Safety at work to avoid being sued for breach of contract or

negligence. Also while building process the works should not be a nuisance for neighbours and it

should not impact to environment.

The contractor also should make satisfactory insurance arrangements to cover his liability for

many occurrences. This list is endless, because a construction process has to go on with so many

legal works.

4.2.1 Common Law

English Law is known as Common Law which is explained briefly in Task 01. English Law

divides into 2 divisions

English Law

Public Law

Criminal Law

Constitutional Law

Revenue Law

Administrative Law

Private Law

Contract

Tort

Property Law

Family Law

Succession



4.2.1.1 Public Law

This is dealing with the matters which are of importance to a country for the well-being of

society and which give public rights and duties to the individual.

Criminal Law

This encompasses not only the crimes such as; murder, rape, bigamy and theft. It is also consider

about matters which are by parliament to be as detrimental to the country as to necessitate

treatment by the criminal courts, such as;

Breaches of Construction Regulation

The Health and Safety at Work etc. Act

Road Traffic Offences

Constitutional Law

This is dealing with the relationships between the individuals as a citizen and the country itself.

It covers such matters as the roles of the president, the parliament, the government, the judiciary

and the citizens. It gives people certain public rights. Also failure to perform one’s duties may

result in prosecution and punishment.

Revenue Law

A country cannot run without financial resources therefore taxes are levied on people and

organisations. Failure to pay may result in court hearings. There are many different taxes;

Income Tax

Inheritance Tax

Stamp Duty

Value Added Tax

Corporation Tax



Administrative Law

As society has become more sophisticated and the country has played more of an interventionist

role therefore a large body of law has had to grow to deal with the way in which the government

interacts with government departments, such as;

Department of Social Security

Department of the Health Services

Department of Land Compensation

Department of Local Government and etc…

4.2.1.2 Private Law

This deals with law relating to relating to relationships between citizens. Whether a citizen has

rights or duties depends on which branch of private law he is concerned with. Private Law is also

known as Civil Law.

Contract

This deals with legally binding agreements between people, such as;

Contract for the sale of land

Contract of employment

Building contract

Each party can only expect from the other what has been agreed between the parties, or what is

implied into the agreement by Act of Parliament or the Common Law.

Tort

This is explained in above task briefly.

Law of Property

This is dealing with the ownership or title to land and personal property, and the transfer of such

property.



Family Law

This is dealing with all matters relating to the family, such as; adoption, legitimacy, divorce,

marriage and nullity. Such law is delivered, almost entirely, from statute law.

Succession

This concerns the transfer of property on death, whether the deceased died testate, having left a

will containing directions, or intestate, having left no will, when a statutory order of transferring

the property to the next of kin is applied.



5.0 Task 04

5.1 Main Parties to a Construction Contract

Construction Industry is world second largest industry. Construction industry is based on Time,

Quality and Cost of the project. To maintain Time, Quality and Cost of a project the contribution

of the parties who are involved to the work of the project should work successfully. There are

three parties involved in Construction Project, They are;

Client

Consultant

Contractor

5.1.1 The Employer (Client)

FIDIC Red Book clause 1.1.2.2 says that “Employer means the person named as employer in

the Appendix to Tender and the legal successors in title to this person.”

The employer is the person who wants to have a construction project to be carried out and sign

up a contractor to do the work. Employer is the person who chooses the specialists involved in

all stages from design stage through construction to long term management. The employer is also

known as the client or the developer as well. The Client is the root of the construction industry

and he is the person who is ready to invest his money on the projects.

5.1.2 The Contractor

FIDIC Red Book clause 1.1.2.3 says that “Contractor means the person(s) named as

contractor in the Letter of Tender accepted by the Employer and the legal successors in

title to this person(s).”

A person who is selected by the Employer using Tendering process to carry out and complete the

construction work is known as Contractor. The responsibility of building contractor is

completing the construction project according to the rules and regulations governing within the

country and he also responsible for maintain the Time, Quality and Cost. The contractor should

obtain the entire necessary license and permit for the required objects to start the building

project.



5.1.3 The Engineer (Consultant)

FIDIC Red Book clause 1.1.2.4 says that “Engineer means the person appointed by the

Employer to act as the Engineer for the purposes of the Contract and named in the

Appendix to Tender, or other person appointed from time to time by the Employer and

notified to the Contractor.”

The consultant is the person who is chosen by the Employer in order to manage the construction

work and administer the contract. He or She may works as the agent of the Employer. Most of

the clients don’t have the knowledge about the construction industry to fulfil the requirements

therefore they hire the construction consultant. The consultant is the worth for money bargaining

process, help to identify the potential construction problems in the design and construction stage.

As the consultant represents the client who is in the independent position of suggesting time

saving and cost saving options.



5.2 Roles and Responsibilities in Relation to the Construction Contract

5.2.1 Employer

5.2.1.1 Roles of Employer

In the construction industry the role of a client is very important because it is exciting and

creative but also can be shocking when the project is finished and it becomes apparent. For that

reason it is very important that the client should be;

Aware with the design process and should inspecting drawings as they get developed.

Aware whether his requirements are fulfilled

Aware whether the construction is sustainable

Aware is design comply with the health, safety and welfare of the public around and the

end users

Check whether how the asset will run and how much it will cost to run.

The client is responsible for the completion of project from the initial idea to the finishing.

According to Unique Glass Factory incident; the client (Unique Glass Factory) needed the

project to be completed within 10 months period of time therefore he has gone for the design and

build procurement method. The client hasn’t supplied additional information of the project as

this is not a normal construction project.

When constructing a glass plant house and the plant building for the glass factory there are some

special specification. But in this situation the client hasn’t played his role well. If he provided the

additional information to the contractor he doesn’t have to cause problems to the initial design of

the contractor.

There is also an Extra Work which client didn’t mentioned earlier in this project which is

constructing a the tank farm but the contractor has raised an objection telling that he is not

entitled to do that work.



