A recent case confirms that a pay-when-paid clause is not a condition precedent to a subcontractor's right to be paid. Provided that the subcontractor has carried out its work satisfactorily under the terms of its subcontract, it is entitled to payment within a reasonable time of completion of the work, notwithstanding a pay-when-paid clause and the question of whether the main contractor has been paid.
A recent case involving two building contractors provides a reminder that the plaintiff has the burden of proving its allegations on the balance of probabilities. It also confirms the long-held view that the costs of preparing and submitting a tender are not generally recoverable unless the work performed has gone beyond the normal ambit of what was expected or would normally be done on a gratuitous basis.
Following a judgment by the Court of Final Appeal, the term 'practical completion' in Hong Kong building contracts is arguably a legal term of art which means a state of affairs in which the works have been completed free from patent defects other than those to be ignored as trifling. Employers and contractors should be aware that the court's interpretation sets a higher standard than is usually applied.
The Court of Appeal recently considered the true construction of a building contract where there were inconsistencies between the bills of quantities, special conditions and standard method of measurement. The case is a timely reminder of the importance of checking for inconsistencies between all contractual documents.
In a recent case a tenderer sued the Hong Kong government for breach of tender contract for failing to award it a construction contract. The plaintiff claimed that as it was the only one of five tenderers to comply with a special condition of the tender, it should have been awarded the contract. Alternatively, it alleged that the government had failed to comply with the Agreement on Government Procurement.
A recent Court of Appeal decision examined the duties owed by a registered structural engineer (RSE) to an employer. The court held that defective stone cladding did not constitute part of the structural works of a project and was therefore not the RSE's responsibility, despite the fact that the RSE had certified and forwarded drawings containing cladding details to the Building Authority.
In Sino Land Company Ltd v Hang Lung Group Ltd the Hong Kong Court of Appeal considered the term 'practical completion' in the context of construction contracts and confirmed the widely held view that it is not a term of art, but rather a matter of interpretation in each case.
A Court of Final Appeal decision on applications for leave to appeal will have a significant impact on the construction industry, given that most construction contracts not only are standard form contracts, but also contain arbitration clauses. When deciding whether to continue its widespread use of domestic arbitration, the industry will have to bear in mind this more lenient approach.
A recent Court of Final Appeal decision affirms that English law will still be followed when dealing with a claim for negligence in respect of latent defects. This is despite the freedom to now encourage the common law's growth in new directions, following the handover to China in 1997.
A landmark case sends an important message to owners of buildings in Hong Kong: Frequently monitor buildings for defects and, if discovered, commence legal action immediately.
A recent English case illustrates an important difference between Hong Kong and English construction law. In Hong Kong, if a claim is made against an architect in relation to a latent defect, the architect can claim contribution from a third-party contractor.
This article discusses a recent High Court case on the interpretation of bonds used in construction contracts and suggests that great care needs to be taken in drafting them to ensure that they achieve the desired effect.
Including: Origins; Effects of the Hand-Over; Future Developments;