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Agreement & Schedule of Conditions of BUILDING CONTRACT for use in the Hong Kong Special Administrative Region Standard Form of Building Contract Private Edition - With Quantities Standard Form of Building Contract Private Edition With Quantities 2005 EDITION

HKIA 2005 Bldg Contract

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Agreement & Schedule of Conditions of

BUILDING CONTRACTfor use in the Hong Kong Special Administrative Region Standard Form of Building Contract Private Edition - With Quantities

Standard Form of Building Contract Private Edition With Quantities

2005 EDITION

ContentsArticles of Agreement Attestation The General Conditions 5.7 1 1.1 1.2 Interpretation and definitions 9 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 PAGE 5 5.5 8 5.6 PAGE Nominated Supply Contract documents Further drawings, details, descriptive schedules and similar documents Documents to be provided to Contractor on time Electronic copies of drawings Documents on Site Return of drawings Submission of manuals and assignment of warranties Submission of as-built drawings Limits to use of documents Issue of Architect's certificates Copy of notice to be given to Employer Statutory obligations Statutory Requirements Compliance with the Statutory Requirements Fees or charges Statutory undertakers and utility companies Setting out the Works Setting out and levels 8 17 8.1 8.2 8.3 Materials, goods, workmanship and work Types, standards and quality Inspection and tests Materials, goods, workmanship or work not in accordance with Contract Rectifying defects Dismissal from the Works Intellectual property rights Intellectual property in design of the Works Intellectual property in materials and goods Intellectual property in plant and equipment Payment of royalties included in Valuation Contractor's site management team Contractor's site management team Construction manager Access for the Architect to the Works Contractor to give access 25 24

Governing law Singular, plural, masculine and feminine 1.3 Method of reference to clauses and Articles 1.4 Articles of Agreement, Conditions and Appendix to be read as a whole 1.5 Clauses divided into sub-clauses to be read as a whole 1.6 Definitions 1.7 The role of the Engineer 1.8 Sectional completion of the Works 1.9 Communications 1.10 Notices of default or determination to be sent by special delivery 1.11 Parties to act reasonably and expeditiously 2 2.1 2.2 2.3 2.4 3 3.1 3.2 3:3 Contractor's obligations Contractor's obligations Contractor's responsibility Contractor's skill and care Contractor to inform Architect if he finds ambiguities in documents Master programme Master programme to be submitted Programmes to be updated Programme and other documents not to be documents forming the Contract Architect's instructions Architect may issue instructions up to the issue of the Final Certificate Architect to issue instructions in writing Compliance with Architect's instructions Contractor to carry out preventative work Documents forming the Contract and other documents 5.1 5.2 5.3 5.4 The documents forming the Contract Architect and Quantity Surveyor to keep documents available Copies of documents for Contractor Nominated Sub-Contract documents 20 19 16

6 6.1 6.2 6.3 6.4

7

25

8.4 8.5 9 9.1 9.2 9.3 9.4

4 4.1 4.2 4.3 4.4

27

5

10 10.1 10.2 11

27

28

1

12

Architect's representative

PAGE 28 18.4 Liquidated and ascertained damages 18.5 Damage by a Special Peril 19 Assignment and sub-letting 19.1 Assignment 19.2 Sub-letting 29 20 Injury to persons and property and indemnity to Employer Contractor to indemnify Employer 21 Insurance against injury to persons or property 21.1 Employees' Compensation Insurance 21.2 Third party liability insurance 21.3 Insurers and terms to be approved 21.4 Policies to be produced 21.5 Event of failure to insure 21.6 No prejudice to Contractor's indemnity 22 Insurance of the Works 22.1 Alternative clauses for Contractors' All Risks Insurance of the Works 22.2 Basic requirements for Contractors' All Risks Insurance of the Works 22.3 Specific requirements for Contractors' All Risks Insurance of the Works 22.4 Insurance of the Works to be in joint names and period of insurances 22.5 Parties' obligations if loss or damage occurs 22.6 Contractor's payment not more than insurance proceeds 22.7 Insurance without prejudice to Contractor's obligations 22A Insurance of the Works by the Contractor 22A.1 Contractor to effect Contractors' All Risks Insurance of the Works 22A.2 Insurer to be approved and remedy if Contractor fails to insure 22A.3 Use of annual policy maintained by Contractor 22B Insurance of the Works by the Employer 228:1 Employer to effect Contractors' All Risks Insurance of the Works 36 2213.2 Remedy if Employer fails to insure 22C Insurance of existing building and insurance of the Works by the

PAGE

12.1 Architect's representative 12.2 Delegation of duties and powers 12.3 Instruction to bind parties 13 Variations, Provisional Quantities, Provisional Items and Provisional Sums

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13.1 Architect's authority to issue instructions requiring a Variation 13.2 Instructions for Provisional Quantities, Provisional Items and Provisional Sums 13.3 Valuation of Contractor's work 13.4 Valuation rules 13.5 Adjustment of Contract Sum 13:6 Contractor's right to be present during measurement on Site 13.7 Variation necessitated by fault of Contractor 13.8 Valuation of Nominated Sub Contractor's work or Nominated Supplier's materials and goods 14 Contract Bills 33

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14.1 Quality and quantity of work included in Contract Sum 14.2 Standard Method of Measurement of Building Works 14.3 Errors in Contract Bills 15 Contract Sum Adjustment of Contract Sum 16 Materials and goods an or off-site Property in materials and goods Substantial Completion and defects liability 34 34

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17

34

17.1 Substantial Completion Certificate for the Works 17.2 Separate Defects Liability Period for each Section and Relevant Part 17.3 Rectifying defects 17.4 Defects Rectification Certificate for the Works 17.5 Separate certificate for each Section or Relevant Part 17.6 Damage by a Specified Peril 17.7 Other rights and remedies 18 Partial possession by Employer 18.1 Partial possession 18.2 Substantial Completion 18.3 Completion of rectifying defects

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22C.1 Employer to effect insurance against Specified Perils to the existing building

2

22C.2 Employer to effect Contractors' All Risks Insurance of the Works 22C.3 Remedy if Employer fails to insure 23 Possession, commencement and completion 23.1 Possession of Site 23.2 Commencement and completion 23.3 Postponement or suspension 24 Damages for non-completion 24.1 Architect to certify Contractor's failure to complete on time 24.2 Liquidated and ascertained damages 24.3 Refund if Completion Date revised 25 Extension of time 25.1 Contractor's first notice of delay 25.2 Contractor's second notice 25.3 Fixing new Completion Date 25.4 Contractor's default involved in the delay 25.5 Rate of progress 25.6 Nominated Sub-Contractors and Suppliers to be kept informed 26 Delay recovery measures 26.1 Delay recovery measures 26.2 Delay recovery proposals 26.3 Contractor to carry out delay recovery measures 26.4 Extension of time to cover shortfall in recovering delay 26.5 Contractor to be reimbursed for the cost of preparing the proposal if delay recovery not instructed 27 Direct loss and/or expense 27.1 Contractor's notice of claim for additional payment 27.2 Quantity Surveyor's ascertainment of Contractor's claim 27.3 Contractor's default involved in the delay or disruption 27.4 Nominated Sub-Contractor's claim for additional payment 28 Notice of claims for additional payment 28.1 Contractor to give notice of claim 28.2 Contractor to submit particulars 28.3 Condition precedent to Contractor's entitlement to additional payment 53 51 46 45

PAGE 29 Nominated Sub-Contractors and Nominated Suppliers 29.1 45

PAGE 57

Nomination of a sub-contractor or a supplier 29.2 Contractor's right of reasonable objection 29.3 Sub-contractor and supplier warranty to Employer 29.4 Contractor's tender for work provided for by a Prime Cost Sum 29.5 Nomination using the standard conditions 29.6 Contractor's responsibility for Nominated Sub-Contractors and Nominated Suppliers 29.7 Quantity Surveyor's notification of interim payments 29.8 Direct payment of Nominated SubContractors and Nominated Suppliers 29.9 Extension of time for completion of Nominated Sub-Contract works or delivery of Nominated Supply Contract goods 29.10 Substantial completion of Nominated Sub-Contract works 29.11 Architect to certify Nominated SubContractor's failure to complete on time 29.12 Early final payment to Nominated Sub-Contractor or Nominated Supplier 29.13 RE-nomination 29.14 Architects consent 29.15 Employer not liable to a Nominated Persons engaged by Employer Sub-Contractor or Nominated Supplier 30 30.1 30.2 30.3 Persons engaged by Employer Persons for wham the Employer is responsible Access to Site and permission to carry out work Contractor to fulfil his obligations to persons engaged by the Employer Facilities for statutory undertakers and utility companies Access to Site and facilities to carry out work Certificates and payments Interim Certificates and interim valuations Estimate of amount due in Interim Certificate Off-site materials or goods 63

