Standard Form of Contract 2005 - With Quantities

347.
44 HKIAjWQ 2005 copy 2

2005 EDITION

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PAG~ PAG~
Articles of Agreement 5 5.5 Nominated Supply Contract
documents
Attestation 8 5.6 Further drawings, details,
descriptive schedules and similar
The General Conditions documents
5.7 Documents to be provided to
1 Interpretation and definitions 9 Contractor on time
5.8 Electronic copies of drawings
1.1 Governing law 5.9 Documents on Site
1.2 Singular, plural, masculine and 5.10 Return of drawings
feminine 5.11 Submission of manuals and
1.3 Method of reference to clauses and assignment of warranties
Articles 5.12 Submission of as-built drawings
1.4 Articles of Agreement, Conditions 5.13 Limits to use of documents
and Appendix to be read as a whole 5.14 Issue of Architect's certificates
1.5 Clauses divided into sub-clauses to 5.15 Copy of notice to be given
be read as a whole to Employer
1.6 Definitions
1.7 The role of the Engineer 6 Statutory obligations 24
1.8 Sectional completion of the Works
1.9 Communications 6.1 Statutory Requirements
1.10 Notices of default or determination 6.2 Compliance with the Statutory
to be sent by special delivery Requirements
1.11 Parties to act reasonably and 6.3 Fees or charges
expeditiously 6.4 Statutory undertakers and utility
companies
2 Contractor's obligations 16
7 Setting out the Works 25
2.1 Contractor's obligations
2.2 Contractor's responsibility Setting out and levels
2.3 Contractor's skill and care
2.4 Contractor to inform Architect if 8 Materials, goods, workmanship
he finds ambiguities in documents and work 25
3 Master programme 17 8.1 Types, standards and quality
8.2 Inspection and tests
3.1 Master programme to be submitted 8.3 Materials, goods, workmanship
3.2 Programmes to be updated or work not in accordance with
3.3 Programme and other documents Contract
not to be documents forming 8.4 Rectifying defects
the Contract 8.5 Dismissal from the Works
4 Architect's instructions 19 9 Intellectual property rights 27
4.1 Architect may issue instructions up to 9.1 Intellectual property in design of the
the issue of the Final Certificate Works
4.2 Architect to issue instructions in writing 9.2 Intellectual property in materials and
4.3 Compliance with Architect's goods
instructions 9.3 Intellectual property in plant and
4.4 Contractor to carry out preventative equipment
work 9.4 Payment of royalties included in
Valuation
5 Documents forming the Contract
and other documents 20 10 Contractor's site management team 27
5.1 The documents forming the Contract 10.1 Contractor's site management team
5.2 Architect and Quantity Surveyor to 10.2 Construction manager
keep documents available
5.3 Copies of documents for 11 Access for the Architect to the
Contractor Works 28
5.4 Nominated Sub-Contract
documents Contractor to give access 1

PAGE PAGE
12 Architect's representative 28 18.4 Liquidated and ascertained damages
18.5 Damage by a Special Peril
12.1 Architect's representative
12.2 Delegation of duties and powers 19 Assignment and sub-letting 37
12.3 Instruction to bind parties
19.1 Assignment
13 Variations, Provisional Quantities, 19.2 Sub-letting
Provisional Items and Provisional
Sums 29 20 Injury to persons and property and
indemnity to Employer 38
13.1 Architect's authority to issue
instructions requiring a Variation Contractor to indemnify Employer
13.2 Instructions for Provisional Quantities,
Provisional Items and Provisional 21 Insurance against injury to persons
Sums or property 39
13.3 Valuation of Contractor's work
13.4 Valuation rules 21.1 Employees' Compensation Insurance
13.5 Adjustment of Contract Sum 21.2 Third party liability insurance
13.6 Contractor's right to be present during 21.3 Insurers and terms to be approved
measurement on Site 21.4 Policies to be produced
13.7 Variation necessitated by fault of 21.5 Event of failure to insure
Contractor 21.6 No prejudice to Contractor'S indemnity
13.8 Valuation of Nominated Sub-
Contractor's work or Nominated 22 Insurance of the Works 40
Supplier's materials and goods
22.1 Alternative clauses for Contractors'
14 Contract Bills 33 All Risks Insurance of the Works
22.2 Basic requirements for Contractors'
14.1 Quality and quantity of work included All Risks Insurance of the Works
. in Contract Sum 22.3 Specific requirements for Contractors'
14.2 Standard Method of Measurement of All Risks Insurance of the Works
Building Works 22.4 Insurance of the Works to be in joint
14.3 Errors in Contract Bills names and period of insurances
22.5 Parties' obligations if loss or damage
15 Contract Sum 34 occurs
22.6 Contractor's payment not more than
Adjustment of Contract Sum insurance proceeds
22.7 Insurance without prejudice to
16 Materials and goods on or off-site 34 Contractor's obligations
Property in materials and goods 22A Insurance of the Works by the
Contractor 43
17 Substantial Completion and
defects liability 34 22A.1 Contractor to effect Contractors' All
Risks Insurance of the Works
17.1 Substantial Completion Certificate 22A.2 Insurer to be approved and remedy
for the Works if Contractor fails to insure
17.2 Separate Defects Liability Period for 22A.3 Use of annual policy maintained by
each Section and Relevant Part Contractor
17.3 Rectifying defects
17.4 Defects Rectification Certificate for 22B Insurance of the Works by the
the Works Employer 44
17.5 Separate certificate for each Section
or Relevant Part 228.1 Employer to effect Contractors'
17.6 Damage by a Specified Peril All Risks Insurance of the Works
17.7 Other rights and remedies 228.2 Remedy if Employer fails to insure
18 Partial possession by Employer 36 22C Insurance of existing building and
insurance of the Works by the
18.1 Partial possession Employer 44
18.2 Substantial Completion
18.3 Completion of rectifying defects 22C.1 Employer to effect insurance against
Specified Perils to the existing building
2 PAGE PAGE
22C.2 Employer to effect Contractors' 29 Nominated Sub-Contractors and
All Risks Insurance of the Works Nominated Suppliers 57
22C.3 Remedy if Employer fails to insure
29.1 Nomination of a sub-contractor or a
23 Possession, commencement and supplier
completion 45 29.2 Contractor's right of reasonable
objection
23.1 Possession of Site 29.3 Sub-contractor and supplier warranty
23.2 Commencement and completion to Employer
23.3 Postponement or suspension 29.4 Contractor's tender for work provided
for by a Prime Cost Sum
24 Damages for non-completion 45 29.5 Nomination using the standard
conditions
24.1 Architect to certify Contractor's failure 29.6 Contractor's responsibility for
to complete on time Nominated Sub-Contractors and
24.2 Liquidated and ascertained damages Nominated Suppliers
24.3 Refund if Completion Date revised 29.7 Quantity Surveyor's notification of
interim payments
25 Extension of time 46 29.8 Direct payment of Nominated Sub-
Contractors and Nominated Suppliers
25.1 Contractor's first notice of delay 29.9 Extension of time for completion
25.2 Contractor's second notice of Nominated Sub-Contract works or
25.3 Fixing new Completion Date delivery of Nominated Supply
25.4 Contractor's default involved in the Contract goods
delay 29.10 Substantial completion of Nominated
25.5 Rate of progress Sub-Contract works
25.6 Nominated Sub-Contractors and 29.11 Architect to certify Nominated Sub-
Suppliers to be kept informed Contractor's failure to complete on
time
26 Delay recovery measures 51 29.12 Early final payment to Nominated
Sub-Contractor or Nominated
26.1 Delay recovery measures Supplier
26.2 Delay recovery proposals 29.13 Re-nomination
26.3 Contractor to carry out delay recovery 29.14 Architect's consent
measures 29.15 Employer not liable to a Nominated
26.4 Extension of time to cover shortfall in SUb-Contractor or Nominated
recovering delay Supplier
26.5 Contractor to be reimbursed for the
cost of preparing the proposal if delay 30 Persons engaged by Employer 63
recovery not instructed
30.1 Persons for whom the Employer is
27 Direct loss and/or expense 53 responsible
30.2 Access to Site and permission to
27.1 Contractor's notice of claim for carry out work
additional payment 30.3 Contractor to fulfil his obligations to
27.2 Quantity Surveyor's ascertainment of persons engaged by the Employer
Contractor's claim
27.3 Contractor's default involved in the 31 Facilities for statutory undertakers
delay or disruption and utility companies 64
27.4 Nominated Sub-Contractor's claim
for additional payment Access to Site and facilities to carry
out work
28 Notice of claims for additional
payment 55 32 Certificates and payments 64
28.1 Contractor to give notice of claim 32.1 Interim Certificates and interim
28.2 Contractor to submit particulars valuations
28.3 Condition precedent to Contractor's 32.2 Estimate of amount due in Interim
entitlement to additional payment Certificate
32.3 Off-site materials or goods 3