Because of these reasons a dispute has raised between these two parties. In this case if the client

had played his role as the employer properly by giving his requirements and the specification

with all the additional information to the client this dispute won’t arise to both the parties.

5.2.1.2 Responsibilities of Employer

According to the FDIC Red Book clause 2.1, it is Employer’s duty to provide all access

to the site and possession of all parts of site within 14 days from the letter of acceptance

the time to the contractor.

According to the FDIC Red Book clause 2.1 and SBD-2 clause 2.1 and sub-clause 19.1,

if the Contractor suffers delay or cannot afford the Cost as a result of a failure by the

Employer to give any such right or possession within such time, the Contractor should

give a notice not delay within 28 days to the Engineer to;

o Ask any extension of time for any such delay, if completion is or will be delayed

o Ask for include payment of any such Cost plus reasonable profit in the Contract

Price.

And the client entitled to pay for it.

In here in the given construction, the dispute has arisen due to the negligence of the employer

mainly, because when variations are added to the construction work, the employer is entitled to

pay for them according to the above mentioned clauses in the FIDIC and SBD.

According to the FDIC Red Book clause 2.2 and SBD-2 clause 2.2, it is the responsibility

of the employer to provide reasonable assistance to the contractor with the request of

contractor for the works like

o Getting permits, approvals and license regarding the work in the contract for the

delivery of goods for the works in the contract including clearance through

customs.

o Getting copies of the laws of the country regarding the work in the contract




of the employer to ensure the health and safety of persons on the site in co-operation with

the contractor.


of the employer or the client, to make the financial arrangements within 28 days after

receiving the payment request from the contractor with reasonable evidence that financial

arrangements have been made and are being maintained which will enable the Employer

to pay the Contract Price.

According to FIDIC Red Book Clause 2.5 and SBD-2 Clause 2.4, if the employer or the

client is entitled for a payment under the condition of the contract regarding an extension

of the notification period, it is the responsibility of the employer to give a notice to

regarding those claims to the contractor.



5.2.2 Consultant

5.2.2.1 Roles of Consultant

The consultant is an experienced person who is appointed by the employer. He is responsible for;

Administering

Supervising the execution of the work

This person may be an engineer or an architect or any other professional person who is

experienced in construction industry well. In the FIDIC and the SBD document the person

appointed by the employer, who is referred as the “engineer”.

Most of the clients don’t have any knowledge regarding the construction industry to fulfil the

requirements therefore they hire the construction consultant.

The construction consultant’s role is to represent the client and achieve the client’s requirement

which the client expect from the contractors. The consultant is the worth for money bargaining

process, help to identify the potential construction problems in the design and construction stage.

As the consultant represents the client who is in the independent position of suggesting time

saving and cost saving options.

As above mentioned reasons may help the client overcome many issues regarding construction

industry. According to the FIDIC the consultant or the engineer who is appointed by the client

does not have the authority to make amendments to the contract.

5.2.2.2 Responsibilities of Consultant

According to the FIDIC Red Book Clause 3.1, the engineer/consultant does not have the

authority to make amendments. If any change needs to be done, it is the responsibility of

the consultant/engineer has to take the approval from the employer.

According to the FIDIC Red Book Clause 3.2, the consultant/engineer has the authority

to appoint assistants who have the necessary experiences in order to check the quality of

the works, plant and materials, etc.

It is the responsibility of the consultant/engineer to provide the contractor necessary and

additional details to the contractor at any time for the execution of the construction works

and for remedying the defects.



As the consultant represents the client, it is the responsibility of the consultant/engineer

of suggesting the client/employer, time saving and cost saving alternatives.

It is the responsibility of the consultant to administer the contract work, inspecting the

materials, plant, and to check whether the laborers who are working have the necessary

competencies to perform the task that they are assigned to.

It is the responsibility of the client to be in alert, whether the construction works that is

going on is satisfying the requirements of the client/employer.



5.2.3 Contractor

5.2.3.1 Roles of Contractor

The building contractor who is a person or a firm consists of a team of all the required

professionals together. It is an organization that engages in planning, developing and

coordinating the project activities. The building contractor plans the way to carry out the

construction project from start to finish. The building contractor is responsible for hiring,

supervising, payments for workers and also obtaining materials needed for the project according

to the specifications, using the service of suppliers. The responsibility of building contractor is

completing the construction project according to the rules and regulations governing within the

country and he also responsible for maintain the Time, Quality and Cost. The contractor should

obtain the entire necessary license and permit for the required objects to start the building

project.

5.2.3.1 Responsibilities of Contractor

According to FDIC Red Book clause 4.1, it is the responsibility of the contractor design

(if specified in the contract), execute and complete the work successfully according to the

contract, with the instruction of the consultant/engineer, and treating the defects.

According to FDIC Red Book clause 4.1, the Contractor is responsible for the adequacy,

stability and safety of all Site operations and of all techniques of construction.

According to FDIC Red Book clause 4.1, the Contractor is responsible to submit the

details of the works and arrangements methods which contractor proposes to use for the

execution of the works, when required by the consultant/engineer. No significant

alteration to these arrangements and methods shall be made without this having

previously been notified to the engineer/consultant.

According to FDIC Red Book clause 4.1 sub-clause (d), it is the responsibility of the

contactor to submit to the Engineer/consultant the “as-built” documents and operation

and maintenance manuals in accordance with the Specification and in sufficient detail for

the Employer to operate, maintain, dismantle, reassemble, adjust and repair this part of

the Works.



According to FDIC Red Book clause 4.2, it is the responsibility of the contractor to

obtain a security performance for proper performance, in the amount and currencies

stated in the Appendix to Tender.

According to FDIC Red Book clause 4.2, the Contractor is responsible to deliver the

Performance Security to the Employer within 28 days after receiving the Letter of

Acceptance, and should send a copy to the Engineer/consultant.