31

64

55

32 32.1 32.2 32.3

3

32.4 Calculation of Retention 32.5 Retention Rules 32.6 Quantity Surveyor to prepare final account 32.7 Adjustment of the Contract Sum 32.8 Issue of Final Certificate 32.9 Effect of Final Certificate 32.10 Proceedings commenced before Final Certificate 32.11 Proceedings commenced after Final Certificate 32.12 Effect of Architect's certificates 32.13 Late payment 33 Surety Bond 33.1 Contractor to obtain guarantee from insurance company or bank 33.2 Release of insurance company or bank 33.3 Employer's remedy if Contractor fails to deliver bond 34 Antiquities 34.1 Effect of finding antiquities 34.2 Architect's instructions concerning a fossil, antiquity or object 35 Determination by Employer 35.1 Default by Contractor 35.2 Insolvency of Contractor 35.3 Employer's rights upon notice of default or determination 35.4 Consequences of determination 35.5 Quantity Surveyor to prepare final account 35.6 The final settlement 35.7 Delayed commencement of completion works 35.8 Other rights and remedies 36 Determination by Contractor 36.1 Default by Employer 36.2 insolvency of Employer 36.3 Consequences of determination 36.4 Contractor to submit final account 36.5 Quantity Surveyor to check final account 36.6 The final settlement 36.7 Architect to notify sub-contractors and suppliers 36.8 Other rights and remedies 37 Determination by Employer or Contractor 37.1 Grounds for determination 37.2 Site security 37.3 Consequences of determination

PAGE 37.4 37.5 37.6

PAGE Quantity Surveyor to prepare final account The final settlement Architect to notify sub-contractors and suppliers Fluctuations Fluctuation provisions only applicable if expressly stated to be Adjustment for fluctuations occurring after the Completion Date Notices, certificates and other communications Submission of notices, certificates and other communications Recovery of money due to the Employer Employer's power to recover damages etc. Settlement of disputes 85 Procedures and Designated Representatives Reference to Designated Representatives Reference to mediation Reference to arbitration Timing of arbitration Arbitrator's powers The place of arbitration Contractor to continue to proceed diligently Appendix Schedule 1 Form of Surety Bond to be given by the Contractor to the Employer 89 90 84

38 38.1 38.2

39 73

85

40

85

73 41 41.1 74 41:2 41.3 41.4 41.5 41.6 41.7 41.8

78 Schedule 2 Form of Warranty to be given by the Nominated Sub-Contractor to the Employer in consideration of Nomination Schedule 3 Form of Warranty to be given by the Nominated Supplier to the Employer in consideration of Nomination Index to The General Conditions 82 94

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Articles of AgreementThis Agreement is made on the ................................ day of ................................ 20 ......between ..................................................,................................................................................................ of ..................................................,............................................................................................ ..................................................,................................................................................................

(`the Employer') and ..................................................,................................................................................................ of ................................................................................................................................................ ..................................................,................................................................................................

(`the Contractor') Whereas the Employer wishes to have work carried out comprising: ..................................................,................................................................................................ ..................................................,................................................................................................ ..................................................,................................................................................................

(`the Works') at ............................................................................................................................................... ..................................................,................................................................................................

and has had Tender Documents comprising: (a) a form of tender (`The Form of Tender'); (b) drawings (`the Contract Drawings'); (c) a specification (`the Specification'); and (d) bills of quantities showing and describing the work to be carried out prepared by or under the direction of or at the request of the Architect; and whereas the Contractor has, based on the Tender Documents, made in the Form of Tender his calculation of the sum that he will require for carrying out the Works by pricing the bills of quantities;

5

and whereas the Contractor has given a fully priced copy of the bills of quantities (`the Contract Bills') to both the Employer and the Architect; and whereas the Architect has given each party one copy of the Articles of Agreement, the Appendix, the Conditions, the Contract Drawings, the Specification and the Contract Bills each signed by or on behalf of the parties. Now it is agreed as follows Article 1 The Contractor will carry out and complete the Works in accordance with and subject to the Contract for the consideration stated in Article 2. Article 2 The Employer will pay to the Contractor the sum of Hong Kong Dollars ...................................,................................................................................................................ ...................................,................................................................................................................ (HK$...................................,.......................................................................................................)

(`the Contract Sum') or such other sum that becomes payable in accordance with and subject to the Contract. Article 3 The Architect will be ................................................................................................................................................. of ............................................................................................................................................... ................................................................................................................................................... Article 4 The Quantity Surveyor will be ................................................................................................................................................... of ...............................................,..........................,.................................................................... ..................................................................................................................................................

6

Article 5 (1) In the event of the person appointed to act as either the Architect or the Quantity Surveyor ceasing to act, the Employer shall appoint a replacement as soon as practicable. (2) If the Contractor objects to the person appointed to succeed either the Architect or the Quantity Surveyor, the Contractor has the right to refer his objection to an arbitrator under the Contract provided the reference to arbitration is made within 14 days of the appointment. The person appointed as the replacement to the Architect or the Quantity Surveyor shall continue to act pending the award of the arbitrator appointed under Article 5(2) but shall immediately cease to act if so directed by the arbitrator's award. In which case the Employer shall appoint a further replacement as soon as practicable. The Contractor shall have the right of objection under Article 5(2) to a further appointment of either the Architect or the Quantity Surveyor. A person appointed as the replacement to the Architect or the Quantity Surveyor shall not be entitled to disregard or overrule any agreement, approval, certificate, confirmation, consent, decision, direction, dissent, instruction, notice, notification, opinion, request or requirement given or made by the person previously appointed save insofar as the Contract permits.

(3)

(4)

(5)

Article 6 If a dispute arises under or in connection with the Contract, the parties agree to resolve the dispute in accordance with the dispute settlement procedures in clause 41.

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Attestation* SIGNED AND SEALED as a deed / SIGNED by the Employer (signature of signatory for the Employer)

..(signature of witness)

(name and office held by signatory for the Employer)

.. ..(name and occupation of witness)

(company seal to be impressed here if executed as a deed by a limited company)

*SIGNED AND SEALED as a deed / SIGNED by the Contractor (signature of signatory for the Contractor) (name and office held by signatory for the Contractor) .. (signature of witness) .. .. (name and occupation of witness)

(company seal to be impressed here if executed as a deed by a limited company)

*delete as applicable

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The General Conditions1 Interpretation and definitions Governing law The Contract shall be governed by and construed according to the laws for the time being in force in Hong Kong. Singular, plural, masculine and feminine Words in the singular include the plural and vice versa, and words in the masculine include the feminine and the neuter. Method of reference to clauses and Articles Unless stated otherwise a reference in the Articles, the Conditions or the Appendix to any clause means that clause of the Conditions and a reference to an Article means that Article of the Articles of Agreement. Articles of Agreement, Conditions and Appendix to be read as a whole The Articles of Agreement, the Conditions and the Appendix are to be read as a whole. Therefore, unless stated otherwise, each one must be read subject to any relevant qualification or modification in any other one. Clauses divided into sub-clauses to be read as a whole Where a clause is divided into sub-clauses, the clause is to be read as a whole, and each sub-clause shall relate to the others as if there was no division between them. Definitions The following words and phrases in the Articles of Agreement, the Conditions and the Appendix shall have the meanings given below unless the context in which they appear requires otherwise or the Articles, the Conditions or an item or entry in the Appendix provides otherwise: Appendix: the Appendix to the Conditions. Architect: the person named as the Architect in Article 3, or any successor appointed under Article 5. Articles or Articles of Agreement: the Articles of Agreement to which the Conditions are annexed. Commencement Date: the date stated in the Appendix for the commencement of the Works. communication: the giving, submitting or issuing of, without limitation, any agreement, approval, authorisation, certificate, confirmation, consent; decision, delegation, direction, dissent, determination, endorsement, instruction, notice, notification, opinion, request, requirement or statement. Completion Date: the date stated in the Appendix by which the Works or a Section are to be completed or such later date to be fixed by the Architect under clause 25.