-,

PAGE PAGE
32.4 Calculation of Retention 37.4 Quantity Surveyor to prepare final
32.5 Retention Rules account
32.6 Quantity Surveyor to prepare final 37.5 The final settlement
account 37.6 Architect to notify sub-contractors
32.7 Adjustment of the Contract Sum and suppliers
32.8 Issue of Final Certificate
32.9 Effect of Final Certificate 38 Fluctuations 84
32.10 Proceedings commenced before
Final Certificate 38.1 Fluctuation provisions only applicable
32.11 Proceedings commenced after Final if expressly stated to be
Certificate 38.2 Adjustment for fluctuations occurring
32.12 Effect of Architect's certificates after the Completion Date
32.1 3 Late payment
39 Notices, certificates and other
33 Surety Bond 73 communications 85
33.1 Contractor to obtain guarantee from Submission of notices, certificates and
insurance company or bank other communications
33.2 Release of insurance company or
bank 40 Recovery of money due to the
33.3 Employer's remedy if Contractor fails Employer 85
to deliver bond
Employer's power to recover damages
34 Antiquities 73 etc. "
34.1 Effect of finding antiquities 41 Settlement of disputes 85
34.2 Architect's instructions concerning a
fossil, antiquity or object 41.1 Procedures and Designated
Representatives
35 Determination by Employer 74 41.2 Reference to Designated
Representatives
35.1 Default by Contractor 41.3 Reference to mediation
35.2 Insolvency of Contractor ' 41.4 Reference to arbitration
35.3 Employer's rights upon notice of 41.5 Timing of arbitration
default or determination 41.6 Arbitrator's powers
35.4 Consequences of determination 41.7 The place of arbitration
35.5 Quantity Surveyor to prepare final 41.8 Contractor to continue to proceed
account diligently
35.6 The final settlement
35.7 Delayed commencement of Appendix 89
completion works Schedule 1 90
35.8 Other rights and remedies Form of Surety Bond to be given by
the Contractor to the Employer
36 Determination by Contractor 78
Schedule 2 94
36.1 Default by Employer Form of Warranty to be given by the
36.2 Insolvency of Employer Nominated Sub-Contractor to the
36.3 Consequences of determination Employer in consideration of
36.4 Contractor to submit final account Nomination
36.5 Quantity Surveyor to check final
account Schedule 3 97
36.6 The final settlement Form of Warranty to be given by the
36.7 Architect to notify sub-contractors Nominated Supplier to the Employer
and suppliers in consideration of Nomination
36.8 Other rights and remedies
Index to The General Conditions
37 Determination by Employer or
Contractor 82
37.1 Grounds for determination
37.2 Site security
37.3 Consequences of determination 4

Articles of Agreement

This 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

~ ••••••••• ~ ••••• " ••••••••••••••••••••••••••••••••••••• , •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• -1- .

•

(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 appoi ntm ent.

(3) 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.

(4) The Contractor shall have the right of objection under Article 5(2) to a further appointment of either the Architect or the Quantity Surveyor.

(5) 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.

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.

7

Attestation

* SIGNED AND SEALED as a deed I 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 I SIGNED by the Contractor

(signature of signatory for the Contractor)

(signature of witness)

(name and office held by signatory for the Contractor)

(name and occupation of witness)

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

*delete as applicable

8

The General Conditions

1 Interpretation and definitions

Governing law

1.1 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

1.2 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

1.3 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

1.4 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

1.5 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

1.6 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.

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 and/or 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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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 sub-contractor.

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.

11


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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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.

13


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) an alteration to the type, standard or quality of any of the materials or goods comprising the Works;

(ii) the addition, substitution or omission of work; and

(iii) 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) access to the Site or use of any parts of the Site;

(v) limitation of working space;

14


(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.

The role of the Engineer

1.7 (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.

(3) 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'.

Sectional completion of the Works

1.8 (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.

Communications

1.9 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

1.10 All notices of default or determination under clauses 35, 36 and 37 shall be sent by special delivery.

Parties to act reasonably and expedWously

1.11 (1) The parties, the Arch itect 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.

(2) 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.

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2 Contractor's obligations

Contractor's obligations

2.1 (1) The Contractor shall in compliance with the Contract

(a) organize, manage, plan and supervise the carrying out of the Works;

(b) 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 SubContractor, Specialist Contractor, statutory undertaker and utility company;

(c) 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;

(d) 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;

(e) carry out any work involved in the development of the Architect's desig'n that may

be specified in the Contract; ,

(f) prepare all shop drawings and co-ordination drawings required by the Contract;

(g) carry out the maintenance of mechanical and electrical equipment where required to do so by the Contract for the period of time so specified;

(h) take responsibility for the care of the Works, except for loss 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 for 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

(i) carry out the construction of and complete the Works using materials, goods and workmanship of the types, standards and quality specified in the Contract.

(2) 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.

Contractor's responsibility

2.2 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;

16

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.

Contractor's skill and care

2.3 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

2.4 (1) The Contractor shall immediately inform the Architect if the Contractor finds an ambiguity or discrepancy in or divergence between the following documents:

(a) the Contract Drawings;

(b) the Specification;

(c) the Contract Bills;

(d) the descriptive schedules and other similar documents referred to in clause 5.3(d);

(e) the Nominated Sub-Contract documents and the Nominated Supply Contract documents referred to in clauses 5.4 and 5.5; and

(f) 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) 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

3.1 (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;

(b) a method statement describing the methods of construction and the resources that he intends to use to carry out the Works;

(c) 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

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.

(2) The master programme shall:

(a) show the activities and the sequence in which the Contractor proposes to carry out the Works;

(b) show the periods of time estimated for each activity; and

(c) 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(1).

(3) The Contractor shall submit 6 copies of any other programme that may be required by the Contract at the time or times so specified.

(4) 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. •

Programmes to be updated

3.2 (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 SubContractor; 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.

(3) 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.

18

3 Master programme (Cont'd)

Programme and other documents not to be documents forming the Contract

3.3 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.

4 Architect's instructions

Architect may issue instructions up to the issue of the Final Certificate

4.1 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

4.2 (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.

Compliance with Architect's instructions

4.3 (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.

(3) 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.

19

... 1

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

4.4 (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

(b) immediately inform the Architect of the emergency and of the action taken or preventative work being carried out.

(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

5.1 (1) The documents forming the Contract shall be:

(a) the Articles of Agreement and the Appendix;

(b) 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;

(c) the Special Conditions if any;

(d) the Conditions; and

(e) the Contract Drawings, the Specification and the Contract Bills.

(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

(b) 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.

20

5 Documents forming the Contract and other documents (Cont'd)

Architect and Quantity Surveyor to keep documents available

5.2 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

5.3 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;

(b) 3 further copies of the Contract Drawings and the Specification;

(c) 3 copies of the unpriced bills of quantities; and

(d) 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.

Nominated Sub-Contract documents

5.4 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

5.5 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

5.6 (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.

21

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(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

5.7 (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).

Electronic copies of drawings

5.8 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

5.9 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) the Contract Drawings;

(b) the Specification;

(c) the unpriced bills of quantities;

(d) the programmes and other documents referred to in clause 3;

(e) 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;

(f) the Nominated Sub-Contract documents and Nominated Supply Contract documents referred to in clauses 5.4 and 5.5;

(g) 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

(h) all other documents that the Contractor is required to keep on Site in fulfilment of his statutory obligations.

Return of drawings

5.10 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


Submission of manuals and assignment of warranties

5.11 (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.

(3) 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.

Submission of as-built drawings

5.12 (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.

Limits to use of documents

5.13 (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.

Issue of Architect's certificates

5.14 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

5.15 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.

23

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6 Statutory obligations

Statutory Requirements

6.1 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

6.2 (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.

Fees or charges

6.3 (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;

(b) are priced, or are required to be allowed for, in the Contract Bills;

(c) are provided for by a Provisional Sum; or

(d) arise out of a default, delay or failure by the Contractor or a sub-contractor to comply with the Statutory Requirements or the Contract.

Statutory undertakers and utility companies

6.4 (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.

(3) 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.

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

8.1 (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.

(3) 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

(b) 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.

(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.

(5) The Contractor's workmanship must be of the standard and quality described in the Contract to the Architect's satisfaction.

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.

Inspection and tests

8.2 (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.

(3) The cost of the testing, the opening up for inspection and any consequential making good shall be added to the Contract Sum unless:

(a) the inspection or test is provided for in the Contract Bills;

(b) the inspection or test shows that the materials, goods, workmanship or work are not in accordance with clause 8;

(c) 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

(d) the work was carried out without the inspection notice required by the Contract.

Materials, goods, workmanship or work not in accordance with Contract

8.3 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;

(b) the repair or demolition, removal and reconstruction of work which, in respect of materials, goods or workmanship, is not in accordance with clause 8;

(c) 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

(d) 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.

26

8 Materials, goods, workmanship and work (Cont'd)

Rectifying defects

8.4 The Architect may instruct the Contractor to rectify defects which appear before the commencement of the Defects Liability Period.

Dismissal from the Works

8.5 The Architect may instruct the Contractor to dismiss any individual from the Works for incompetence, misconduct or other similar reasons.

9 Intellectual property rights

Intellectual property in design of the Works

9.1 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

9.2 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 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

9.3 (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).

Payment of royalties included in Valuation

9.4 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.

10 Contractor's site management team

Contractor's site management team

10.1 (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.

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.

Construction manager

10.2 (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.

(3) The Architect may instruct the Contractor to replace the construction manager or a member of the team for incompetence or misconduct.

(4) 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.

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

12.1 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) watch and inspect the Works;

(b) inspect and test materials and goods;

(c) 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;

(d) check, amend as necessary, and where appropriate sign the records submitted to him by the Contractor for approval; and

(e) carry out the duties and exercise the powers delegated to him by the Architect under clause 12.2,

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.

Delegation of duties and powers

12.2 (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.

Instruction to bind parties

12.3 (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

13.1 (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 ;

(b) 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

(c) the instruction or accumulation of instructions shall not fundamentally change the scope or nature of the Works.

(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.

Instructions for Provisional Quantities, Provisional Items and Provisional Sums 13.2 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.