According to FDIC Red Book clause 4.2, the Contractor is responsible to ensure that the

Performance Security is valid and enforceable until the Contractor has executed and

completed the Works and remedied any defects.

According to FDIC Red Book clause 4.4, the Contractor is responsible for the acts or

defaults of any Subcontractor, his agents or employees, as if they were the acts or

defaults of the Contractor.

According to FDIC Red Book clause 4.6, it is the responsibility of the contractor to co-

operate with the employer, persons appointed by the employer, engineer/consultant and

personnel of any legally constituted public authorities, who may be employed in the

execution on or near the Site of any work not included in the Contract.

According to FDIC Red Book clause 4.7, the Contractor is responsible to set out the

Works in relation to original points, lines and levels of reference specified in the Contract

or notified by the Engineer/consultant. The Contractor is responsible for the correct

positioning of all parts of the Works, and shall rectify any error in the positions, levels,

dimensions or alignment of the Works.

According to FDIC Red Book clause 4.7, sometimes the employer might have done some

mistakes in some specified field of the contract in such situations employer is

responsible, however it is also a responsibility of the contractor to put their effort to

verify the accuracy before they are used.

According to FDIC Red Book clause 4.8, the contractor is responsible to comply with all

the required health and safety procedures and regulations. It is the responsibility to take

care for the safety of all persons entitled to be on the Site and to use reasonable efforts to

keep the Site and Works clear of unnecessary obstruction so as to avoid danger to these

persons, providing fencing, lighting, guarding and watching of the Works until

completion.



According to FDIC Red Book clause 4.9, it is the responsibility of the contractor to

assure the quality of the work of the contract according to the expected standards in the

contract. Details of all procedures and compliance documents should be submitted to the

Engineer/consultant for information before each design and execution stage is

commenced.

According to FDIC Red Book clause 4.11, the contractor is responsible to place the bid

price on the data necessary information, inspections and satisfying himself to the

correctness and the sufficiency.

According to FDIC Red Book clause 4.12, if and to the extent that the Contractor

encounters physical conditions which are Unforeseeable, it is the responsibility of the

contractor to give such a notice to the consultant/engineer, that the project will suffers

delay and/or incurs cost due to these conditions.

According to FDIC Red Book clause 4.15, the Contractor is responsible to bear all costs

and charges for special and/or temporary rights of-way which he may require, including

those for access to the Site. The Contractor shall also obtain, at his risk and cost, any

additional facilities outside the Site which he may require for the purposes of the Works.

According to FDIC Red Book clause 4.16, the Contractor is responsible for packing,

loading, transporting, receiving, unloading, storing and protecting all Goods and other

things required for the works.

According to FDIC Red Book clause 4.17, the Contractor is responsible for all

contractors’ equipment when brought on to the site; contractor’s equipment shall be

deemed to be exclusively intended for the execution of the works. (FIDIC 4.17)

According to FDIC Red Book clause 4.18, it is the responsibility of the contractor to take

the necessary steps to protect the environment.

According to FDIC Red Book clause 4.19, the Contractor is responsible for the provision

of all power, water and other services that he may require.

According to FDIC Red Book clause 4.20, if the employer gives some employer’s

equipment available for the use of the contractor, the contractor is responsible for that

equipment.



According to FDIC Red Book clause 4.21, the contractor is responsible to provide the

monthly reports for the engineer/consultant and to the employer regarding the progress of

the construction works and other relevant documents.

According to FDIC Red Book clause 4.22, contractor is responsible for keeping

unauthorized persons off the site and the authorized persons shall be limited to the

contractor’s personnel and the employer’s personnel and to any other personnel notified

to the contractor, by the employer or the engineer/consultant, as authorized personnel of

the employer’s other contractors on the Site.



5.3 The principles of law applied to the main parties in the above project and Advice for

the Client

According to given Unique Glass Factory project disputes have arisen due to the failure of the

employer to provide necessary specifications and the additional information to the Contractor. In

additionally that the employer has requested to build a tank farm too. Due to this reason the

contractor has disagreed to it telling that he is not entitled to build a farm tank. In this situation

the contractor is entitled for request extension of time and an additional payment for that extra

work added to the contract.

According to the Claims, Disputes and Arbitration clauses in SBD-2 19.1 and FDIC Red Book

20.1, if the contractor consider that he is entitled to get an extension of time or an additional

payment the contractor have to give a notice to the engineer/consultant describing the event or

circumstance giving rise to the claim.

The notice should be given as soon as possible, and it should be not later than 28 days after the

Contractor became aware, or should have become aware, of the event or circumstance.

According to the scenario the scenario the building a farm tank is extra work which is not

mentioned earlier by client. Therefore according to the clauses in SBD-2 19.1 and FDIC Red

Book 20.1the contractor is entitled to get an extension of time and an additional payment.

There was not any Consultant/Engineer to give notice to claim due to this is a design and build

procurement.

Therefore the contractor has to give his notice to client within 28 days of the event. When client

get that notice he must claim contractor with the extension of time and an additional payment.

If contractor failed to provide any notice to client within given time, the client is free to claim the

contractor with an extension of time and an additional payment.

When it considering more on clauses it also says, The Contractor should keep current records as

may be necessary to prove any claim, either on the Site or at another location acceptable to the

Engineer.



After receiving any notice the Engineer may monitor the record-keeping and/or instruct the

Contractor to keep further current records without admitting the Employer’s liability. The

Contractor should permit the Engineer to inspect all these records, and should submit copies to

the Engineer.

It also mentioned, Within 42 days (in SBD-2 84 days) after the Contractor became aware of the

event or circumstance giving rise to the claim, or within such other period as may be proposed by

the Contractor and approved by the Engineer, the Contractor shall send to the Engineer a fully

detailed claim which includes full supporting details of the basis of the claim and of the

extension of time and additional payment claimed.