1.1

1.2

1.3

1.4

1.5

1.6

9

1

Interpretation and definitions (Cont'd) Conditions: the Conditions of Agreement and Schedule of Conditions of Building Contract for use in the Hong Kong Special Administrative Region, Private Edition With Quantities and any Special Conditions. Contract: the Articles of Agreement, the Appendix, the Form of Tender submitted by the Contractor, the Employer's letter of acceptance of the Contractor's tender and any correspondence between the parties expressed to form part of the Contract, the Special Conditions, if any, the Conditions, the Contract Drawings, the Specification and the Contract Bills. Contract Bills: the priced bills of quantities referred to in the recitals of the Articles and submitted by the Contractor with his tender, or a certified true copy of those bills of quantities. Contract Drawings: the drawings referred to in the first and fourth recitals of the Articles and enumerated as such in the Contract Bills or the Specification. Contract Sum: the sum stated in Article 2, or such other sum that becomes payable in accordance with the Contract. Contractor. the person named as the Contractor in the Articles. Contractors' All Risks Insurance of the Works: insurance which provides cover against physical loss of or damage to the Works, temporary works and materials and goods, as described in clause 22. Date for Possession of the Site: the date or dates for the possession of the whole or parts of the Site stated in the Appendix under the reference to clause 23.1. Date of Substantial Completion: the date stated in the Substantial Completion Certificate for the Works or a Section, issued by the Architect under clauses 17.1 and 17.2. day: a calendar day and includes Sundays and other days which are general holidays by virtue of the General Holidays Ordinance (Chapter 149, Laws of Hong Kong). Defects Liability Period: the period stated in the Appendix under the reference to clause 17.3, commencing on the day after the Date of Substantial Completion of the Works or a Section or the day after the Relevant Date of Substantial Completion of a Relevant Part. Defects Rectification Certificate: a certificate issued by the Architect to the effect that all defects, shrinkages and other faults have been rectified in accordance with the Contract, as described in clauses 17.4 and 17.5. direct loss andlor expense: the monetary consequences that flow naturally without other intervening cause and independently of special circumstances because of the direct consequences of a qualifying event and which are not otherwise reimbursed to the Contractor.

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1

Interpretation and definitions (Cont'd) Domestic Sub-Contractor: a person, other than a Nominated Sub-Contractor, to whom the Contractor sub-lets any part of the Works and includes a labour only subcontractor. Employer: the person named as the Employer in the Articles. Engineer: a person engaged as a member of the Employer's design team for the design and supervision of one or more of the geotechnical, civil, structural or building services elements of the Works, as referred to in clause 1.7. Excepted Risks: (a) Any consequence of war (whether war be declared or not) in which Hong Kong is actively engaged, the invasion of Hong Kong, acts of terrorists in Hong Kong, civil war, rebellion, revolution or military or usurped power in Hong Kong, riot, commotion or disorder in Hong Kong other than amongst the employees of the Contractor or any person for whom the Contractor is responsible; (b) the Architect's design of the Works insofar as damage, loss or injury is the direct consequence of the design; (c) a cause due to any neglect or default of the Architect, the Employer or any person for whom the Architect or the Employer is responsible; (d) ionizing radiation or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel, radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof; and (e) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds. Final Certificate: the certificate issued by the Architect stating the Final Contract Sum and the total of the amounts of interim Certificates to be set off against that sum, as described in clause 32.8. Final Contract Sum: the sum resulting from the adjustment of the Contract Sum in accordance with the Contract. Form of Tender: the form of tender referred to in the first recital of the Articles as being part of the Tender Documents. Hong Kong: the Hong Kong Special Administrative Region. Interim Certificate: a certificate issued by the Architect stating the amount of an interim payment due to the Contractor, as described in clause 32.1. Limit of Retention: the amount stated in the Appendix under the reference to clause 32.4 as the limit to the amount of Retention to be held by the Employer on the payment for the Contractor's work in progress. Nominated Sub-Contract: the sub-contract between the Contractor and a Nominated Sub-Contractor.

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Interpretation and definitions (Cont'd) Nominated Sub-Contractor: a sub-contractor nominated by the Architect under clause 29 to carry out work forming part of the Works. Nominated Supplier: a supplier nominated by the Architect under clause 29 to supply materials or goods for incorporation into the Works. Nominated Supply Contract: the supply contract between the Contractor and a Nominated Supplier. parties: the Employer and the Contractor. Period of Interim Certificates: the period stated in the Appendix under the reference to clause 32.1 as the interval between the issuing of Interim Certificates. person: an individual, firm, partnership, or body corporate. person for whom the Contractor is responsible: the Contractor's servants or agents, sub-contractors, suppliers, persons employed or engaged in connection with the Works and persons who may properly be on the Site upon or in connection with the Works other than the Employer or any person for whom the Employer is responsible. person for whom the Employer is responsible: the Employer's servants or agents and the persons listed in clause 30.1. postpone: to defer the commencement of operations on an activity. Prime Cost Sum: a sum either provided in the Contract Bills or arising as described in clause 29.1 for work to be carried out by a Nominated Sub-Contractor or for materials or goods to be obtained from a Nominated Supplier. Provisional Item: an item of work identified as provisional in the Contract Bills to be carried out by the Contractor if instructed to do so by the Architect under clause 13.2. Provisional Quantities: an estimated quantity of work identified as provisional in the Contract Bills, where the actual quantity could not be accurately determined when the bills of quantities were prepared, to be carried out by the Contractor if instructed to do so by the Architect under clause 13.2. Provisional Sum: a sum provided in the Contract Bills for work or for costs, which could not be entirely foreseen, defined or detailed when the bills of quantities were prepared, to be paid to the Contractor if instructed by the Architect under clause 13.2 to carry out such work or incur such costs. Quantity Surveyor: the person named as the Quantity Surveyor in Article 4, or any successor appointed under Article 5. Relevant Date: the date upon which the Employer took possession of a Relevant Part under clause 18.

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Interpretation and definitions (Cont'd) Relevant Part: the part of the Works or part of a Section taken possession of by the Employer under clause 18 before Substantial Completion of the Works or that Section. Retention: the sum calculated in accordance with clause 32.4 and retained by the Employer from the gross valuation of the Contractor's work in progress included in an Interim Certificate. Retention Percentage: the percentage entered in the Appendix under the reference to clause 32.4, used to calculate the Retention in accordance with the rules set out in that clause. Section: a part of the Works for which a separate Completion Date is stated in the Appendix where the Contract provides for sectional completion of the Works. Site: the land and other places provided by the Employer for the purpose of carrying out the Works. Special Condition: a condition of contract expressly referred to as a Special Condition of Contract, which adds to or amends the Conditions and is annexed to the Conditions. special delivery: a communication which is either delivered by courier or sent by registered post or recorded delivery. Specialist Contractor: a person, not being a statutory undertaker or utility company as referred to in clause 6.4(1), engaged by the Employer to carry out work directly connected with or ancillary to but not forming part of the Works, as described in clause 30. Specialist Works: work directly connected with or ancillary to but not forming part of the Works; to be carried out by a Specialist Contractor. Specification: the specification referred to in the first and fourth recitals of the Articles which describes, without limitation, the types, standards and quality of the materials and goods to be used, the standard and quality of workmanship required, the manner in which work processes are to be carried out, the performance requirements and other matters and things relating to the construction of the Works. Specified Perils: fire, lightning, explosion, storm, tropical cyclone, flood, bursting or overflowing of water tanks, apparatus or pipes, earthquake, aircraft and other aerial devices or articles dropped from them. Standard Conditions of Nominated Sub-Contract: the Standard Form of Sub-Contract for use where the sub-contractor is nominated under the Standard Form of Building Contract. Standard Conditions of Nominated Supply Contract: the Standard Form of Supply Contract for use where the supplier is nominated under the Standard Form of Building Contract.

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Interpretation and definitions (Cont'd) sub-contractor. a person who enters into a sub-contract with the Contractor to carry out work forming part of the Works and includes a Domestic Sub-Contractor and a Nominated Sub-Contractor. Substantial Completion: the state of completion where the Works or a Section have been substantially completed to the Architect's satisfaction and have passed the required inspections and tests, as referred to in clauses 17.1 and 17.2. Substantial Completion Certificate: a certificate issued by the Architect stating the date when in his opinion the Works or a Section have reached Substantial Completion. substantially completed: the state of completion where the Works or a Section may not be absolutely completed or entirely free from defects but have reached the stage where they can be taken over and used by the Employer for their intended purpose and where the unfinished items of work and the remaining defects then patent are only of a minor nature and extent and their completion or rectification will not unreasonably interfere with or interrupt the taking over of the Works or Section. supplier: a person who enters into a supply contract with the Contractor to supply materials or goods and includes a Nominated Supplier. suspend: to cease operations for a period of time on an activity in which work has commenced. Tender Documents: the documents and drawings referred to in the first recital of the Articles, or a certified true copy of those documents and drawings. Valuation: the valuation made by the Quantity Surveyor, in accordance with the valuation rules under clause 13.4, of work carried out in response to an Architect's instruction requiring a Variation, remeasurement of Provisional Quantities and Provisional items or to expend Provisional Sums. Variation: a change instructed by the Architect to the design, quality or quantity of the Works including: (i) (ii) (iii) an alteration to the type, standard or quality of any of the materials or goods comprising the Works; the addition, substitution or omission of work; and the removal from the Site of materials or goods and the demolition and removal of work except where provided for in the Contract or where the materials, goods or work are not in accordance with clause 8.1;

or the imposition of an obligation or restriction instructed by the Architect regarding: (iv) (v) access to the Site or use of any parts of the Site; limitation of working space;

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1

Interpretation and definitions (Cont'd) (vi) limitation of working hours; or (vii) the sequence of carrying out or completing work; or the addition or alteration to or omission of such obligations or restrictions imposed by the Contract. Works: the work briefly described in the Articles of Agreement and shown upon, described by or referred to in the Contract including any change made to the work in accordance with the Contract.