Valuation of Contractor's work

13.3 The Quantity Surveyor shall measure and value work carried out by the Contractor in response to an Architect's instruction under:

(a) clause 13.1 requiring a Variation;

(b) clause 13.2(a) for the remeasurement of Provisional Quantities and Provisional Items; and

(c) clause 13.2(b) to expend a Provisional Sum,

and the Valuation shall be made in accordance with the rules set out in clause 13.4.

Valuation rules

13.4 (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;

(ii) 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;

30


(iii) 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

(iv) the word 'conditions' in clause 13.4(1) shall mean physical conditions and not financial conditions.

(2) 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

(b) 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,

the work shall be valued at prime cost comprising labour, materials, goods, plant and equipment plus overheads and profit; and:

(c) priced at the daywork rates in the Contract Bills; or

(d) 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

(b) 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.

31

--


(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.

(5) 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.

(6) 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.

(7) 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). ..

(8) 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.

(9) 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.

Adjustment of Contract Sum

13.5 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

13.6 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

13.7 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

13.8 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;

32


(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

(c) under clause 13.2(b) to expend Provisional Sums included in the sub-contract or supply contract;

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

14.1 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

14.2 (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.

Errors in Contract Bifls

14.3 (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.

(3) 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.

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 for 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.

(3) The Contractor shall indemnify the Employer against loss or damage to materials and goods 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.

17 Substantial Completion and defects liability

Substantial Completion Certificate for the Works

17.1 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

17.2 (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.

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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.

Rectifying defects

17.3 (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 list 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.

(3) 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.

(4) 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.

(5) 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.

Defects Rectification Certificate for the Works

17.4 The Architect shall issue the Defects Rectification Certificate for the Works when:

(a) the Defects Liability Period for the Works has expired;

(b) the Contractor has satisfactorily completed all the uncompleted items of work on the list issued with the Substantial Completion Certificate; and

(c) all defects req uired to be rectified under clause 17.3 have been satisfactorily rectified.

Separate certificate for each Section or Relevant Part

17.5 (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

17.6 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

17.7 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.

18 Partial possession by Employer

Partial possession

18.1 (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) identifying the Relevant Part being taken into possession;

(b) giving the Relevant Date when the Employer took possession of the Relevant Part; and

(c) stating his assessment of the estimated amount contained in the Contract Sum in respect of the Relevant Part.

Substantial Completion

18.2 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;

(b) the exemption from liability for damage by a Specified Peril under clause 17.6; and

(c) the release of one-half of the Retention relating to that Relevant Part under clause 32.5.

Completion of rectifying defects

18.3 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.

36

18 Partial possession by Employer (Cont'd)

Liquidated and ascertained damages

18.4 Where the Employer requires the Contractor to payor allow liquidated and ascertained damages under clause 24 for the Works or a Section and the Employer has taken possession of a Relevant Part under clause 18.1 then:

(a) where sectional completion is not contemplated under the Contract, the rate of liquidated and ascertained damages in respect of the Works shall be reduced, during the period when the Works remains incomplete after the Relevant Date, by the same proportion as the estimated amount contained in the Contract Sum for the Relevant Part bears to the Contract Sum; or

(b) where sectional completion is contemplated under the Contract, the rate of liquidated and ascertained damages in respect of the relevant Section shall be reduced, during the period when the Section remains incomplete after the Relevant Date by the same proportion as the estimated amount contained in the Contract Sum for the Relevant Part bears to the estimated amount contained in the Contract Sum for the Section.

Damage by a Specified Peril

18.5 The Contractor is not required to rectify at his own cost any damage to the Relevant Part caused by a Specified Peril occurring after the Relevant Date.

19 Assignment and sub-letting

Assignment

19.1 (1) Except where provided otherwise in clause 19.1, neither party shall, without the written consent of the other, assign or transfer any of his rights or obligations under the Contract.

(2) The Contractor must fulfil his organization, management, planning, supervision and co-ordination obligations through the site management and supervisory team referred to in clause 10 and he shall neither assign nor make arrangements for the vicarious performance of those functions.

(3) The Employer may assign or transfer the whole or any part of the benefit of the Contract after Substantial Completion of the Works, a Section or a Relevant Part without the Contractor's consent. Any assignment shall be notified promptly to the Contractor.

(4) Subject to giving prior notice to the Employer, the Contractor may assign the whole or any part of the benefit of the Contract for the purpose of obtaining financing for the carrying out of the Works provided that the assignment does not adversely affect the Contractor's fulfilment of his obligations under the Contract.

37

19 Assignment and sub-letting (Cont'd)

Sub-letting

19.2 The Contractor shall be permitted, unless prohibited by the Contract, to sub-let parts of the Works provided that:

(a) he does not sub-ret the whole of the Works or incrementally sub-let parts of the Works to the same person to indirectly attain sub-letting of the whole, or substantially the whole, of the Works and retains his management role as described in clause 19.1 (2) at all times;

(b) the terms of the agreement to sub-let are, so far as is reasonable, consistent with the terms of the Contract;

(c) he submits a plan of his sub-contracting arrangement giving the names of his key sub-contractors with their scope of works and such other particulars as may be required by the Architect;

(d) he does not sub-let any part of the Works to a sub-contractor against whom the Architect has made an objection giving his reasons;

(e) he removes from the Works any sub-contractor he is instructed by the Architect to remove; and

(f) the sub-letting of a part of the Works to a Domestic Sub-Contractor does not relieve the Contractor from any liability or obligation under the Contract and he remains responsible for carrying out and completing the Works in all respects in accordance with the Contract and for the acts, defaults, omissions and neglect of a Domestic Sub-Contractor as fully as if they were his own acts, defaults, omissions or neglect.

20 Injury to persons and property and indemnity to Employer

Contractor to indemnify Employer

The Contractor shall be liable for and shall indemnify the Employer against any damage, expense, liability or loss in respect of any claim or proceedings for:

(a) bodily injury to, disease contracted by or the death of any person arising out of, or in the course of, or by reason of the carrying out of the Works and whether arising on or off the Site, except to the extent that the injury, disease or death of that person is due to any act or neglect of the Employer or any person for whom the Employer is responsible; and

(b) injury or damage to real or personal property arising out of, or in the course of, or by reason of the carrying out of the Works and whether arising on or off the Site, to the extent that the injury or damage is due to a breach of contract or other default of the Contractor or any person for whom the Contractor is responsible.

38

21 Insurance against injury to persons or property

Employees' Compensation Insurance

21.1 (1) The Contractor shall effect and maintain employees' compensation insurance in compliance with the provisions of the Employees Compensation Ordinance in the joint names of the Contractor, his sub-contractors and their respective sub-contractors of all tiers against a!lliabilities arising in respect of bodily injury to, disease contracted by or death of the Contractor's or any sub-contractor's of all tiers employees arising out of and in the course of their employment on the Works or in connection with the Contract.

(2) The insurance cover shall be against the liabilities referred to in clause 21.1 (1) sustained during the period from the Commencement Date until the Defects Rectification Certificate for the whole of the Works has been issued and the Contractor has finally left the Site.

(3) As soon as the Contractor becomes aware of any workman or other person employed on the Works or in connection with the Contract suffering any bodily injury, contracting a disease or dying, he shall notify the Commissioner for Labour, with a copy of the notice to the Architect and the insurers.

Third party liability insurance

21.2 (1) The party responsible for effecting Contractors' All Risks Insurance of the Works under either clause 22A, 228 or 22C shall, unless otherwise stated in the Contract, effect insurances in the joint names of the Employer, the Contractor, his sub-contractors and their respective sub-contractors of all tiers against all liabilities of the insured under the Contract or otherwise in respect of:

(a) bodily injury to, disease contracted by or the death of any person arising out of or in the course of or by reason of the carrying out of the Works and whether arising on or off the Site; and

(b) injury or damage to real or personal property other than the Works insofar as the injury or damage arises out of, or in the course of, or by reason of the carrying out of the Works and whether arising on or off the Site, including injury or damage caused by any act or neglect of the Employer or any person for whom the Employer is responsible or by collapse, subsidence, heave, vibration, weakening or removal of support or lowering of ground water due to any cause other than:

(i) 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;

(ii) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds,

(iii) non-negotiable exclusions imposed by the insurance market.

39

21 Insurance against injury to persons or property (Cont'd)

(2) The insurance cover shall be against the liabilities referred to in clause 21.2(1) sustained during the period from the Commencement Date until the Defects Rectification Certificate for the whole of the Works has been issued and the Contractor has finally left the Site.

(3) The insurances shall include:

(a) a cross liability clause to the effect that the insurances shall cover the Employer, the Contractor, his sub-contractors and their sub-contractors of all tiers as separate insured, and

(b) a waiver of any right of subrogation which the insurers may have against any of the insured.

(4) The third party liability insurances against injury or death to any person and injury or damage to real or personal property under clause 21.2(1) shall each be effected with the limit of indemnity stated in the Appendix for anyone occurrence or series of occurrences arising out of one event but unlimited in the aggregate amount for the

period of the insurance. '.

Insurers and terms to be approved

21.3 (1) The insurances under clause 21 shall be placed with insurers acceptable to both parties and approved in writing by the party not responsible for effecting the insurances.

(2) The cover shall be in terms approved by the Architect but in any case cannot be beyond the best terms currently available.

t;

Policies to be produced

21.4 The party responsible for effecting the insurances under clause 21.2 shall provide evidence of cover to the other party prior to the Commencement Date and shall produce the policies of insurance and the premium receipts for inspection and approval by the other party as soon as practicable afterwards.