According to Above Scenario the Client has to know several principal laws in a construction

project. Mainly the dispute arises due to negligence of client. The client has to provide

specifications regarding total project and have to inspect regular work progress. He also has to

avoid extra works and variations to avoid high cost claim and extending project completion time.

There are some important points the client has to know, such as;

Select the best contractor for the project through a tender process, from that it is helpful

to get the best rates for a particular task.

Mention each and every details of the project in the contract documents as much as

possible. (Terms, Conditions and Specifications)

When selecting the contractor, select the best contractor who has the capacity to do the

work with reasonable rates, not the contractor having the lowest rates.

Then talk with the selected contractor and give him the idea of what you really expect in

the project and the scope of work.

Provide all the necessary details such as the budget, specifications, building services

needed, usability and the functionality of the building, etc.

Always provide the additional details that are essential for the project to the contractor

whenever needed.

Avoid variations and Extra Works and try to the work in the initial contract as much as

possible.

Inspect regularly the project form execution to completion to get the required output.



5.4 Contractual Obligations of a Contractor and Client in Construction Work

A contract is a Bond which is enforceable by law to perform some specified act. Generally all

civil obligations are coming under the tor law or the contract law. For the contract to be valid the

parties who are in the contract, have to agree the terms and conditions on it. When the parties are

in a contract, there are several obligations which are imposed on them. When it comes to the

construction industry, the parties who are mainly in the contract generally are the client and the

contractor. Therefore their obligations when they are in a contract are given below.

5.4.1 Contractor’s Obligations

According to the FIDIC Red Book clause 4.1 and SBD-2 clause 4.1,

The contractor is obliged to design according to the extent specified by the contract,

execute and complete the works according to the contract according to the instructions

and specification given by the engineer/consultant or the employer.

If there are any defects in the works in the contract he is entitled to remedy them.

The contractor is obliged to provide the plants, labor, goods, consumables and other

services, in permanent basis or temporary basis which are required for the execution,

completion and remedying the defects of the works in the contract.

The contractor is obliged for the health and safety of persons at work and the people

around the construction site. He is responsible for the adequacy, stability and safety of all

site operations of all methods of construction.

The contractor is obliged to submit the details of the arrangements and methods that the

contractor proposes to use for the execution of the works.

The contractor should not do any alterations to do the construction work procedures and

methods used without getting the approval from the engineer/consultant.

If the construction work is going to the design and build procurement type, the contractor

have to design the construction in such a way to satisfy the client/employer, in such

situations the contractor is obliged to submit the consultant/engineer (if the consultant is

not there, submit to the employer) how they are going to perform the assigned tasks in the

contract, whether they suit to the requirements of the client and the contractor should



submit the as built drawings along with operation and maintenance manuals to the

consultant/engineer (if the consultant is not there, submit to the employer) before the

commencement of the works to get the approval.

5.4.2 Client’s (Employer’s) Obligations

The client is obliged to provide his requirements, specifications of the works and all the

additional details when necessary to the contractor in order to complete the project

successfully according to his requirements.

It is client’s obligation to answer back to notices sent by the contractor regarding any

postponement/delay or interruption as a result of some drawing or because of an

instruction from the client and also to decide any provision of cost, extension of time for

any kind of delay by providing essential drawing or training/instruction.

When the contractor gives notice of willingness of the whole work or part of the work to

inspect and to measure, it is client’s obligation to examine and quantify those works and

also if there is any inspection, client cannot delay that kind of inspection without any

valid reason.

The client is obliged for the health and safety of persons at work and the people around

the construction site. He is responsible for the adequacy, stability and safety of all site

operations of all methods of construction.

The client is obliged to make the interim payments to the contractor on time.

If the contractor requires any extension of time or any claim of money for any variation

of the work, if the claim has arisen with reasonable reasons, the clients is obliged give the

extension of time and make the payments without delaying.



6.0 Task 05

6.1 Company Law

In Sri Lankan English Law is governing the Company Law. Most of the largest businesses in Sri

Lanka are conducted by limited liability companies. Company law is established to handle the

companies’ cases. Mainly Company law related to

The formation and finance

Company officers and Liabilities

Company meetings

Shareholders

Protection and Liquidation of companies and etc...

For an example; when new company is going to registration according to Company Law, the

court will check the;

Company proposed name

Situation of the company

Whatever the liability of the company

It should be a limited by shares or guarantee, whatever the company is public company or private

company etc… If not there will be some issues.

The Sri Lankan Company Law was updated from May 2007 by the New companies Act 7 of

2007.

There are several types of companies can be established under provision of 7 of 2007 Act, They

are;

Limited Company

Unlimited Company

Company Limited by Guarantee



Company law is the field of law concerning companies and other business organizations. This

includes corporations, partnerships and other associations which usually carry on some form of

economic or charitable activity.

There are some basic principles in company law.

Companies in many shapes and sizes; There are fundamental differences, what they cannot do,

and specially designed for everyone. But all are separate legal entities, irrespective of directors

and shareholders. Rarely has a company, check behind the law and treat them as the same

person.

A company is responsible for its own debts and liabilities. The shareholders and, as a

general rule, directors cannot be forced to pay them. But it is important to remember they

are principles of company law. In the field of tax in particular, many inroads have been

made by both statute and the courts that allow the authorities to look behind company

structures at who really owns and controls the entity.

Most companies are ‘limited by shares’, and they may be ‘private’ or ‘public’ companies.

Public companies may have their shares ‘listed’ or traded on a stock exchange – although

they are under no obligation to do so.



6.2 Employment Law

Employment law is a broad area surrounding all areas of the employer/employee relationship

except the negotiation process covered by labour law and collective bargaining. Employment law

consists of thousands of statutes, administrative regulations, and judicial decisions. Many

employment laws (e.g., minimum wage regulations) were enacted as protective labour

legislation. Other employment laws take the form of public insurance, such as unemployment

compensation.