1.7

The role of the Engineer (1) The Architect may, from time to time, delegate any of his duties and powers under the Contract to an Engineer. (2) The delegation shall be in writing and copied to the Contractor. It shall specify the duties and powers that are delegated and shall remain in force until changed or terminated in writing by the Architect. Where in the context of the wording of a clause in the Conditions or where recognition of the Engineer's statutory responsibility requires it, the word `Architect' in the Conditions shall be deemed to be read as `Engineer'.

(3)

1.8

Sectional completion of the Works (1) Where sectional completion of the Works is provided for in the Contract, a reference to the Works shall be deemed to mean the Works or a Section. (2) The phrase `the whole of the Works' means the Works including all Sections.

1.9

Communications Unless otherwise stated, all notices, certificates and other communications under the Contract between the Employer, the Architect, the Quantity Surveyor and the Contractor shall be in writing. Notices of default or determination to be sent by special delivery All notices of default or determination under clauses 35, 36 and 37 shall be sent by special delivery. Parties to act reasonably and expeditiously

1.10

1.11

(1)

The parties, the Architect and the Quantity Surveyor shall act reasonably and expeditiously in all matters under the Contract including, without limitation, giving or withholding consent, approval or agreement, valuing Variations and certifying. All requirements shall be reasonable requirements and, without limitation, the term to the Architect's satisfaction' shall be construed as meaning to the Architect's reasonable satisfaction and the term `practicable' shall mean reasonably practicable.

(2)

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2

Contractor's obligations Contractor's obligations (1) The Contractor shall in compliance with the Contract: (a) (b) organize, manage, plan and supervise the carrying out of the Works; co-ordinate the carrying out of the Works including the interface between his own work and the work carried out by each Domestic Sub-Contractor, Nominated Sub-Contractor, Specialist Contractor, statutory undertaker and utility company; assist in the co-ordination of their work by each Domestic Sub-Contractor, Nominated Sub-Contractor, Specialist Contractor, statutory undertaker and utility company with the work of each of the others; design sufficient, safe and adequate temporary works to enable the Contractor to comply with his other obligations under the Contract, except where the design of any temporary works is a statutory obligation of any person other than the Contractor or any person for whom the Contractor is responsible; carry out any work involved in the development of the Architect's design that may be specified in the Contract; prepare all shop drawings and co-ordination drawings required by the Contract; carry out the maintenance of mechanical and electrical equipment where required to do so by the Contract for the period of time so specified; take responsibility for the care of the Works, except for lass or damage arising from the Excepted Risks, from the Commencement Date until 14 days after Substantial Completion of the Works or 14 days after the determination of the employment of the Contractor, whether valid or not, whichever is earlier, except that the Contractor's responsibility far the care of the Works shall terminate in relation to a Section or Relevant Part 14 days after the Employer takes possession of that Section or Relevant Part; and carry out the construction of and complete the Works using materials, goads and workmanship of the types, standards and quality specified in the Contract. Where the Contract requires the Contractor to prepare details, to carry out the design or the development of the Architect's design, unless the requirement of fitness for purpose is specifically stated, the design or the development of the Architect's design shall be carried out with reasonable skill and care and the Contractor shall be responsible to the Employer for such work.

2.1

(c)

(d)

(e)

(f) (g)

(h)

(i)

(2)

2.2

Contractor's responsibility The Contractor shall remain wholly responsible for carrying out and completing the Works in accordance with the Contract whether or not the Architect or the Architect's representative, if appointed: (a) visits the Works or a place where materials or goods are being manufactured or stored, work is being prepared, or design is being carried out;

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2

Contractor's obligations (Cont'd) (b) inspects or tests any materials or goods; (c) exercises his powers under clause 8; or (d) includes the value of any materials, goods or work in an Interim Certificate.

2.3

Contractor's skill and care The Contractor shall exercise in the performance of his obligations under the Contract all the skill, care and diligence to be expected of a competent contractor experienced in carrying out work of a similar scope, nature and size to the Works. Contractor to inform Architect if he finds ambiguities in documents (1) The Contractor shall immediately inform the Architect if the Contractor finds an ambiguity or discrepancy in or divergence between the following documents: (a) (b) (c) (d) the Contract Drawings; the Specification; the Contract Bills; the descriptive schedules and other similar documents referred to in clause 5.3(d); the Nominated Sub-Contract documents and the Nominated Supply Contract documents referred to in clauses 5.4 and 5.5; and the further drawings, details, descriptive schedules and similar documents referred to in clause 5.6 provided from time to time during the carrying out of the Works.

2.4

(e)

(f)

(2)

If the Architect agrees with the Contractor, he shall issue an instruction to resolve the ambiguity, discrepancy or divergence as soon as practicable after receipt of the notice from the Contractor and the instruction shall, if considered appropriate by the Architect, require a Variation.

3

Master programme Master programme to be submitted (1) The Contractor shall submit to the Architect within the time stated in the Appendix: (a) 6 copies of a master programme prepared for his own purposes for organizing, managing, planning, supervising and co-ordinating the carrying out of the Works and completing them by the Completion Date; a method statement describing the methods of construction and the resources that he intends to use to carry out the Works; a list of the names and details of the site management and supervisory team personnel, referred to in clause 10, with job descriptions and details of their durations on the Site; and

3.1

(b)

(c)

17

3

Master programme (Cont'd) (d) a list of the plant, equipment and temporary works which he intends to supply, use or construct, as the case may be. The master programme shall: show the activities and the sequence in which the Contractor proposes to carry out the Works; show the periods of time estimated for each activity; and make allowance for the carrying out of Specialist Works, insofar as a general description of these works is given in the Contract, and work by statutory undertakers and utility companies as referred to in clause 6.4(l). The Contractor shall submit 6 copies of any other programme that may be required by the Contract at the time or times so specified. Where any other part of the Contract sets out requirements in respect of the submissions to be made by the Contractor under clause 3.1, the submissions shall be made in accordance with those requirements.

(2) (a)

(b) (c)

(3)

(4)

3.2

Programmes to be updated (1) The Contractor shall regularly update the master programme and any other programme used in carrying out the Works to reflect the current status of the progress of the Works, and shall submit 6 copies of the updated programme to the Architect at the intervals stated in the Contract (or, if this is not stated, at 3 month intervals) and in any event within 28 days of: (a) an Architect's decision to fix a new Completion Date under clause 25.3; (b) the Employer taking possession of a Section or a Relevant Part of the Works; (c) the determination of the employment and re-nomination of a Nominated Sub-Contractor; or (d) the termination of a supply contract and re-nomination of a Nominated Supplier. (2) The programme shall be revised to indicate the modifications that the Contractor believes are necessary to achieve completion of the Works by the Completion Date if the Contractor decides to take action in response to the Architect's notice under clause 25.5. Programme updates shall be based upon the logic, activities and durations shown in the previous programme. Any change to the programme structure apart from activity status that may be necessary shall be clearly indicated and explained to the Architect.

(3)

18

3

Master programme (Cont'd) Programme and other documents not to be documents forming the Contract Neither the programme, the method statement nor other document submitted under clause 3 shall be documents forming the Contract and no comment made by the Architect on any of these documents shall impose an obligation on the Employer. Architect's instructions Architect may issue instructions up to the issue of the Final Certificate The Architect may issue instructions that he is empowered to issue under the Conditions at any time up to the issue of the Final Certificate including during the time that the Contractor may be carrying out work after the Date of Substantial Completion of the Works, but he shall not instruct a Variation after the issue of the Defects Rectification Certificate for the Works, a Section or a Relevant Part as the case may be. Architect to issue instructions in writing (1) The Architect must issue all instructions in writing in accordance with clause 1.9. All oral instructions given must be confirmed in writing within 5 days of giving the oral instruction. If the Architect gives an oral instruction that the Contractor believes requires a Variation it shall have no immediate effect, the Contractor shall confirm the oral instruction requiring a Variation in writing to the Architect within 7 days of it being issued and if not dissented to in writing by the Architect within 7 days from his receipt of the Contractor's confirmation the Variation shall take effect on the expiry of the latter 7 days. (2) Where an Architect's oral instruction requiring a Variation has been confirmed in writing by the Contractor under clause 4.2(1) and not dissented to by the Architect, the Architect shall issue the written instruction for a Variation for record purposes as soon as practicable after the Contractor's confirmation.