Event of failure to insure

21.5 If either party defaults in effecting or in maintaining the insurance cover required by clause 21, the other party may effect and maintain this insurance and the premium shall be recoverable from the defaulting party as a debt.

No prejudice to Contractor's indemnity

21.6 The effecting and maintaining of insurances by either the Employer or the Contractor under clause 21 is without prejudice to the Contractor's obligation to indemnify the Employer under clause 20.

22 Insurance of the Works

Alternative clauses for Contractors' All Risks Insurance of the Works

22.1 Either clause 22A, 228 or 22C shall apply according to which of those clauses is specified in the Appendix and both parties shall comply with all the conditions in the insurance policy effected by either party.

40

22 Insurance of the Works (Cont'd)

Basic requirements for Contractors' All Risks Insurance of the Works

22,2 The basic requirements for Contractors' All Risks Insurance of the Works are, unless otherwise set out in the Specification or Contract Bills or as agreed between the parties, to provide insurance cover against any physical loss of or damage to the Works, existing constructions on the Site, temporary works or materials or goods that are the property of the insured or for which the insured is responsible while on the Site, being fabricated or stored off-Site or in transit by road, rail, air or marine craft within Hong Kong or its territorial waters including:

(a) costs and expenses in respect of shoring and propping up, testing, dismantling or demolishing part of the Works, existing constructions on the Site or temporary works, removing and disposing of debris and damaged materials or goods and protecting the Works, existlnp constructions on the Site, temporary works and materials or goods;

(b) professional fees at the percentage stated in the Appendix;

(c) all necessary extra costs of express freight or airfreight; and

(d) all necessary extra overtime labour costs,

incurred in the repair, reinstatement, redesign and supervision following damage to the Works, existing constructions on the Site, temporary works or materials or goods from any cause excluding:

(e) the cost of repairing or replacing property which is defective solely due to natural wear and tear resulting from ordinary use or deterioration, rusting or corrosion;

(f) loss or destruction of or damage to cash, banknotes, treasury notes, cheques, stamps, deeds, bonds, bills of exchange, promissory notes or securities;

(g) loss or damage solely due to the total suspension of carrying out the Works where the insured failed to take reasonable precautions to protect the property insured and to avoid or reduce the amount of loss or damage;

(h) loss of any property by disappearance or by shortage where the loss is revealed only by the making of an inventory or periodic stocktaking and is not traceable to an identifiable event;

(i) loss or damage to materials, goods or work directly resulting from its own defect in materials, goods or workmanship or fault, defect, error or omission in design, plan or specification but not excluding resultant damage to any other materials, goods or work which are lost or damaged as a consequence of those defective materials, goods or work;

OJ loss or damage to property during the period between 14 days after Substantial Completion and the date of issue of the Defects Rectification Certificate other than loss or damage ariSing from a cause occurring prior to the commencement of that period, or caused in the course of remedying defects or the testing and commissioning of building services or other installations;

41

-~~ ~~~~~-~-~ -~.


(k) loss or damage to plant, equipment and temporary buildings and their contents owned or hired by the Contractor or any person for whom the Contractor is responsible;

(I) 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;

(m}pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds; and

(n) non-negotiable exclusions imposed by the insurance market.

Specific requirements for Contractors' All Risks Insurance of the Works

22.3 The specific terms and conditions required for the Contractors' All Risks Insurance of the Works if required to be different from the basic terms shall be as set out in the Specification or the Contract Bills or shall be as agreed between the parties but in any

case the terms cannot be beyond the best terms currently available. .

Insurance of the Works to be in joint names and period of insurances

22.4 (1) The Contractors' All Risks Insurance of the Works shall be effected and maintained in the joint names of the Employer, the Contractor, his sub-contractors and their respective sub-contractors of all tiers and suppliers. The insurance cover shall run from the Commencement Date until 14 days after the issue of the Substantial Completion Certificate for the Works or 14 days after the determination of the employment of the Contractor, whether valid or not, whichever is earlier.

(2) If the Contract provides for sectional completion of the Works or the Employer has taken possession of a Relevant Part, the obligation of the party responsible for effecting the Contractors' All Risks Insurance of the Works shall terminate in relation to any Section or Relevant Part 14 days after Substantial Completion of that Section or Relevant Part.

(3) The insurances shall include:

(a) notify the Architect of the extent, nature and location of the loss or damage immediately upon discovering it;

(a) a cross liability clause to the effect that the insurances shall cover the Employer, the Contractor, his sub-contractors and their sub-contractors of all tiers and suppliers as separate insured, and

(b) a waiver of any right of subrogation which the insurers may have against any of the insured.

Parties' obligations if loss or damage occurs

22.5 In the event of loss or damage to work, materials or goods caused by a peril covered by the Contractors' All Risks Insurance of the Works the Contractor shall:

42

.-1


(b) follow all of the requirements in the insurance policy, prepare and submit the insurance claim and negotiate with the insurers to achieve a fair settlement; and

(c) restore lost or damaged work, remove and dispose of any debris, repair or replace materials or goods which have been stolen, lost, destroyed or damaged, and proceed with carrying out the Works with due diligence and in accordance with the Contract immediately after any inspection required by the insurers has been carried out.

Contractor's payment not more than insurance proceeds

22.6 The Contractor shall not be entitled to any payment in respect of the replacement, repair or restoration of the loss or damage and the removal and disposal of debris other than the amount received under the Contractors' All Risks Insurance of the Works unless and to the extent that the loss or damage was caused or contributed to by a breach of contract or other default by the Employer or any person for whom the Employer is responsible.

Insurance without prejudice to Contractor's obligations

22.7 The effecting and maintaining of Contractors' All Risks Insurance of the Works by either party is without prejudice to the Contractor's obligation for the care of the Works under clause 2.1.

22A Insurance of the Works by the Contractor

Contractor to effect Contractors' All Risks Insurance of the Works

22A.1 The Contractor shall effect and maintain Contractors' All Risks Insurance of the Works for the full reinstatement value of the Works and all other costs set out in clauses 22.2 and 22.3.

Insurer to be approved and remedy if Contractor fails to insure

22A.2 (1) The Contractors' All Risks Insurance of the Works shall be effected with insurers approved by the Architect. The Contractor shall deposit with the Architect evidence of cover prior to the commencement of the Works and produce the premium receipt and any relevant endorsements as soon as practicable afterwards, followed by a copy of the insurance policy as soon as it becomes available.

(2) If the Contractor defaults in effecting or in maintaining the Contractors' All Risks Insurance of the Works, the Employer may effect and maintain it himself and recover the cost of the insurance premium from the Contractor in accordance with clause 40 or as a debt.

Use of annual policy maintained by Contractor

22A.3 (1) If the Contractor maintains an annual policy of insurance which provides cover no less than that required under clause 22A.1, an endorsement attached to the annual policy naming the Works, the Employer, the Contractor, his sub-contractors and their respective sub-contractors of all tiers and suppliers shall be a discharge of the Contractor's obligations under clause 22A.1.

43

22A Insurance of the Works by the Contractor (Co nt' d)

(2) The Contractor shall produce the annual policy of insurance, premium receipt and the endorsement for inspection by the Architect prior to the commencement of the Works and the annual premium receipt within 14 .days after each renewal date.

22B Insurance of the Works by the Employer

Employer to effect Contractors' All Risks Insurance of the Works

22B.1 The Employer shall effect and maintain Contractors' All Risks Insurance of the Works for the full reinstatement value of the Works and all other costs set out in clauses 22.2 and 22.3.

Remedy if Employer fails to insure

22B.2 (1) The Employer shall provide evidence to the Contractor that the Contractors' All Risks Insurance of the Works under clause 228.1 has been effected and is being maintained prior to the commencement of the Works and produce the premium receipt and any relevant endorsements as soon as practicable afterwards, followed by a copy of the insurance policy as soon as it becomes available.

(2) If the Employer defaults in effecting or in maintaining the Contractors' All Risks Insurance of the Works, the Contractor may effect and maintain it rumselt'ano the cost of the insurance premium shall be added to the Contract Sum.

22C Insurance of existing building and insurance of the Works by the Employer

Employer to effect insurance against Specified Perils to the existing building

22C.1 Where the Works are to be carried out to and/or within an existing building, the Employer shall effect and maintain a policy of insurance against the Specified Perils for the full cost of reinstatement, repair or replacement of loss or damage to that existlnq building which is to be extended or within which the Works are to be carried out together with its contents and all other costs set out in clauses 22.2 and 22.3. The insurance cover shall run from the Date for Possession of the Site stated in the Appendix until 14 days after the issue of the Substantial Completion Certificate for the Works or 14 days after the determination of the employment of the Contractor, whether valid or not, whichever is earlier.

Employer to effect Contractors' All Risks Insurance of the Works

22C.2 The Employer shall effect and maintain Contractors' All Risks Insurance of the Works for the full reinstatement value of the Works in and/or to the existing building and all other costs set out in clauses 22.2 and 22.3.

Remedy if Employer fails to insure

22C.3 (1) The Employer shall provide evidence to the Contractor that the insurances under clauses 22C.1 and 22C.2 have been effected and are being maintained prior to the commencement of the Works and produce the premium receipts and any relevant endorsements as soon as practicable afterwards, followed by a copy of each of the insurance policies as soon as they become available.

44

22C Insurance of existing building and insurance of the Works by the Employer (Cont'd)

(2) If the Employer defaults in effecting or in maintaining the insurances under clauses 22C.1 and/or 22C.2, the Contractor may effect and maintain them himself and the cost of the insurance premiums shall be added to the Contract Sum.