Specific areas within the broad category of employment law covered under their own topical

entries include:

Collective bargaining

Employment discrimination

Employee Retirement Income Security Act (ERISA)

Unemployment compensation

Pensions

Workplace safety

Worker's compensation



The methods to avoid employment law issues.

As that has been further described in the above task 5 part b, the employment law governs the

rights and the duties between the employers and workers. This law is basically there to make

sure that the workers are treated fairly.

The employees and the employers should be aware of their employment rights and

responsibilities.

If there are any agreements in between the employer and the employee, it should be recorded in

writing. It helps to prevent misunderstandings and resolve disputes (if any arises later).

The employees have the responsibility to prevent and clear up confusion

Both the employer and the employee should communicate clearly, poor communication can

causes disputes and misunderstandings.

Raising concerns when they first arise can help stop them becoming bigger and harder to resolve,

an effective performance management system is a good way of ensuring this.

Before any significant change, the people affected should be consulted. Getting everyone’s ideas

will often leads to the better decisions.

Employers should ensure that they have processes to address and investigate complaints which

the employee might bring to their attention.



6.2.1 Employment Law Case Study

Ready Mixed Concrete v Ministers of Pensions and National Insurance (1968)

Facts: Ready Mixed Concrete hired drivers who used their own Lorries to deliver the company’s

concrete and mixers to customers. Drivers had to wear company uniforms and had to comply

with reasonable orders from the company. Drivers had to maintain the vehicle at their own cost

and could decide which route to take. So they could also pay for a substitute driver if absolutely

necessary.

Decision: Drivers were each running a small business of their own and as such were self-

employed not employees. This case set out principles that

An employee cannot substitute another worker for himself.

Control is important factor but it isn’t the only factor.

Contract as a whole had to be looked at to see if it was consistent with a contract of

service, so the factors such as who owned assets, financial risk and opportunity to profit

aren’t consistent with a contract of service.



6.3 Health Safety and Welfare Law

According to HSE (Health and Safety Executive) all workers have a right to work in places

where risks are properly controlled to their health and safety. Health and safety is about stopping

people getting hurt at work or ill through work. Employer is responsible for health and safety,

but employees must help.

There are some acts and legislations which are using in construction industry according to UK

government, they are;

Health and Safety at Work etc. Act 1974

The Management of Health and Safety at Work Regulations 1999

The Construction (Design and Management) Regulation 2007

Health and Safety at Work etc. Act 1974

According to this act, Chapter 37, Part (I) is mainly focusing on “Health, Safety and Welfare In

Connection With Work and Control of Dangerous Substances and Certain Emission into the

Atmosphere”.

The Section 2 to 9 is referring about general duties. In section 2 it is providing the general duties

of employers to employees

The Management of Health and Safety at Work Regulations 1999

This is a regulation mainly focusing on Health and Safety of works. There are five main sections

which are important to construction industry, they are;

Section 3. Risk Assessment

Section 14. Employees’ duties

Section 15. Temporary workers

Section 16. Risk assessment in respect of new or expectant mothers

Section 19. Protection of young persons



The Construction (Design and Management) Regulation 2007

This Regulation Mainly focusing on responsibilities of different parties in construction industry.

When is it considering about this regulation Part 1 is about introduction. Part 2, 3 and 4 is about

duties of several parties. However according to this report there are 5 sections most important in

construction industry health and safety, they are;

Section 2. Interpretation

Section 4. Competence

Section 5. Co-operation

Section 6. Co-ordination

Section 7. General principles of prevention



The methods to avoid health and safety law issues.

The work place health and safety laws are there as an effort to keep the employees safe from

harm. The health and safety standards are there to reduce the risks of accidents and illnesses. The

government agents have the authority to investigate regarding the violations of non-compliance

of the health and safety regulations. The Health and Safety in Employment law designed to

prevent people at work from being harmed. It applies to everyone in almost all places of work;

inside, outside, public or private even underwater or underground. Employees, employers,

contractors, owners of building or plant and visitors to workplaces all have responsibilities and

obligations under the health and safety law.

The health and safety law applies to you no matter if you are a permanent, temporary, casual,

full-time, or part-time employee, or even if you are just receiving on the job training or gaining

work experience. It also applies to you regardless of the amount of experience or responsibility

you have.

The health and safety law puts the responsibility first and foremost on employers to take all

practicable steps to identify and manage workplace hazards. However, as an employee or trainee

in a workplace you also have responsibilities towards promoting a safe and healthy working

environment.

The basis of the UK health and safety law is the health and safety at work act 1974 and some

regulations. This sets out the general duties and principles for the protection of health and safety

of employees Approved codes of practices are published from time to time containing guidance,

examples of good practices and explanations of the law.

Approved codes of practices offer practical advice and contain examples of good health and

safety practices. It gives advices on how to comply with the law. Approved codes of practices do

not have the same legal force like in regulations. But they set out requirements in more detail

than the regulations.

When considering the construction industry, it is an industry where the probability for the

accidents is very high. For example such as, working at height, falling, heavy objects falling on

to head, etc. and also there are health safety issues for the persons around the site as well.



Therefore in order to avoid those health and safety law issues, it is advisable to identify the risks

and the hazards and take the preventive measures for those. To avoid the issues regarding health

and safety,

Prepare method statements for each and every work in the construction that will help to

avoid mistakes of the works and to follow safety procedures.

Maintain a risk register and a probability and impact matrix to manage the risks and

avoid the safety issues as much as possible.

Prepare risk assessments before commencing a hazardous work that will help to take

necessary actions to minimize the risk and take necessary steps to avoid the risk as much

as possible.

Provide proper health and safety training for the persons at work.

Provide the employees necessary personal protective equipments and allocate only

competent persons for the tasks that have risks if it is not done properly.

Make arrangements to protect the people around the site and also the vehicles moving

near by the site.