3.3

4

4.1

4.2

4.3

Compliance with Architect's instructions (1) Subject to clauses 4.2(1) and 4.3(2), the Contractor shall comply with all instructions that the Architect is empowered by the Conditions to issue as soon as practicable. If there is a disagreement between the Architect and the Contractor as to whether an instruction involves a Variation, the Contractor shall comply with the instruction and may, if he is not satisfied, require the disagreement to be resolved under clause 41. (2) If the Contractor disagrees that the Architect is empowered by the Conditions to issue an instruction he may within 7 days of receipt of that instruction require the disagreement to be resolved under clause 41. If the Contractor does not begin to comply with an instruction within 7 days after receipt of a written notice from the Architect requiring compliance with that instruction in accordance with clause 4.3(1) and the Architect issues a certificate to that effect by special delivery, the Employer may, without prejudice to his other rights and remedies, engage other persons to carry out that instruction. All additional costs incurred by the Employer in connection with the employment of the other persons to carry out that instruction may be recovered from the Contractor under clause 40 or as a debt.

(3)

19

4.

Architect's instructions (Cont'd) (4) The Contractor shall provide reasonable access to the persons engaged by the Employer under clause 4.3(3) and shall permit them to carry out their work without hindrance. Contractor to carry out preventative work (1) In the event of an emergency caused by an event arising out of or in connection with the Works that threatens the safety of the Works or any person or property, the Contractor shall immediately: (a) carry out all necessary preventative work without waiting for an Architect's instruction; and immediately inform the Architect of the emergency and of the action taken or preventative work being carried out.

4.4

(b)

(2)

The Architect shall issue an instruction confirming a Variation for preventative work carried out initially without an Architect's instruction, provided that the work was not required to be carried out in fulfilment of a Contractor's obligation or because of a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible.

5

Documents forming the Contract and other documents The documents forming the Contract (1) The documents forming the Contract shall be: (a) (b) the Articles of Agreement and the Appendix; the Form of Tender submitted by the Contractor together with the Employer's letter of acceptance of the Contractor's tender and any correspondence between the parties expressed to form part of the Contract; the Special Conditions if any; the Conditions; and the Contract Drawings, the Specification and the Contract Bills.

5.1

(c) (d) (e) (2)

The order of precedence of the documents forming the Contract shall be as listed in paragraphs (a) to (e) above and: (a) for the purpose of adjusting the Contract Sum the Contract Bills shall take precedence over the Contract Drawings and the Specification; but for all other purposes including carrying out the construction of and completing the Works the Contract Drawings and the Specification shall take precedence over the Contract Bills.

(b)

20

5

Documents forming the Contract and other documents (Cont'd) Architect and Quantity Surveyor to keep documents available The Architect shall provide two copies, certified on behalf of the Employer as a true copy, of each of the documents forming the Contract and two certified true copies of each of the documents forming the Nominated Sub-Contracts and the Nominated Supply Contracts as referred to in clauses 5.4 and 5.5, and the Architect and the Quantity Surveyor shall both keep one of each of these copies available at all reasonable times for the purposes of the Contract. Copies of documents for Contractor As soon as practicable after the acceptance of the Contractor's tender the Architect shall provide the Contractor, without charge, with: (a) 1 copy, certified on behalf of the Employer as a true copy, of each of the documents forming the Contract; 3 further copies of the Contract Drawings and the Specification; 3 copies of the unpriced bills of quantities; and 3 copies of any descriptive schedules or other similar documents prepared by or under the direction of the Architect before the acceptance of the Contractor's tender and necessary for use in carrying out the Works.

5.2

5.3

(b) (c) (d)

5.4

Nominated Sub-Contract documents The Architect shall provide the Contractor, without charge, with 3 further copies of the Nominated Sub-Contract, the sub-contract drawings, the sub-contract specification, the sub-contract bills of quantities or schedule of quantities and rates, as the case may be, descriptive schedules and other similar documents as soon as practicable after the award of each Nominated Sub-Contract. Nominated Supply Contract documents The Architect shall provide the Contractor, without charge, with 3 further copies of the Nominated Supply Contract, the supply contract drawings, the supply contract specification, the supply contract bills of quantities or schedule of quantities and rates, as the case may be, descriptive schedules and other similar documents as soon as practicable after the award of each Nominated Supply Contract. Further drawings, details, descriptive schedules and similar documents (1) The Architect shall provide the Contractor, without charge, and from time to time during the carrying out of the Works, with 3 copies of all further drawings, details, descriptive schedules or similar documents (referred to in clause 5 as `the supplementary documentation') that, in the Architect's opinion, are reasonably necessary for use in carrying out the Works or to explain or amplify the Contract Drawings, the Nominated Sub-Contract drawings and the Nominated Supply Contract drawings. (2) If in the Contractor's opinion he requires more supplementary documentation than that provided by the Architect under clause 5.6(1) he shall submit a written request to the Architect specifying what further supplementary documentation he requires.

5.5

5.6

21

5

Documents forming the Contract and other documents (Cont'd) (3) It shall be at the sole discretion of the Architect to decide which, if any, of the supplementary documentation requested by the Contractor the Architect will provide. Documents to be provided to Contractor on time (1) The supplementary documentation referred to in clause 5.6 shall be provided when, having regard to the progress of the Works and the Contractor's procurement, fabrication and other lead in times, it is reasonably necessary for the Contractor to receive it. (2) The Contractor shall inform the Architect sufficiently in advance of the time that he requires the supplementary documentation to enable the Architect to fulfil his obligations under clause 5.7(1).

5.7

5.8

Electronic copies of drawings If, within 14 days after the acceptance of the Contractor's tender, the Contractor requests the Architect in writing to do so, the Architect shall provide the Contractor, without charge, with electronic copies of all of the drawings required to be provided under clauses 5.3, 5.4, 5.5 and 5.6 that have been produced electronically in lieu of the hard copies referred to in those clauses. Documents on Site The Contractor shall keep on the Site so as to be available to the Architect and the Quantity Surveyor at all reasonable times 1 copy of: (a) (b) (c) (d) (e) the Contract Drawings; the Specification; the unpriced bills of quantities; the programmes and other documents referred to in clause 3; the descriptive schedules or other similar documents referred to in clause 5.3 prepared by the Architect before the acceptance of the Contractor's tender; the Nominated Sub-Contract documents and Nominated Supply Contract documents referred to in clauses 5.4 and 5.5; the supplementary documentation referred to in clause 5.6 provided by the Architect from time to time during the carrying out of the Works; and all other documents that the Contractor is required to keep on Site in fulfilment of his statutory obligations.

5.9

(f)

(g)

(h)

5.10

Return of drawings The Contractor shall return to the Architect all drawings, specifications, details, descriptive schedules and other similar documents provided under clause 5, if required by the Architect to do so, either upon the issue of the Final Certificate or the final conclusion of any proceedings to which the Contractor is a party, whichever is later and the Contractor may take copies for his own records.

22

5.

Documents forming the Contract and other documents (Cont'd) Submission of manuals and assignment of warranties (1) The Contractor shall submit to the Architect all the operation and maintenance manuals received by the Contractor. (2) The Contractor shall assign to the Employer (so far as he is lawfully able to do so) the benefits of all suppliers' and sub-contractors' warranties, guarantees or other ancillary agreements for materials, goods or work insofar as they are required by the Contract, Nominated Sub-Contracts or Nominated Supply Contracts, other than the direct warranties to the Employer required under the Nominated Sub-Contracts and Nominated Supply Contracts, within 60 days after the issue of the Substantial Completion Certificate for the whole of the Works. Where the Contractor assigns the benefit of a suppliers' or sub-contractors' warranty, guarantee or other ancillary agreement for materials, goods or work to the Employer, the Employer shall exhaust all remedies under the warranty, guarantee or ancillary agreement before enforcing the terms of the Contract against the Contractor in respect of any matter for which a cause of action exists against the sub-contractor or supplier under the warranty, guarantee or other ancillary agreement.

5.11

(3)

5.12

Submission of as-built drawings (1) The Contractor shall submit to the Architect 2 copies of a complete set of the asbuilt drawings that are required by the Contract, Nominated Sub-Contracts or Nominated Supply Contracts within 60 days of the issue of the Substantial Completion Certificate for the whole of the Works. (2) Where the drawings referred to under clauses 5.3, 5.4, 5.5 and 5.6 have been issued electronically, the Contractor shall, if so required by the Architect, provide the as-built drawings electronically.