(3) The Contractor shall be given the right of entry and inspection to carry out a survey and make an inventory of the existing building and its contents if the clause 22C.1 insurance is to be effected and maintained by the Contractor under clause 22C.3(2).

23 Possession, commencement and completion

Possession of Site

23.1 (1) The Employer shall give possession of the Site to the Contractor on or before the Date for Possession of the Site stated in the Appendix.

(2) Where the Contract provides for the Employer to give possession of the Site to the Contractor in two or more parts on the dates stated in the Appendix, the Employer shall give possession of the Site to the Contractor in parts on or before those dates.

Commencement and completion

23.2 The Contractor shall commence the Works on the Commencement Date stated in the Appendix or when instructed to do so by the Architect, proceed regularly and diligently with the Works and complete the Works, and, where sectional completion is provided for in the Contract, any Section on or before the Completion Date of the Works or that Section stated in the Appendix.

Postponement or suspension

23.3 The Architect may issue instructions regarding:

(a) the postponement of the Date for Possession of the Site or a part of the Site;

{b} the postponement of the Commencement Date of the whole or a part of the Works; or

(c) the postponement or suspension of the whole or a part of the Works.

24 Damages for non-completion

Architect to certify Contractor's failure to complete on time

24.1 (1) If the Contractor fails to complete the Works or a Section by the Completion Date, the Architect shall issue a certificate to that effect confirming that all claims for extensions of time have been addressed in accordance with clause 25 and stating the date by which the Works or Section ought to have been completed.

(2) If a new Completion Date is fixed after the issue of the certificate referred to in clause 24.1 (1), the fixing of the new Completion Date shall cancel that certificate and the Architect shall, if appropriate, issue another certificate to correspond to the new Completion Date.

45

24 Damages for non-completion (Cont'd)

Liquidated and ascettained damages

24.2 (1) If the Architect issues a certificate under cfause 24.1 (1), the Contractor shall, if required to do so by a notice from the Employer, payor allow to the Employer liquidated and ascertained damages at the rate per day referred to in clause 24.2(3) for the period between the Completion Date and the Date of Substantial Completion.

(2) The Employer's notice under clause 24.2(1) shalf not be given either before the certificate under cfause 24.1 (1) is issued or after the Final Certificate is issued.

(3) The rate per day of liquidated and ascertained damages for the Works or a Section shall be as stated in the Appendix and adjusted in accordance with cfause 18.4 in regard to the completion of any Relevant Part.

(4) The Employer may recover the liquidated and ascertained damages from the Contractor under clause 40 or as a debt.

Refund if Completion Date revised

24.3 If the Architect fixes a later Completion Date under clause 25.3, the Employer shall refund to the Contractor the amount of liquidated and ascertained damages paid or allowed to the Employer under clause 24.2 for the period from the original Completion Date up to the later Completion Date plus interest at 1 % below the judgment debt rate prescribed from time to time by the Rules of the High Court (Chapter 4A, Laws of Hong Kong) within 28 days of the Architect fixing the later Completion Date.

25 Extension of time

Contractor's first notice of delay

25.1 (1) As soon as practicable but in any case within 28 days of the commencement of an event likely to cause delay to the completion of the Works or a Section beyond the Completion Date becoming apparent, the Contractor shall give notice (referred to in Clause 25 as the 'first notice') to the Architect.

(2) The first notice shall:

(a) state the likelihood and estimated length of the delay beyond the Completion Date;

(b) set out the material circumstances including the cause of the delay; and

(c) state if the Contractor considers that he is or may become entitled to an extension of time due to the effects of an event listed in clause 25.1 (3) (referred to in clause 25 as a 'listed event') and if so identify which of the listed events he believes to be the cause of the delay.

(3) The listed events are as follows:

(a) force majeure;

46

25 Extension of time (Cont'd)

(b) inclement weather conditions, being rainfall in excess of twenty millimetres in a twenty-four hour period (midnight to midnight) as recorded by the Hong Kong Observatory station nearest to the Site, and/or its consequences adversely affecting the progress of the Works;

(c) the hoisting of tropical cyclone warning signal NO.8 or above or the announcement of a Black Rainstorm Warning;

(d) the Excepted Risks;

(e) loss or damage caused by a Specified Peril;

(f) an Architect's instruction under clause 2.4 to resolve an ambiguity, discrepancy in or divergence between the documents listed in that clause;

(g) an Architect's instruction under clause 8.2 requiring the opening up for inspection of work covered up or the testing of materials, goods or work and the consequential making good where the cost of that opening up, testing and making good is required by that clause to be added to the Contract Sum;

(h) an Architect's instruction under clause 13.1 requiring a Variation;

(i) an Architect's instruction under clause 13.2 resulting in an increase in the work to be carried out of sufficient magnitude to cause delay, provided that the variance was not apparent from the Contract Drawings;

0) an Architect's instruction under clause 23.3 regarding:

(i) the postponement of the Date for Possession of the Site or part of the Site;

(ii) the postponement of the Commencement Date of the whole or a part of the Works; or

(iii) the postponement or suspension of the whole or a part of the Works, unless:

• notice of the postponement or suspension is given in the Contract; or

• the postponement or suspension was caused by a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible;

(k) compliance with clause 34.1 or with an Architect's instruction under clause 34.2 requiring the Contractor to permit the examination, excavation or removal by a third party of an object of antiquity found on the Site;

(I) late instructions from the Architect, including those to expend a Prime Cost Sum or a Provisional Sum, or the late issue of the drawings, details, descriptive schedules or other similar documents referred to in clause 5.6 except to the extent that the Contractor failed to comply with clause 5.7(2);

47

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(m) delay caused by a delay on the part of a Nominated Sub-Contractor or Nominated Supplier in respect of an event for which the Nominated Sub-Contractor or Nominated Supplier is entitled to an extension of time under the sub-contract or supply contract;

(n) delay caused by a sub-contractor or supplier nominated by the Architect under clause 29.2(6} despite the Contractor's valid objection, subject to clause 29.2(7);

(0) delay caused by the nomination of a replacement Nominated Sub-Contractor or Nominated Supplier under clause 29.13 including any prolongation of the period of the relevant sub-contract or the time for the supply and delivery of materials and goods, provided that the determination of the employment of the original Nominated Sub-Contractor or the termination of the original Nominated Supply Contract was not in the opinion of the Architect a consequence of a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible;

(p) delay caused by a Specialist Contractor;

(q) delay caused by a statutory undertaker or utility company referred to in clause 6.4(1) failing to commence or to carry out its work in due time provided that the Contractor has taken all practicable measures to cause it to commence and to carry out and complete its work on time;

(r) the failure of the Employer to supply or supply on time materials, goods, plant or equipment that he agreed to provide for the Works;

(s) the failure of the Employer to give possession of the Site or, under clause 23.1 (2), a part of the Site on the Date for Possession of the Site or the part of the Site stated in the Appendix, or the Employer subsequently depriving the Contractor of the whole or a part of the Site;

(t) delay to the Works due to time not reasonably foreseen by the Contractor in obtaining approval or consent from a Government department;

(u) a special circumstance considered by the Architect as sufficient grounds to fairly entitle the Contractor to an extension of time; and

(v) an act of prevention, a breach of contract or other default by the Employer or any person for whom the Employer is responsible.

(4) The Contractor shall:

(a) continuously use his best endeavours to prevent or mitigate delay to the proqress of the Works, however caused, and to prevent the completion of the Works being delayed or further delayed beyond the Completion Date, provided that the words 'best endeavours' shall not be construed to mean that the Contractor is obliged tc spend additional money, without reimbursement under clause 26, to acceleratE the carrying out of the Works to recover delay that the Contractor did not cause and

48

1


(b) do all that may reasonably be required to the Architect's satisfaction to proceed with the Works.

(b) particulars of the cause, effect and length of the delay to the completion of the Works or a Section beyond the Completion Date in sufficient detail to enable the Architect to make a decision under clause 25.3(1).

(2) Where the delay envisaged by the Contractor's first notice of delay commences later than 28 days after the Contractor has given the first notice to the Architect, the Contractor shall give the Architect a statement to this effect and shall submit the second notice within 28 days of the commencement of the delay.

(3) Where the listed event has a continuing effect the Contractor shall:

(a) give the Architect a statement to that effect together with:

(i) substantiation that the listed event is the cause of the delay; and

(ii) interim particulars including details of the cause and effect and an estimate of the length of the delay to the completion of the Works or a Section beyond the Completion Date;

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(b) make further submissions to the Architect at intervals not exceeding 28 days giving further interim particulars and estimates of the length of the delay until the delay ceases;

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(c) within 14 days after the delay ceasing, submit to the Architect final particulars of the cause, effect and length of the delay to the Works or a Section beyond the Completion Date in sufficient detail to enable the Architect to make a decision under clause 25.3(1).

Fixing new Completion Date

25.3 (1) After receipt of the Contractor's second notice the Architect shall give an extension of time to the Contractor by fixing a later Completion Date if he is satisfied that the completion of the Works or a Section is being or is likely to be delayed beyond the Completion Date by the listed event stated by the Contractor in his first and second notices to be the cause of the delay.

(2) The Architect shall give the extension of time, and the reasons for his decision as soon as practicable but in any case within 60 days after the receipt of the particulars submitted with the second notice under clause 25.2.