Give the employees necessary knowledge about the health and safety at work and also the

way to work while protecting their health and safety and also the others.

Given above are the methods that we can use to avoid the health and safety law issues.



6.3.1 Health Safety and Welfare Law Case Studies

General Cleaning Contractor’s v Christmas (1952)

Facts: Window cleaner fell and seriously injured himself while cleaning an Office Building

Window. He had relied on holding a sash window frame and balancing his foot on a windowsill.

Window fell and gave way.

Decision: employer was liable because it was the employer’s duty to give general safety

instructions and have a safe system of work. Just because he was an experienced window cleaner

didn’t mean they could just leave him to it. Instead of the providing proper system that he should

follow.



6.4 The Sale, purchase and rental of goods Law

In contracts for the sale of goods and supply of services certain basic provisions are implied by

statute in order to provide protection to purchasers. The main provisions derive from the Sale of

Goods Act 1979 and the Supply of Goods and Services Act 1982. The Sale of Goods Act

protects purchasers where the seller does not have the right to sell the goods (s.12). Where the

goods are sold by description there is an implied term that the goods will correspond to that

description (s.13). Businesses must ensure that the goods they sell are of satisfactory quality and

fit for their purpose (s.14). Where the goods are sold by sample there is an implied term that the

goods will correspond to the sample in quality (s.15). Where the goods are supplied along with a

service then the Supply of Goods and Services Act 1982 applies. This implies the identical

provisions as the Sale of Goods Act in relation to the goods supplied. In addition there are

implied terms that the service must be carried out with reasonable care and skill (s.13), that the

service will be carried out within a reasonable time (s.14) and where no price is agreed a

reasonable price will be paid (s.15).

Sale of Goods Act 1979 Summary

The Sale of Goods Act 1979 provides four main protections for buyers:

The seller must have the right to sell the goods ( S.12)

Goods sold by description must correspond to the description (S.13)

Goods must be of satisfactory quality (s.14)

Goods sold by sample, the goods must correspond to the sample in quality (s.15)

The Sale of Goods Act applies to all contracts for the sale of goods, however, s.14 is more

limited in its scope in that it only applies where goods are sold in the course of a business. Also

where the goods are sold in the course of a business the provisions of the Sale of Goods Act are

reinforced with the protection offered by the Unfair Contract Terms Act 1977 which prohibits

their exclusion. See further here.

These protections are in the form of statutory implied terms. This means that the Sale of Goods

Act will put these terms into all contracts for the sale of goods no matter what the parties



themselves have agreed in the terms and conditions of sale. A contract is for the sale of goods

provided it is a contract to transfer ownership of goods (as opposed to a hire agreement) and the

goods are exchanged for money. This excludes contracts of barter unless money is also given.

6.4.1 The Sale, purchase and rental of goods Law Case Studies

Underwood Ltd v Burgh Castle Brick and Cement Syndicate (1922)

Facts: The claimant contracted to sell an engine to the defendant to be delivered free to rail

(loaded on a train). Engine had become embedded in the claimant’s concrete floor. Engine had to

be dismantled and loaded on to the train for delivery. It was damage while being loaded.

Decision: Property (ownership) had not passed to the buyer at the time the contract was made

because the engine wasn’t in a deliverable state.(free on rail)

6.4.2 Hariligdon & Leinster Enterprises Ltd v Christopher Hull Fine Art Ltd (1991)

Facts: the seller offered a painting which he claimed to be by the German expressionist Munter,

but he made it clear that he wasn’t an expert on German Painting and informed the buyer that he

should examine painting for himself. Buyer inspected the painting and bought it. Painting turned

out be forgery.

Decision: The buyer could not recover the purchase price from seller; because of he had not

relied on the description in making a purchase. It was therefore not a sale by description.



6.5 Land law

Land law is made more complicated because often several interests exist in respect of the same

piece of land at the same time. Thus, there might be both a lease and a mortgage over the same

piece of land. Or there might be two mortgages in respect of the same piece of land at the same

time. Land law has to explain how these relationships co-exist and what is to happen when the

relationships come into conflict. It has to discuss the relative priorities enjoyed by two or more

interests concerning the same piece of land. Land law aims to ensure that there is certainty as to

who has some kind of proprietary interest in a given piece of land. It does this by limiting the

range of interests over land that it is prepared to recognize to those on the menu of interests.

Follow are some Land related acts in Sri Lanka,

6.5.1 Land Development Ordinance – No. 19 of 1935

An Ordinance to provide for the systematic development and alienation of state land in Sri

Lanka.

6.5.2 State Land Ordinance – No. 08 of 1947

An Ordinance to make provision for the grant and disposition of state Lands in Sri Lanka; for the

management and control of such lands and foreshore; for regulation of the use of the water of

lakes and public streams; and for other matters incidental to or connected with the matters

aforesaid.

6.5.3 State Land (Recovery of possession) Act – No. 07 of 1979

An Act to make provision for the recovery of possession of state lands from persons in

unauthorized possession or occupation thereof and for matters connected therewith or incidental

thereto.

6.5.4 Land Acquisition Act – No. 09 of 1950

An Act to make provision for the acquisition of lands and servitudes for public purposes and to

provide for matters connected with or incidental to such provision.

6.5.6 Title Registration Act – No. 21 of 1998

An Act to make provision for the investigation and registration of title to a land parcel; for the

regulation of transactions relating to a land parcel so registered; and for matters connected

therewith or incidental thereto.



6.5.7 Land law Case Studies

Legue Against Cruel Sport v Scott (1986)

Facts: Claimants owned land on Exmoor which they maintain as a deer sanctuary. Hounds from

the local hunt repeatedly got on to the claimant’s land and disturbed the deer.

Decision: Master of Hounds was liable for trespass if he deliberately encouraged the dogs to

enter the land and or if he negligently failed to prevent them entering the land.