5.13

Limits to use of documents (1) The Contractor shall not use any of the documents referred to in clause 5 for any purpose other than the Works and any proceedings relating to the Contract. (2) Neither the Employer, the Architect nor the Quantity Surveyor shall divulge any of the rates or prices in the Contract Bills or use them except for the purposes of the Contract and any proceedings relating to the Contract.

5.14

Issue of Architect's certificates The Architect shall issue all certificates to the Employer and shall, at the same time, issue a copy of each certificate to the Contractor. Copy of notice to be given to Employer Whenever the Architect issues a notice to the Contractor by special delivery, he shall issue a copy of the notice to the Employer at the same time.

5.15

23

6

Statutory obligations Statutory Requirements The Contractor shall comply with and give the notices required by any Ordinance, regulation, rule, order or by-law applicable to the Works (`the Statutory Requirements') which are to be complied with by the Contractor. Compliance with the Statutory Requirements (1) The Contractor shall immediately notify the Architect if the Contractor finds that carrying out the Works in compliance with the Contract or with an Architect's instruction requiring a Variation will infringe the Statutory Requirements. (2) If the Architect agrees with the Contractor, he shall issue an instruction to resolve the infringement as soon as practicable after receipt of the notice and the instruction shall, if appropriate, require a Variation.

6.1

6.2

6.3

Fees or charges (1) The Contractor shall pay all fees or charges legally demandable under the Statutory Requirements. (2) The net amount of those fees or charges paid by the Contractor shall be added to the Contract Sum unless they: (a) are fees or charges that the Contractor is liable to pay under the Statutory Requirements, and the liability was known prior to the date for submission of tenders and has not been increased; are priced, or are required to be allowed for, in the Contract Bills; are provided for by a Provisional Sum; or arise out of a default, delay or failure by the Contractor or a subcontractor to comply with the Statutory Requirements or the Contract.

(b) (c) (d)

6.4

Statutory undertakers and utility companies (1) Statutory undertakers or utility companies carrying out work in pursuance of their statutory obligations and not having a contractual relationship with the Employer, the Contractor or any person for whom the Contractor is responsible shall be classified as statutory undertakers or utility companies and not Nominated Sub-Contractors or persons engaged by the Employer under clause 30 and the fees or charges for their work shall be regarded as fees and charges legally demandable under the Statutory Requirements and processed in accordance with clause 6.3. (2) The Contractor shall allow those persons reasonable access to the Site, permit them to carry out their work and provide them with the facilities referred to in clause 31. Statutory undertakers or utility companies engaged under contracts with the Employer to carry out work directly connected with or ancillary to but not forming part of the Works shall be classified as Specialist Contractors as referred to in clause 30.1.

(3)

24

6

Statutory obligations (Cont'd) (4) Statutory undertakers or utility companies engaged under contracts with the Contractor or a Nominated Sub-Contractor to carry out work forming part of the Works shall be classified as sub-contractors or sub-sub-contractors as the case may be.

7

Setting out the Works Setting out and levels (1) The Architect shall provide the Contractor with accurately dimensioned setting out drawings containing the information and levels necessary for him to set out the Works. (2) The Contractor shall be responsible for accurately setting out the Works and shall correct any error arising from inaccurate setting out at his own cost unless the Architect accepts the error without correction subject to a reasonable reduction in the Contract Sum having regard to the Employer's loss of value of the Works and any expenses that he may incur arising from the inaccurate setting out.

8

Materials, goods, workmanship and work Types, standards and quality (1) The Contractor must provide all materials and goods of the types, standards and quality described in the Contract to the Architect's satisfaction that the Contractor has met these requirements. (2) Where the Contractor is responsible for the selection of the materials and goods in accordance with a performance specification or otherwise; the materials and goods must be fit for the purpose stated in the Contract. If any of the specified materials or goods are not procurable, then the Contractor shall submit alternative proposals for materials or goods of similar type and standard and of comparable quality and price to the Architect for his approval; and (a) if the proposed alternative materials or goods are of similar type and standard and of comparable quality and price to those specified, and the Architect approves them, the substitution of the alternative materials or goods for those specified shall be made with no adjustment to the Contract Sum; or if the proposed alternative materials or goods are not of similar type and standard or comparable quality or price to those specified, and the Architect approves them, he shall instruct a Variation to adjust the type, standard, quality or price.

8.1

(3)

(b)

(4)

The Contractor shall provide the Architect, upon his request, with vouchers, test certificates or other evidence to satisfy the Architect that the materials and goods comply with the Contract. The Contractor's workmanship must be of the standard and quality described in the Contract to the Architect's satisfaction.

(5)

25

8

Materials, goods, workmanship and work (Cont'd) (6) All work must be carried out in a proper and workmanlike manner in accordance with the Contract or, in the absence of any specific performance requirements, to the Architect's satisfaction.

8.2

Inspection and tests (1) The Contractor shall carry out or, if so required by the Contract, arrange for a third party to carry out, the tests specified in the Contract in compliance with the specified testing procedures. (2) In addition to the tests specified in the Contract, the Architect may instruct the Contractor to open up for inspection any work covered up and to carry out, or arrange for a third party to carry out, tests of materials and goods (whether or not already incorporated in the Works) and work which has been carried out. The cost of the testing, the opening up for inspection and any consequential making good shall be added to the Contract Sum unless: (a) (b) the inspection or test is provided for in the Contract Bills; the inspection or test shows that the materials, goods, workmanship or work are not in accordance with clause 8; the inspection or test was considered necessary by the Architect because, as a result of the failure of a previous inspection or test, further investigation of similar materials, goods or work was required to establish to his satisfaction their compliance with clause 8; or the work was carried out without the inspection notice required by the Contract.

(3)

(c)

(d)

8.3

Materials, goods, workmanship or work not in accordance with Contract The Architect may, if any materials, goods, workmanship or work are not in accordance with the Contract, instruct: (a) the removal from the Site and the replacement of materials and goods that are not in accordance with clause 8; the repair or demolition, removal and reconstruction of work which, in respect of materials, goods or workmanship, is not in accordance with clause 8; the acceptance, without replacement or reconstruction, of some or all of the materials, goods or work that are not in accordance with clause 8, subject to a reasonable reduction in the Contract Sum having regard to the reduction in the value of the materials, goods or work; and a Variation for alternative remedial work to some or all of the materials, goods or work as is reasonably necessary in consequence of them not being in accordance with clause 8, with no extension of time or addition to the Contract Sum.

(b)

(c)

(d)

26

8

Materials, goods, workmanship and work (Contd) Rectifying defects The Architect may instruct the Contractor to rectify defects which appear before the commencement of the Defects Liability Period. Dismissal from the Works The Architect may instruct the Contractor to dismiss any individual from the Works for incompetence, misconduct or other similar reasons. Intellectual property rights Intellectual property in design of the Works The Contractor shall pay the cost of any royalty, license fee or other sum legally demandable for the use of intellectual property in connection with the design of the permanent Works other than works under a Nominated Sub-Contract or materials and goods supplied under a Nominated Supply Contract, and the cost shall be added to the Contract Sum. Intellectual property in materials and goods The Contractor shall pay the cost of any royalty, license fee or other sum legally dernandable for the use of intellectual property in connection with the incorporation of materials and goods into the permanent Works other than materials and goods supplied under a Nominated Sub-Contract or a Nominated Supply Contract. The cost shall be added to the Contract Sum unless the Contractor was responsible for the selection of the materials and goods in accordance with a performance specification or otherwise in which case the cost shall be deemed to be included in the Contract Sum. Intellectual property in plant and equipment (1) The payment of all royalties, license fees or other sums legally demandable for the use of intellectual property in respect of plant, equipment, machinery, methods or anything whatsoever used in carrying out the Works shall be deemed to be included in the Contract Sum. (2) The Contractor shall indemnify the Employer from and against all claims, proceedings, damages, costs and expense arising from the Contractor or any subcontractor or supplier infringing or being held to have infringed any of the intellectual property rights referred to in clause 9.3(1).

8.4

8.5

9

9.1

9.2

9.3

9.4

Payment of royalties included in Valuation If the Contractor uses any intellectual property in compliance with an Architect's instruction requiring a Variation, any royalty, license fee or other sum legally chargeable which the Contractor pays in connection with that instruction shall be included in the Valuation of the Variation. Contractor's site management team Contractor's site management team (1) The Contractor shall maintain the site management and supervisory team (referred to in clause 10 as `the team') listed in clause 3.1(1)(c) on the Site for as long as is necessary for the satisfactory fulfilment of his obligations under the Contract.