49


(3) If, after receiving the first and second notices, the Architect decides not to fix a later date as a new Completion Date:

(a) the Architect shall notify the Contractor of this, giving the reasons for his decision, as soon as practicable but in any case within 60 days of receipt of the particulars submitted with the second notice under clause 25.2; and

(b) the Architect may revise his decision and fix a later date as the new Completion Date if the Contractor provides further and better particulars within 28 days of the Architect's notification under clause 25.3(3)(a).

(4) If the Contractor fails to submit the notices within the time frame prescribed under clause 25.1 or clause 25.2 but a first notice is nevertheless submitted, the Architect shall, if he is satisfied that the completion of the Works or a Section has been delayed by the listed event stated in the Contractor's first notice, give an extension of time to the Contractor under clause 25.3 to the extent that he is able to on the information available.

(5) If after fixing a new Completion Date under clause 25.3, the Architect issues an instruction under:

(a) clause 13.1 for the omission of work or the omission or diminution of an obligation; or

(b) clause 13.2 resulting in a substantial reduction of the work to be carried out, provided that the variance was not apparent from the Contract Drawings,

the Architect may fix an earlier Completion Date, though not earlier than the Completion Date stated in the Appendix, if it is fair and reasonable to do so.

(6) If the Architect gives an extension of time to the Contractor under clause 25.3 because of a listed event that occurs in the period of delay after the Completion Date but before the Date of Substantial Completion, he shall add this extension of time to the total of any extensions of time previously granted when fixing a new Completion Date, even though the listed event may have occurred later than the date that the Architect fixes as the new Completion Date.

(7) The Architect may fix a new Completion Date under clause 25 earlier or later than that previously fixed, during the period of delay between the Completion Date and the Date of Substantial Completion (if Substantial Completion takes place later than the Completion Date) if it is fair and reasonable to do so having regard to any of the listed events, whether by reviewing a previous decision, taking into account any further and better particulars that may be submitted by the Contractor, or by taking into account any extension of time granted under clause 25.3(6).

50

(8) The Architect shall finally decide the overall extension of time, if any, that he considers the Contractor is entitled to under clause 25, whether by reviewing any extension of time previously granted or otherwise, and shall fix the Completion Date, which may be the same as but not earlier than the Completion Date previously fixed, within 90 days after Substantial Completion or such later date as may be agreed by the parties.


25.4

Contractor's default involved in the delay

Where and to the extent that a listed event resulting in delay to the completion of the Works or a Section beyond the Completion Date was, in the Architect's opinion, contributed to, or aggravated by a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible, the Architect shall take the effects of that contribution or aggravation into account in fixing the new Completion Date.

25.5

Rate of progress

(1) If, in the Architect's opinion, the rate of progress of the Works is, at any time, too slow to ensure that the Works will be completed by the Completion Date for any reason which does not entitle the Contractor to an extension of time under clause 25.3, the Architect may notify the Contractor accordingly.

(2) After receiving the Architect's notification the Contractor may, at his own discretion and with no entitlement to receive additional payment, take the measures that he considers necessary to expedite the progress to complete the Works by the Completion Date.

Nominated Sub-Contractors and Suppliers to be kept informed

25.6 (1) Where the first notice includes a reference to work carried out by a Nominated Sub-Contractor or materials or goods supplied by a Nominated Supplier, the Contractor shall give a copy of the first and second notices to the Nominated Sub-Contractor or Nominated Supplier.

(2) The Architect shall notify each Nominated Sub-Contractor and Nominated Supplier of any new Completion Date fixed under clause 25.3.

26 Delay recovery measures

Delay recovery measures

26.1 Where the Architect considers that the Contractor would, by carrying out delay recovery measures (referred to in clause 26 as 'the measures'), be able to extinguish, or significantly reduce, any extension of time which the Contractor would otherwise be entitled to under clause 25, the Architect shall, after receiving written directions from the Employer, state the saving in time that he wants the Contractor to achieve and instruct the Contractor to submit within 14 days:

(a) a description of the proposed measures necessary to achieve the saving required by the Architect and a detailed quotation for carrying out those measures with full supporting particulars;

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r

,.

51

26 Delay recovery measures (Cont'd)

(b) the Contractor's own estimate of the saving in time that could be achieved by carrying out the measures if the Contractor has reservations about achieving the saving in time requested by the Architect; and

(c) details of any other terms and conditions required by the Contractor in consideration for agreeing to carry out the measures.

Delay recovery proposals

26.2 (1) The description of the proposed measures, the quotation, the Contractor's own estimate of the saving in time that could be achieved, if appropriate, and the details of the other terms and conditions referred to in clause 26.1 shall be referred to in clause 26 as the 'delay recovery proposals'.

(2) Within 14 days of receiving the delay recovery proposals, the Architect shall notify the Contractor in writing that either the delay recovery proposals are agreed, or disagreed, or that he wishes to discuss and agree revised proposals with the Contractor.

Contractor to carry out delay recovery measures

26.3 (1) If the Architect agrees with the Contractor's delay recovery proposals, o'r the revised delay recovery proposals resulting from the discussions under clause 26.2(2), and, after receiving written directions from the Employer, instructs the Contractor to carry out the measures in accordance with the agreement, the Contractor shall carry out the measures in accordance with the Architect's instructions and shall be paid for carrying them out in accordance with the terms of the agreement.

(2) If the Architect and the Contractor cannot reach agreement on the Contractor's delay recovery proposals within 14 days of the Architect's notice to discuss them under clause 26.2(2), the Architect may, after receiving written directions from the Employer, instruct the Contractor to carry out the measures in the absence of an agreement and the Contractor shall do so in accordance with the Architect's instruction and:

(a) the Contractor shall prepare and submit to the Quantity Surveyor all the information and documents relating to the cost of carrying out the measures that the Quantity Surveyor may reasonably require; and

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(b) the Quantity Surveyor shall ascertain the amount of additional payment to be made to the Contractor for carrying out the measures, based on the extra cost incurred by the Contractor with the addition of 15 percent for overheads and profit, within a reasonable time after receiving the information and documents under clause 26.3(2)(a).

Extension of time to cover shortfall in recovering delay

26.4 If by carrying out the measures the Contractor reduces, but does not completely extinguish the delay to the completion of the Works or any Section for which the Contractor would have been entitled to an extension of time under clause 25 in the absence of the delay recovery proposals, then, subject to the terms of the agreement between the Architect and the Contractor under clause 26, the Contractor shall, nevertheless, be granted an extension of time for the duration of the unextinguished delay.

52

26 Delay recovery measures (Cont'd)

Contractor to be reimbursed for the cost of preparing the proposal if delay recovery not instructed

26.5 (1) If the Architect and the Contractor do not reach an agreement about the terms of the Contractor's delay recovery proposals and the Architect does not instruct the Contractor to carry out these proposals, then the Contractor shall be reimbursed for the cost of preparing the proposals.

(2) The Contractor shall submit to the Quantity Surveyor a statement of his costs with full supporting details and the Quantity Surveyor shall ascertain the amount of additional payment to be made as reimbursement to the Contractor.

27 Direct loss and/or expense

Contractor's notice of claim for additional payment

27.1 (1) If, in the Contractor's opinion, he has incurred or is likely to incur direct loss and/or expense because the progress of the Works has been or is likely to be delayed or disrupted by an event set out in clause 27.1 (referred to in clause 27 as a 'qualifying event') and the Contractor intends to claim additional payment for this, he shall follow the procedures set out in clause 28 and shall also identify in his notice of claim which of the qualifying events he believes to be the cause of the direct loss and/or expense:

(2) The qualifying events are as follows:

(a) an Architect's instruction under clause 2.4 to resolve an ambiguity, discrepancy in or divergence between the documents listed in that clause;

(b) an Architect's instruction under clause 8.2 requiring the opening up for inspection of work covered up or the testing of materials, goods or work and the consequential making good where the cost of such opening up, testing and making good is required by that clause to be added to the Contract Sum;

(c) an Architect's instruction under clause 13.1 requiring a Variation;

(d) an Architect's instruction under clause 13.2 resulting in an increase in the work to be carried out of sufficient magnitude to cause delay or disruption, provided that the variance was not apparent from the Contract Drawings;

(e) an Architect's instruction under clause 23.3 regarding:

(i) the postponement of the Date for Possession of the Site or a part of the Site;

(ii) the postponement of the Commencement Date of the whole or a part of the Works; or

(iii) the postponement or suspension of the whole or a part of the Works, unless:

• notice of the postponement or suspension is given in the Contract; or

53

27 Direct loss and/or expense (Cont'd)

• the postponement or suspension was caused by a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible;

(f) compliance with clause 34.1 or with an Architect's instruction under clause 34.2 requiring the Contractor to permit the examination, excavation or removal by a third party of an object of antiquity found on the Site;

(g) late instructions from the Architect, including those to expend a Prime Cost Sum or a Provisional Sum, or the late issue of the drawings, details, descriptive schedules or other similar documents referred to in clause 5.6, except to the extent that the Contractor failed to comply with clause 5.7(2);

(h) delay or disruption caused by a sub-contractor or supplier nominated by the Architect under clause 29.2(6) despite the Contractor's valid objection, subject to clause 29.2(7);

(I) delay or disruption caused by a Specialist Contractor;

U) the failure of the Employer to supply or supply on time materials, g~ods, plant or equipment that he agreed to provide for the Works;

(k) the failure of the Employer to give possession of the Site or, under clause 23.1 (2), a part of the Site on the Date for Possession of the Site or the part of the Site stated in the Appendix, or subsequently the Employer depriving the Contractor of the whole or a part of the Site; and

(I) any other delay or disruption for which the Employer is responsible including an act of prevention or a breach of contract.