6.6 Property law

Property Law in legal view point, property mean immediate economic or monetary value , such

as land, buildings, motor vehicles, life insurance policy or shares in a company. As legal term

Property also means the object that is owned. In more accurately, it is legal interest or right in the

thing that is owned. For an instance Liquor License is “Property with a Money Value”.

Property law, principles, policies, and rules by which disputes over property are to be resolved

and by which property transactions may be structured. What distinguishes property law from

other kinds of law is that property law deals with the relationships between and among members

of a society with respect to “things.” The things may be tangible, such as land or a factory or a

diamond ring, or they may be intangible, such as stocks and bonds or a bank account. Property

law, then, deals with the allocation, use, and transfer of wealth and the objects of wealth. As

such, it reflects the economy of the society in which it is found.

Intellectual property relates to items of information or knowledge, which can be incorporated in

tangible objects at the same time in an unlimited number of copies at different locations

anywhere in the world. The property is not in those copies but in the information or knowledge

reflected in them. Intellectual property rights are also characterized by certain limitations, such

as limited duration in the case of copyright and patents. The importance of protecting intellectual

property was first recognized in the Paris Convention for the Protection of Industrial Property in

1883 and the Berne Convention for the Protection of Literary and Artistic Works in 1886. Both

treaties are administered by the World Intellectual Property Organization (WIPO).

The second is to promote creativity, and the dissemination and application of its results, and to

encourage fair trade, which would contribute to economic and social development. In Sri Lanka

there are some Acts about the property law.

Property law acts in Sri Lanka.

Any property transferred to a licensed bank at an auction conducted by such bank in the

discharge of a mortgage of such property.

Any property transferred to a Registered Finance Leasing Institution upon a purchase

made by such institution where the property has been mortgage to such institution as a

security for lease, or in order to execute a lease and an agreement to sell or a loan and an

agreement to sell.



Any property transferred to a licensed bank or a Registered Finance Leasing Institution

pursuant to an order of court in an action for recovery of a debt.

Any property transferred to a licensed bank or a Registered Finance Leasing Institution to

carry on their business of banking or finance leasing in such property.

Any land transferred to an enterprise authorized by the Board of Investment of Sri Lanka

(BOI) to setup on such land.

Any Condominium unit situated on or above the fourth floor of any approved

condominium, if the value of such unit is met by inward remittance of foreign currency.

Any property acquired prior to October 5, 2004 by a company and transferred to another

company on the dissolution of such transferor company consequent to a merger of the

transferee company with the transferor company.



6.6.1 Property Law Case Studies

Dayarathne v Y.M.W. Bandara Bar

The court of appeal held that a liquor license issues under excise ordinance is not a mere

privilege but constitute property having a money value and falls within the concept of rights in

the board sense. Accordingly, when a person’s right to property having a money is affected by

decisions of government ministry of official, such aggrieved person has a right to be heard

(example by a Writ of Certiorari) so that he can explain why such a liquor license should not be

denied to him. (Weerasooriya, July 2012)



6.7 The Effect of the European Legal Systems on Related Construction Activities

European legal system can defined as the unique combination of subjects, sources of law and

relationship between international and national law. Also can be defined as a system of legal

norms that regulates the area transferred into the jurisdiction of Europe. The law and politics of

European integration have been inseparable since the 1960s, when European Court of Justice

rendered a set of foundational decisions that gradually served to 'constitutionalize' the Treaty of

Rome. The legal system of the European Union (EU) offers domestic actors a powerful tool to

incense national policy. European law can be drawn on by private litigants in national courts to

challenge national policies. These challenges can be sent by national judges to the European

Court of Justice (ECJ), which instructs national courts to apply European law instead of national

law, or to interpret national law in a way compatible with European law. Combining of victories

in front of the ECJ with political mobilization and pressure, litigants and groups have used the

European legal system to force their governments to change national policies European legal

systems are usually divided into three groups: civil law systems, common law systems and

juridical systems .The overwhelming majority of the 50 countries in Europe are classed as civil

law jurisdictions. Only the Cyprus, Malta, Ireland, and the UK utilize common law systems.

The tradition of common law originated in England in the middle ages and was used in the

British colonies on the continent. The civil law tradition developed in continental Europe at the

same time and was used in the colonies of European imperialist powers such as Spain and

Portugal. Civil law was also passed in the nineteenth and twentieth centuries by the countries of

the former having separate legal traditions, such as Russia and Japan, seeking to acquire their

legal systems comparable to economic and political power of the nation of Western Europe

reform. For an American familiar with the terminology and the process of legal system is based

on English common law systems, unknown and confusing civil law.

Although England had many deep cultural links with the rest of Europe in the Middle Ages, the

legal tradition developed differently from the mainland for a number of historical reasons, and

one of the most fundamental ways in which they had disappeared in the implementation of

judicial decisions the ordinary rate and the legislative basis of civil law decisions.



6.7.1 The European law of contract

Civil law is very different. It defines the rights and obligations that exist claims between the

parties, particularly circumstances. The parties in a civil plaintiff and defence and former, a

remedy for the acts or omissions of the known above. The difference is that, in contrast to the

criminal law (in that connection, Set) Civil law means - law tries as much as possible to go back

to correct things.

Measures alone are legion: the court may award damages as a way to compensate for the loss of

the applicant, or it cannot explain the rights of the parties or, in certain circumstances, a party of

order or. Two of the largest areas of civil law or contract and tort.

6.7.2 Design team combination with European law

It is an essential element of the concept of law, the application must be universal:

Everyone should be governed by law. Therefore, legislation in one application, Design Team

need to knows the law. Therefore, the banal maxim that ignorance of the law is no excuse, no

practice for those who engage in any occupation except skills, especially in the profession

accordingly; Design Team will also deal with a lot of law, the work of their action was

concerned providing a service to another, the support of the experiment. Knowing the

responsibility of society in general and in particular the right, this is true for clients, architects

and other professions. Thus, in the case of the architect, the courts, especially those of the Treaty

including the models of production control and different legal regimes, such as building codes,

zoning and health Security, EU legislation on public procurement, etc.