10

10.1

27

10

Contractor's site management team (Cont'd) (2) The team shall be of sufficient strength with personnel of appropriate qualifications, seniority and experience, having regard to the size, complexity and nature of the Works, to properly organise, manage, plan, supervise and co-ordinate the carrying out of the Works.

10.2

Construction manager (1) The team shall be headed by an experienced and competent construction manager approved by the Architect. (2) An instruction issued by the Architect to the construction manager shall be deemed to have been issued to the Contractor. The Architect may instruct the Contractor to replace the construction manager or a member of the team for incompetence or misconduct. The Contractor shall not remove or replace the construction manager or any member of the team unless requested by or agreed to by the Architect.

(3)

(4) 11

Access for the Architect to the Works Contractor to give access The Contractor shall give the Architect and any person authorised by the Architect access, at all reasonable times, to the Works or any place where materials or goods are being manufactured or stored, work is being prepared or design is being carried out, and shall ensure that all his sub-contractors and suppliers do the same.

12

Architect's representative Architect's representative The Architect and/or the Employer may appoint an architect, engineer, clerk of works or other person as the Architect's representative to be resident on the Site and acting under the direction of the Architect. The Architect's representatives' duties shall be to: (a) (b) (c) watch and inspect the Works; inspect and test materials and goods; check that the types, standards and quality of the materials and goods, the standard and quality of the Contractor's workmanship and the quality of his work are in accordance with the requirements of the Contract; check, amend as necessary, and where appropriate sign the records submitted to him by the Contractor for approval; and carry out the duties and exercise the powers delegated to him by the Architect under clause 12.2,

12.1

(d)

(e)

28

12

Architect's representative (Cont'd) and the Contractor shall give the Architect's representative every reasonable facility for the performance of these duties.

12.2

Delegation of duties and powers (1) The Architect may, from time to time, delegate any of his duties and powers under the Contract to the Architect's representative as defined under clause 12.1. (2) The delegation shall be in writing and shall be copied to the Contractor. It shall specify the duties and powers that are delegated and remain in force until changed or terminated in writing by the Architect.

12.3

Instruction to bind parties (1) The Architect's representative shall issue all instructions in writing and an instruction from the Architect's representative shall bind the parties if: (a) the Architect has the power to give it; and (b) it is within the terms of the delegation. (2) The Contractor may, within 7 days of receiving an instruction from the Architect's representative, submit an objection to the Architect who shall confirm, reverse or vary that instruction within a further 7 days, failing which the instruction shall have no effect.

13

Variations, Provisional Quantities, Provisional Items and Provisional Sums Architect's authority to issue instructions requiring a Variation (1) The Architect may issue an instruction requiring a Variation provided that: (a) the Contractor has the right of reasonable objection to a Variation which imposes or changes an obligation or restriction on the Contractor regarding access to the Site, use of any part of the Site or limitation of working space or working hours and the Architect shall, upon receipt of the Contractor's objection, either confirm or withdraw the instruction, and if the instruction is confirmed, the Contractor may refer the matter to arbitration under clause 41; the Contractor's written consent is given to an instruction either nominating a subcontractor to carry out work included in the Contract Bills which is to be carried out by the Contractor or omitting work in order for it to be carried out by others; and the instruction or accumulation of instructions shall not fundamentally change the scope or nature of the Works.

13.1

(b)

(c)

(2)

The instruction requiring a Variation shall describe the change required to the design, quality or quantity of the Works or the imposition of or change to any obligation or restriction on the Contractor and where appropriate the Architect shall issue revised drawings and/or schedules.

29

13

Variations, Provisional Quantities, Provisional Items and Provisional Sums (Cont'd) (3) The Contractor has no right to carry out work involving a Variation without a written instruction from the Architect or confirmation of an oral instruction from, the Contractor except in the event of an emergency as provided for in Clause 4.4.

13.2

Instructions for Provisional Quantities, Provisional Items and Provisional Sums The Architect shall issue an instruction for: (a) the carrying out of work or the provision of goods covered by Provisional Quantities or Provisional Items in the Contract Bills, Nominated Sub-Contracts or Nominated Supply Contracts; and (b) the expenditure of Provisional Sums included in the Contract Bills, Nominated SubContracts or Nominated Supply Contracts.

13.3

Valuation of Contractor's work The Quantity Surveyor shall measure and value work carried out by the Contractor in response to an Architect's instruction under: (a) (b) clause 13.1 requiring a Variation; clause 13.2(a) for the remeasurement of Provisional Quantities and Provisional Items; and clause 13.2(b) to expend a Provisional Sum,

(c)

and the Valuation shall be made in accordance with the rules set out in clause 13.4. 13.4 Valuation rules (1) Where the Valuation relates to the carrying out of: (a) additional or substituted work which can be properly valued by measurement; (b) work which is the subject of Provisional Quantities or Provisional Items; or (c) work involved in the expenditure of Provisional Sums, the work shall be measured and shall be valued in accordance with the following rules: (i) where the work is the same as or similar in character to and is carried out under the same or similar conditions to work priced in the Contract Bills, and the Variation does not substantially change the quantity of that work, the rates in the Contract Bills for that work shall determine the Valuation; where the work is the same as or similar in character to work priced in the Contract Bills but is not carried out under the same or similar conditions, or the Variation substantially changes the quantity of that work, the rates in the Contract Bills for that work shall determine the Valuation but with a fair adjustment for the difference in conditions or quantity;

(ii)

30

13

Variations, Provisional Quantities, Provisional Items and Provisional Sums (Cont'd) (iii) (iv) where the work is not the same as or similar in character to any work priced in the Contract Bills the work shall be valued at fair rates; and the word conditions in clause 13.4(1) shall mean physical conditions and not financial conditions. Where the Valuation relates to work which cannot be properly measured and valued under clause 13.4(1) the work may, with the prior consent of the Architect, be carried out as daywork and provided that the Contractor: (a) gives at least 7 days' notice to the Architect before carrying out the work, or where the work is required urgently, as much prior notice as practicable; and submits vouchers specifying the time spent daily carrying out the work, the workmen's names, the materials and goods and the plant and equipment employed to the Architect for verification within 14 days of the work being carried out,

(2)

(b)

the work shall be valued at prime cost comprising labour, materials, goods, plant and equipment plus overheads and profit; and: (c) (d) priced at the daywork rates in the Contract Bills; or where there are no daywork rates in the Contract Bills, priced at: (i) the labour rates contained in the record of Average Daily Wages of Workers Engaged in Government Building and Construction Projects published by the Census and Statistics Department of the Government of the Hong Kong Special Administrative Region current at the date when the work is carried out; (ii) the net cost of materials and goods plus the cost of packing, carriage and delivery; (iii) the cost of hiring plant and equipment specifically provided for the work together with the cost of transportation, fuel, maintenance and insurance; and (iv) the percentages for overheads and profit on the prime cost of the labour, materials, goods, plant and equipment that are included in the Contract Bills or, where no such percentages are included in the Contract Bills, at 15 percent. (3) Where the Valuation relates to the omission of work included in the Contract Bills: (a) the rates for the work in the Contract Bills shall determine the Valuation of the work omitted; and if in the Quantity Surveyor's opinion the Contractor has reasonably incurred expense which has become wholly or partly unnecessary as a result of the omission of the work, a fair adjustment shall be made to the Valuation in respect of that expense.

(b)

31

13

Variations, Provisional Quantities, Provisional Items and Provisional Sums (Cont'd) (4) Where the Valuation does not relate to additional or substituted work or the omission of work but relates only to other matters not involving measured work such as the imposition of or change to an obligation or restriction and the rules in clauses 13.4(1), 13.4(2) or 13.4(3) cannot reasonably be applied, a fair valuation shall be made. An appropriate allowance shall be made in a Valuation under clause 13.4 for any percentage or lump sum adjustment made to the Contract Bills. If compliance with a Variation instructed under clause 13.1 or a deemed Variation under clause 14.3 substantially changes the conditions under which other work is carried out, and results in the rates in the Contract Bills for this work becoming unreasonable or inapplicable, then new rates shall be determined based upon the rates in the Contract Bills adjusted by a fair allowance for the difference in the conditions. In addition to the Valuation by daywork under clause 13,4(2) of work which cannot be properly measured and valued under clause 13.4(1), the Architect may instruct the Contractor, with the Contractor's agreement, to carry out any other work, including work which can be properly measured and valued under clause 13.4(1), to be valued on a daywork basis in accordance with clause 13.4(2). If the Architect instructs a Variation for additional work after Substantial Completion, clause 13.4(1) shall not apply and a fair valuation shall be made. No allowance is to be made under clause 13.4 for direct loss and/or expense due to delay to the progress of the Works, disruption, or-any other cause for which the Contractor can be reimbursed by payment under any other provision of the Conditions.