Quantity Surveyor's ascertainment of Contractor's cfaim

27.2 (1) Upon receipt of the Contractor's claim under clause 27, the Architect shall instruct the Quantity Surveyor to ascertain the amount of any additional payment for direct loss and/or expense incurred by the Contractor if the Architect is satisfied that:

(a) the direct loss and/or expense was incurred because the progress of the Works was delayed or disrupted by the qualifying event set out in the Contractor's claim;

(b) the Contractor has not been and will not be reimbursed by a payment under any other provisions of the Contract; and

(c) the Contractor has complied with clause 28.

(2) The ascertainment of the Contractor's claim shall be made as soon as practicable but in any case within 60 days of receipt of the build-up of the claim and the particulars submitted under clause 28.2(2)(a) to (d) or clause 28.2(4)(c), as the case may be.

54

27 Direct loss and/or expense (Cont'd)

Contractor's default involved in the delay or disruption

27.3 Where and to the extent that a qualifying event resulting in delay to the progress of the Works or disruption was, in the Architect's opinion, contributed to or aggravated by a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible, the Architect shall instruct the Quantity Surveyor to take such contribution or aggravation into account in ascertaining the amount of direct loss and/or expense due to the Contractor.

Nominated Sub-Contractor's claim for additional payment

27.4 (1) The Contractor shall give the Architect a copy of a claim from a Nominated SubContractor for additional payment for direct loss and/or expense under the Nominated Sub-Contract.

(2) The Architect shall instruct the Quantity Surveyor to ascertain, in accordance with the Nominated Sub-Contract, the amount of any additional payment for direct loss and/or expense incurred by the Nominated Sub-Contractor if the Architect is satisfied that:

(a) the direct loss and/or expense was incurred because the progress of the Nominated Sub-Contract works was delayed or disrupted by the event, being an event that qualified the Nominated Sub-Contractor for direct loss and/or expense under the sub-contract, set out in the Nominated Sub-Contractor's claim; and

(b) the Nominated Sub-Contractor has complied with all of the requirements of the Nominated Sub-Contract in respect of his claim.

(3) The ascertainment of the Nominated Sub-Contractor's claim shall be made as soon as practicable but in any case within 60 days of the Nominated Sub-Contractor providing, through the Contractor, the submissions required by the Nominated SubContract relating to the claim for additional payment for direct loss and/or expense. The amount ascertained shall be added to the sub-contract sum.

(4) An amount of additional payment for direct loss and/or expense incurred by the Nominated Sub-Contractor due to an act, omission or default of the Contractor shall be dealt with between the Contractor and the Nominated Sub-Contractor and shall not be added to the sub-contract sum.

28 Notice of claims for additional payment

Contractor to give notice of claim

28.1 (1) If the Contractor intends to claim any additional payment under the Contract, the Contractor shall give notice to the Architect of his intention to do so:

(a) within 28 days of it becoming apparent to the Contractor that an event has occurred which gives rise to a claim and he shall include in the notice the contractual provisions upon which the claim is based; or whether earlier or later

(b) within 7 days after receipt of a claim for additional payment from a Nominated Sub-Contractor under clause 27.4.

55

28 Notice of claims for additional payment (Cont'd)

(2) The Contractor need not give the notice required under clause 28.1 (1) in the case of an Architect's instruction under clauses 13.1 or 13.2 insofar as that instruction is subject to a Valuation under clause 13.

Contractor to submit particulars

28.2 (1) The Contractor shall keep such records as may reasonably be necessary to support the claim.

(2) The Contractor shall as soon as practicable but in any case within 60 days of giving notice under clause 28.1, submit to the Architect:

(a) particulars of the circumstances giving rise to the claim;

(b) the amount of the claim;

(c) a detailed build-up of that amount; and

(d) a copy of the records kept in accordance with clause 28.2(1).

(3) Where the effect of the event giving rise to the claim set out in the Contractor's notice of claim commences later than 60 days after the Contractor has given notice of his intention to claim, the Contractor shall give the Architect a statement to that effect and submit the information under clause 28.2(2) within 60 days of the commencement of the effect of the event giving rise to the claim.

(4) Where the event giving rise to the claim has a continuing effect the Contractor shall:

(a) give the Architect a statement to that effect together with:

(i) interim particulars of the circumstances giving rise to the claim;

(ii) an estimate of and build-up of the amount of the claim which shall be considered to be an interim amount; and

(iii) a copy of the records kept in accordance with clause 28.2(1);

(b) make further submissions to the Architect at intervals not exceeding 28 days giving:

(i) further interim particulars;

(ii) up to date estimates of the amounts of the claim with further build-ups of these amounts; and

(iii) further records to support the claim,

until it becomes possible to ascertain the total claim; and

(c) within 14 days after it becomes possible to ascertain the total claim, make the final submission to the Architect as required under clause 28.2(2) paragraphs (a) to (d).

56

28 Notice of claims for additional payment (Cont'd)

Condition precedent to Contractor's entitlement to additional payment

28.3 It shall be a condition precedent to the Contractor's entitlement to additional payment that the Contractor shall comply with the provisions of clauses 28.1 and 28.2 and if he fails to comply with these provisions in respect of any claim, that claim will be deemed to have been waived by the Contractor.

29 Nominated Sub-Contractors and Nominated Suppliers

Nomination of a sub-contractor or a supplier

29.1 (1) Where a Prime Cost Sum for work to be carried out by a Nominated Sub-Contractor or for materials and goods to be supplied by a Nominated Supplier is included in the Contract 8ills or arises as a result of:

(a) an Architect's instruction under clause 13.1 requiring a Variation for additional or substituted work;

(b) an Architect's instruction under clause 13.2 to expend a Provisional Sum; or

(c) an agreement between the Contractor and the Architect on behalf of the Employer,

the Architect shall issue an instruction to nominate:

(d) a sub-contractor to carry out the work provided for by the Prime Cost Sum and the Contractor shall enter into a sub-contract with that sub-contractor, who shall then become a Nominated Sub-Contractor, in accordance with the terms stipulated in the instruction; or

(e) a supplier to supply the materials or goods provided for by the Prime Cost Sum and the Contractor shall enter into a supply contract with that supplier, who shall then become a Nominated Supplier, in accordance with the terms stipulated in the instruction.

(2) The term 'Nominated Supplier' shall not apply to a supplier of materials or goods which are specified in the Contract Bills to be incorporated into the Works unless the materials or goods are the subject of a Prime Cost Sum even if that supplier is the sole supplier of those materials or goods.

Contractor's right of reasonable objection

29.2 (1) The Contractor shall not be required to enter into a sub-contract with a subcontractor or supply contract with a supplier against whom the Contractor has made a reasonable objection because:

(a) the sub-contractor or supplier has a poor safety record;

(b) there are reasonable grounds for believing that the financial standing, solvency, technical competence or reliability of that sub-contractor or supplier is not such that a prudent contractor, having regard to the size and nature of the sub-contract works or supply contract, would be willing to employ as a Nominated SubContractor or Nominated Supplier;

57

29 Nominated Sub-Contractors and Nominated Suppliers (Cont'd)

(c) there are reasonable grounds for believing that the tender sum is not financially viable; or

(d) the programme for carrying out the sub-contract works or for the delivery of the materials and goods is unreasonable.

(2) Where the Contractor is notified of the tender list of sub-contractors and suppliers during the tender period, the Contractor shall, if he has an objection to a sub-contractor or supplier on the list, register his objection giving his reasons with his tender submission.

(3) Where the Contractor is notified of the tender list of sub-contractors and suppliers after the award of the Contract, the Contractor shall, if he has an objection to a subcontractor or supplier on the list, register his objection giving his reasons within 14 days of being notified of the list of tenderers or, if a sub-contractor or supplier who is not on this list is nominated, within 14 days of receipt of the nomination instruction.

(4) If the Contractor made his objection to the inclusion of a sub-contractor or supplier on the tender list in his tender submission or within the time required under clause 29.2(3) and the Architect considers the objection to be valid, the Archite~t shall either:

(a) withdraw the sub-contractor's or supplier's name from the tender list; or

(b) refuse to withdraw the sub-contractor's or supplier's name from the tender list and notify the Contractor accordingly.

(5) If the Contractor made his objection to the nomination of the sub-contractor or supplier within the time required under clause 29.2(3), and the Architect considers the objection to be valid, the Architect shall either:

(a) withdraw the nomination instruction and:

(i) issue a further instruction nominating another sub-contractor or supplier; or

(il) instruct the Contractor to carry out the work himself or supply the materials or goods himself through a supplier approved by the Architect in which case the instruction shall have the same effect as an instruction to expend a Provisional Sum under clause 13.2; or

(b) refuse to withdraw the nomination instruction and notify the Contractor accordingly.

(6) Where the Architect, notwithstanding his acceptance of the validity of the Contractor's objection, either refuses to withdraw the sub-contractor's or supplier's name from the tender list and subsequently nominates that sub-contractor or supplier, or refuses to withdraw the nomination instruction, the Contractor shall enter into a subcontract with that sub-contractor or a supply contract with that supplier.

58


(7) If during the carrying out of the sub-contract or the supply contract, the Contractor believes that the sub-contractor or supplier nominated under clause 29.2(6) has caused delay or disruption to the carrying out of the Works, he may apply for an extension of time under clause 25.1 (3)(n) and/or additional payment for direct loss and/or expense under clause 27.1 (h) but only to the extent that the delay or disruption was attributable to the grounds for objection raised by the Contractor to the nomination of the subcontractor or supplier.