Contracts are very important to any kind of industry because contracts are the legal documents

which bind main parties for any kind of work. For an example in a commercial company

directors and shareholders binding through company’s contract and that contract includes roles

and responsibilities of each party in the company as well as important factors such as interest

rates, validity time of contract etc. this assignment based on law applications in relation to

construction industry. Construction industry also consist construction contracts to carryout

construction projects. Usually, there is a person who requires construction project to his own

purpose it can be house, building, factory etc..



Major construction projects have a lot in common, wherever in Europe, as do many facets of

construction law. Some legislation affecting the industry applies across the European Union,

with that relating to public procurement being just one example. Despite this, major differences

can often arise between the approaches adopted by individual legal systems. This can lead to

legal results which are surprising to construction professionals from another jurisdiction.

The following are a few examples

Courts in the United Kingdom rarely enforce agreements to agree. As a result, problems

can often arise when a contractor starts work in reliance on a developer’s letter of intent

expressing an intention to conclude a contract in the future.

Under Russian law, a contractor may exercise a lien over the project he has constructed

and other property of the client in his possession if he is not paid in full.

The Polish Civil Code provides that, under certain circumstances, an investor and a

general contractor are jointly liable for payment towards a subcontractor, and that a

subcontractor may demand payment from either of them as a result.

In Spain, if the contractor becomes insolvent the employer is not entitled to terminate the

agreement, whatever its terms. The court must reach any decision regarding termination.

In the Netherlands, a contractor cannot be held liable for defects which are apparent when

the development is taken over but which are not mentioned in the taking over certificate.



6.7.3 Case Study

Azimut-Benetti SPA (Benetti Division) v Darrell Marcus Healey

Facts: Benetti (AB) in 2008 to purchase a luxury super yacht to be constructed by AB.

Shorecares wholly owned by the defendant, Darrell Healley, who had guaranteed SL’s

purchasing obligations under the contract with the shipbuilders AB. The price for the

construction and delivery of the yacht was €38 million, payable in several instalments, with the

delivery date of the yacht set for November 2011. SL paid a €500,000 deposit towards the yacht,

but then defaulted on payment of the first instalment. The contract contained a clause allowing

AB to terminate if SL failed to make payment of any sums due within 45 days of the due date.

Following default, AB was entitled to retain or recover from SL an amount equal to 20 per cent

of the price by way of liquidated damages as compensation for its estimated losses as a result of

the termination and azimut was obliged to return any other part in contract price it had already

received. In this case buyer defaulted on a payment and Azimut terminate the contract and

exercise its right against buyer about liquidated damages. Mr healey (defendant) resisted

payment under the guarantee, arguing that liquidated damages clause was a penalty not a genuine

pre estimate of loss and the provision was unenforceable.

Decision: High court judges gave final verdict for this case which satisfy both parties. In this

case Healey argument cannot be accepted because in initial stage of the contract both parties

came to an agreement for amount of liquidated damages which can be occurred in future and

according to that above case factors are come under liquidated damages clause not in penalty

clause. So that finally court give decision that Azimut entitled to has liquidated damages and

Azimut is obliged to return the balance of sums received from the buyer together with the buyers

suppliers if not yet installed in the yacht.



7.0 Conclusion

Law based this assignment fulfil with;

National Legal System of Sri Lanka

Sri Lankan court system and its procedures

Alternative Methods of Dispute Resolution available to parties to a construction process

The effect of the law of tort on the construction industry

Significance of common law within the construction process

Main parties to a construction contract and their respective role and responsibilities in

relation to the construction contract

Contractual obligations of a contractor and client in construction work

Prime requirements of a Company Law and their effect on the legal position of the entity

Employment law, health, safety and welfare, the sale, purchase and rental of goods, and

land law and property law relate to the operation of a company in construction

The effect of the European legal systems on related construction activities



8.0 References

Thambimuttu,V., Sri Lanka: Legal Research and Legal System. Nyulawglobal.org., 2009.

[online] available at: . [Accessed 24 May 2015].

Cooray,. AN INTRODUCTION TO THE LEGAL SYSTEM OF SRI LANKA. 2nd ed.

Colombo: Lake House Book Shop, 2007. Print.

Anon,. n.d., ADR Types & Benefits - Alternative_Dispute_Resolution., 2015. [online]

available at: http://www.courts.ca.gov/3074.htm. [Accessed 29 May 2015].

Scott, D. Alternative Dispute Resolution Techniques Resolving Disputes Without “Going

To War”: Frost Brown Todd Law Firm. Frostbrowntodd.com, 2004. [online] available at:

http://www.mediate.com/articles/sgubinia2.cfm. [Accessed 29 May 2015].

Prieditis Mara, Alessandra Sgubini, and Andrea Marighetto. Arbitration, Mediation and

Conciliation: Differences And Similarities From An International And Italian Business

Perspective. Mediate.com. N.p., 2004. [Online] available at:

http://www.mediate.com/articles/sgubinia2.cfm. [Accessed 29 May 2015].

Anon. n.d. Tort. [online] Available at: https://www.law.cornell.edu/wex/tort. [Accessed

25 May 2015].

Anon. n.d. Intentional tort. [ONLINE] Available at:

https://www.law.cornell.edu/wex/intentional_tort. [Accessed 29 May 2015].

Kadian. K,. n.d. Strict Liability Torts: Definition and Examples [ONLINE] Available at:

http://study.com/academy/lesson/strict-liability-torts-definition-and-examples.html.

[Accessed 25 May 2015].

Owen,S., Lewis,J.R., 1997. Law for the Construction Industry. 2nd ed. Harlow:

Longman.

Documents

Construction Law and Contract (Sri Lanka)