(5)

(6)

(7)

(8)

(9)

13.5

Adjustment of Contract Sum Effect shall be given to a Valuation under clause 13.3 by adjustment of the Contract Sum. Contractor's right to be present during measurement on Site Where it is necessary to measure work on the Site for a Valuation, the Quantity Surveyor shall give the Contractor an opportunity to be present and to take his own measurements. Variation necessitated by fault of Contractor If and to the extent that an instruction requiring a Variation arose as a result of a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible the Quantity Surveyor shall take the effect of the breach or default into account in the Valuation of the Variation. Valuation of Nominated Sub-Contractor's work or Nominated Supplier's materials and goods The Valuation of work carried out by a Nominated Sub-Contractor or materials and goods supplied by a Nominated Supplier in response to an Architect's instruction: (a) for a variation to the sub-contract works or to the materials and goods to be supplied under a supply contract;

13.6

13.7

13.8

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13

Variations, Provisional Quantities, Provisional Items and Provisional Sums (Cont'd) (b) under clause 13.2(a) for the remeasurement of Provisional Quantities and Provisional Items in any bills of quantities included in the sub-contract or supply contract; and under clause 13.2(b) to expend Provisional Sums included in the sub-contract or supply contract;

(c)

shall be made in accordance with the Nominated Sub-Contract or Nominated Supply Contract. 14 Contract Bills Quality and quantity of work included in Contract Sum The quality and quantity of the work included in the Contract Sum stated in Article 2 shall be deemed to be that which is set out in the Contract Bills which shall be read in conjunction with the Specification to amplify and supplement the descriptions in the Contract Bills. Standard Method of Measurement of Building Works (1) The Contract Bills, except where expressly stated to the contrary in those bills, have been prepared in accordance with the procedures set out in the Hong Kong Standard Method of Measurement of Building Works current at the time the Tender Documents were issued. (2) A departure from the Standard Method of Measurement of Building Works in measuring any work shall be specifically stated in the `preliminaries' or `preambles' sections of the Contract Bills and the same method as used to measure that work shall be used for the measurement of any similar work that may be required to be measured and valued under clause 13.

14.1

14.2

14.3

Errors in Contract Bills (1) An error in description or in quantity or the omission of an item from the Contract Bills shall not vitiate the Contract nor release the Contractor from any of his obligations or liabilities. (2) The error in quantity or omission referred to in clause 14.3(1) shall be corrected and shall, for the sole purpose of adjusting the Contract Sum, be deemed to be a Variation required by the Architect and valued in accordance with the Valuation rules under clause 13.4. An error in description of an item shall be corrected, and if in the Quantity Surveyor's opinion the rate for that item in the Contract Bills is no longer fair by reason of that correction, he shall fix a new rate that is fair to both parties.

(3)

33

15

Contract Sum Adjustment of Contract Sum (1) The Contract Sum stated in Article 2 shall only be adjusted in accordance with the Contract and as soon as the amount of the adjustment is calculated in whole or in part, the amount so calculated shall be taken into account in the next Interim Certificate following the calculation. (2) Subject to clause 14.3 the parties are deemed to have accepted any error whether of arithmetic or not in the calculation of the Contract Sum stated in Article 2.

16

Materials and goods on or off-site Property in materials and goods (1) Materials and goods delivered to or adjacent to the Site or stored off-site shall become the property of the Employer once their value has been included in an Interim Certificate and paid for by the Employer. (2) Materials and goods delivered to or adjacent to the Site shall not be removed without the consent of the Architect. If they have become the property of the Employer the Contractor shall remain responsible far loss or damage to them except to the extent that the loss or damage is due to an act or neglect of the Employer or any person for whom the Employer is responsible. The Contractor shall indemnify the Employer against loss or damage to materials and goads stored off-site that have become the property of the Employer, shall be responsible for the cost of their storage, handling and insurance and shall not remove them from where they are being stored except for use upon the Works.

(3)

17

Substantial Completion and defects liability Substantial Completion Certificate for the Works The Architect shall issue the Substantial Completion Certificate for the Works when he is satisfied that the Works have been substantially completed and have passed the inspections and tests that are required by the Contract to be carried out and completed before Substantial Completion and all unfinished items of work shall be completed as soon as practicable after the issue of the Substantial Completion Certificate, or as instructed by the Architect, and in any case before the expiry of the Defects Liability Period. Separate Defects Liability Period for each Section and Relevant Part (1) If sectional completion of the Works is provided for in the Contract or the Employer takes possession of a Relevant Part each Section or Relevant Part shall have its own separate Defects Liability Period. (2) The Architect shall issue a Substantial Completion Certificate upon Substantial Completion of each Section or Relevant Part except for the last one. Upon Substantial Completion of the last Section or Relevant Part the Architect shall issue the Substantial Completion Certificate for the Works and Substantial Completion of the whole of the Works shall be deemed to have taken place on the date stated in that certificate.

17.1

17.2

34

17

Substantial Completion and defects liability (Cont'd) (3) The requirements for the issue of a Substantial Completion Certificate under clause 17.2(2) shall be the same as those under clause 17.1.

17.3

Rectifying defects (1) The Contractor shall rectify all defects, shrinkages or other faults which are identified during the Defects Liability Period of the Works, a Section or a Relevant Part stated in the Appendix, and are caused either by materials, goods or workmanship which are not in accordance with the Contract, by natural causes or as a result of a Specified Peril occurring during the construction period prior to Substantial Completion. (2) The Architect shall fist the defects to be rectified in schedules of defects which he shall issue to the Contractor as Architect's instructions from time to time during the Defects Liability Period. The final schedule of defects shall be issued not later than 14 days after the expiry of the Defects Liability Period. The Contractor shall rectify the defects specified in the schedules of defects to the Architect's satisfaction within a reasonable time after receipt of those schedules. If the Contractor does not comply with the Architect's instruction to rectify the defects listed in a schedule of defects within a reasonable time the provisions of clauses 4.3(3) and 4.3(4) shall apply. The Architect may instruct the Contractor not to rectify some or all of the defects specified in the schedules of defects, in which case a reasonable reduction to the Contract Sum shall be made for the defects not rectified.

(3)

(4)

(5)

17.4

Defects Rectification Certificate for the Works The Architect shall issue the Defects Rectification Certificate for the Works when: (a) (b) the Defects Liability Period for the Works has expired; the Contractor has satisfactorily completed all the uncompleted items of work on the list issued with the Substantial Completion Certificate; and all defects required to be rectified under clause 17.3 have been satisfactorily rectified.

(c)

17.5

Separate certificate for each Section or Relevant Part (1) Where sectional completion of the Works is provided for in the Contract or the Employer takes possession of a Relevant Part, the Architect shall issue a separate Defects Rectification Certificate in accordance with clause 17.4 for each Section or Relevant Part except for the last Section or Relevant Part. (2) Upon the completion of rectifying defects to the last Section or Relevant Part in accordance with clause 17.4 the Architect shall issue a Defects Rectification Certificate for the Works and the completion of rectifying defects for the whole of the Works shall be deemed to have taken place on the date stated in the certificate.

35

17

Substantial Completion and defects liability (Cont'd) Damage by a Specified Peril The Contractor is not required to rectify at his own cost any damage caused by a Specified Peril occurring after Substantial Completion. Other rights and remedies The issue of a Defects Rectification Certificate for the whole of the Works shall discharge the Contractor from any further obligation to carry out the work of rectifying defects on the Site (except for the fulfilment of his obligations under a warranty) but it shall not prejudice the Employer's other rights and remedies under the Contract or at law regarding defective work or other breaches of contract. Partial possession by Employer Partial possession (1) The Employer may, with the Contractor's consent, take possession of a part of the Works or where sectional completion is provided for in the Contract a part of a Section before Substantial Completion, and that part of the Works or part of a Section shall be referred to as a Relevant Part. (2) If the Employer takes possession of a Relevant Part, the Architect shall issue a certificate to that effect: (a) (b) identifying the Relevant Part being taken into possession; giving the Relevant Date when the Employer took possession of the Relevant Part; and stating his assessment of the estimated amount contained in the Contract Sum in respect of the Relevant Part.

17.6

17.7

18

18.1

(c)

18.2

Substantial Completion Substantial Completion of the Relevant Part shall be deemed to have occurred on the Relevant Date and the following shall take effect: (a) the commencement of the Defects Liability Period for that Relevant Part and the rectification of defects under clause 17; the exemption from liability for damage by a Specified Peril under clause 17.6; and the release of one-half of the Retention relating to that Relevant Part under clause 32.5.

(b)

(c)

18.3

Completion of rectifying defects The Architect shall issue a Defects Rectification Certificate for the Relevant Part upon the completion of rectifying defects to that part under clause 17.5.

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18

Partia