Sub-contractor and supplier warranty to Employer

29.3 If it is stated in the Contract that the Employer will require a Nominated Sub-Contractor or Nominated Supplier to enter into a sub-contractor or supplier warranty agreement with the Employer, the Contractor shall, before entering into a sub-contract or supply contract with that Nominated Sub-Contractor or Nominated Supplier, ensure that the Nominated Sub-Contractor or Nominated Supplier has given the sub-contractor or supplier warranty agreement to the Employer in the form set out in the Contract Bills or the Specification or, if not set out in either of those documents, in the form set out in Schedules 2 and 3 of the Conditions.

Contractor's tender for work provided for by a Prime Cost Sum

29.4 If the Contractor obtains permission from the Architect to tender for work provided for by a Prime Cost Sum that falls within the ordinary course of the Contractor's business and his tender is accepted, it shall be treated as a Variation instructed under clause 13.1 and the provisions of clause 29 shall not apply but the limit of Retention stated in the Appendix shall be increased correspondingly.

(2) If the Architect instructs the Contractor to enter into a sub-contract or supply contract using either amended standard conditions or conditions that are different from the standard conditions, then, unless the Contractor was advised of this requirement with a copy of the required sub-contract conditions or supply contract conditions before submitting his tender, the Architect shall issue an instruction requiring a Variation in respect of the differences between the two sets of sub-contract conditions or supply contract conditions.

Nomination using the standard conditions

29.5 (1) The Contractor shall enter into each sub-contract and supply contract using the Standard Conditions of Nominated Sub-Contract or the Standard Conditions of Nominated Supply Contract, unless otherwise instructed by the Architect.

Contractor's responsibility for Nominated Sub-Contractors and Nominated Suppliers

29.6 The Contractor shall be responsible for all Nominated Sub-Contractors and Nominated Suppliers and for all work, other than design work, carried out and materials and goods supplied by them, and shall remain responsible for carrying out and completing the Works in accordance with the Contract notwithstanding the nomination of subcontractors to carry out work or suppliers to supply materials and goods.

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Quantity Surveyor's notification of interim payments

29.7 (1) The Quantity Surveyor shall for each Interim Certificate:

(a) calculate the amount owing to each Nominated Sub-Contractor and Nominated Supplier in accordance with the sub-contract and supply contract;

(b) notify the Contractor of the amount included in the Interim Certificate for each Nominated Sub-Contractor and Nominated Supplier; and

(c) notify each Nominated Sub-Contractor and Nominated Supplier, at the time the Interim Certificate is issued, of the amount of the interim payment included for that sub-contractor and supplier in the Interim Certificate and the amount of Retention held by the Employer.

(2) The Contractor shall pay each Nominated Sub-Contractor and Nominated Supplier the amount included for that Nominated Sub-Contractor or Nominated Supplier in the I nterim Certificate, less any amount properly deductible by the Contractor, within 14 days, or such other time as may be stated in the sub-contract or supply contract, of the Contractor receiving payment from the Employer.

(3) The Contractor shall keep proper and detailed accounts and records of all payments to Nominated Sub-Contractors and Nominated Suppliers and shall make them available for inspection by the Architect.

Direct payment of Nominated Sub-Contractors and Nominated Suppliers

29.8 (1) The Contractor shall, before an Interim Certificate is issued to him, if required by the Architect, provide the Architect with reasonable proof that he has paid each Nominated Sub-Contractor and Nominated Supplier the amount included for that subcontractor or supplier in any previous lnterim Certificate.

(2) The Contractor may withhold an amount from the payment incfuded in an Interim Certificate for a Nominated SUb-Contractor or Nominated Supplier if he provides sufficient substantiation to satisfy the Architect that:

(a) he has good cause for doing so; and

(b) he has informed the Nominated Sub-Contractor or Nominated Supplier of his reasons for withholding that amount before doing so.

(3) If the Contractor withholds an amount due to a Nominated Sub-Contractor or Nominated Supplier and fails to satisfy the requirements under cfause 29.8(2), the Architect shalf issue a certificate to this effect stating the amount withheld, and the Employer shall be entitled to pay this amount to the Nominated Sub-Contractor or Nominated Supplier direct and deduct it from any sum due or to become due to the Contractor.

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(4) Neither the existence nor the exercise of the Employer's power under clause 29.8(3) shall make him liable to pay a Nominated Sub-Contractor or Nominated Supplier direct.

Extension of time for completion of Nominated Sub-Contract works or delivery of Nominated Supply Contract goods

29.9 Where a Nominated SUb-Contractor claims an extension of time for the completion of the sub-contract works or a Nominated Supplier claims an extension of time for the supply of the supply contract goods the Contractor shall make his assessment of the extension of time, if any, that he believes to be fair and reasonable in accordance with the provisions of the Nominated SUb-Contract or Nominated Supply Contract and he shall obtain the Architect's consent before he grants an extension of time to the Nominated Sub-Contractor or Nominated Supplier,

Substantial completion of Nominated Sub-Contract works

29.10 (1) Where a Nominated Sub-Contract requires the sub-contract works to be completed by a specified date, the Architect Shall, if he is satisfied that those works have been substantially completed, issue a certificate to the Contractor to that effect with a copy to the Nominated Sub-Contractor.

(2) Where clause 18 applies, Substantial Completion of the sub-contract works in a Relevant Part shall be deemed to have occurred on the Relevant Date.

(3) Where a Nominated Sub-Contract requires the sub-contract works to be carried out at the same time as the Works with no separate completion date specified, those works shall be deemed to have been substantially completed on the day stated in the Substantial Completion Certificate for the Works and the Architect shall issue a copy of this certificate to each Nominated Sub-Contractor.

Architect to certify Nominated Sub-Contractor's failure to complete on time

29.11 (1) Where a Nominated Sub-Contract requires the sub-contract works to be completed by a specified date and the Nominated Sub-Contractor fails to complete the sub-contract works by that date, or within any extension of time given to him, the Contractor shall notify the Architect of this and issue a copy of the notification to the Nominated SubContractor.

(2) If in the Architect's opinion the Nominated Sub-Contractor has failed to complete the sub-contract works on time the Architect shall issue a certificate to the Contractor to that effect in the form required by the sub-contract within 28 days of the Contractor's notification under clause 29.11 (1), provided that the Arch itect is satisfied that the Contractor has followed the provisions of clause 29.9, and shall issue a copy of his certificate to the Nominated Sub-Contractor.

Early final payment to Nominated Sub-Contractor or Nominated Supplier

29.12 (1) The Architect may include the amount of the final payment to a Nominated SubContractor or Nominated Supplier in an Interim Certificate if:

(a) the sub-contract works have been completed in accordance with the sub-contract or the supply of goods has been completed in accordance with the supply contract;

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(b) the Architect and the Contractor are satisfied that the Nominated Sub-Contractor or Nominated Supplier has remedied aJi defects which have appeared and which the Nominated Sub-Contractor or Nominated Supplier has to remedy under the sub-contract or supply contract; and

(c) the Nominated Sub-Contractor or Nominated Supplier has indemnified the Contractor to the Contractor's reasonable satisfaction against any other defects that may appear and against any omissions or faults in the sub-contract works or goods caused by the Nominated Sub-Contractor or Nominated Supplier for which the Contractor may become liable to the Employer.

(2) The Contractor shall pay the Nominated Sub-Contractor or Nominated Supplier the amount included for him in the Interim Certificate, less any amount properly deductible by the Contractor, within 14 days, or such other time as may be stated in the subcontract, of the Contractor receiving payment or the accounting of payment from the Employer, as the case may be.

(3) Upon final payment to the Nominated Sub-Contractor or the Nominated Supplier:

(a) the Limit of Retention stated in the Appendix shall be reduced by the amount of retention in respect of the sub-contract or supply contract; and

(b) the Contractor shall be discharged from any further liability for rectifying defects or other faults in the sub-contract works or the goods during the Defects Liability Period except for any defects not apparent at the time that the final payment was made.

(4) Notwithstanding the final payment to a Nominated Sub-Contractor or Nominated Supplier for the sub-contract works or the supply of goods, the Contractor shall remain responsible for loss or damage to the whole of the Works including those sub-contract works and the goods supplied and either clause 22A, 22B or 22C, whichever is applicable, shall remain in full force and effect.

Re-nomination

29.13 (1) If the employment of a Nominated Sub-Contractor is determined or a supply contract is terminated for any reason, the Architect, as soon as practicable, shall nominate a replacement sub-contractor or supplier to complete the work sub-contracted to the original Nominated Sub-Contractor or to supply the materials and goods, or the equivalent of the materials or goods, that were to have been supplied by the original Nominated Supplier, and the Contractor shaJi immediately enter into a sub-contract or supply contract with the replacement sub-contractor or supplier.

(2) If the employment of the original Nominated Sub-Contractor was determined or the original supply contract was terminated for any reason other than a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible other than the original sub-contractor or supplier, then any increase in cost between the original and the new sub-contract sum or supply contract sum shall be added to the Contract Sum.

I

._.1

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(3) If the employment of a Nominated Sub-Contractor was validly determined by the original Nominated Sub-Contractor or the supply contract was validly terminated by the original Nominated Supplier because of a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible other than the original sub-contractor or supplier, then any increase in cost between the original and the new sub-contract sum or supply contract sum shall be at the Contractor's expense and shall not be added to the Contract Sum.

(4) The provisions of clauses 29.13(1), 29.13(2) and 29.13(3) shall also apply in the event of the determination of the employment of a replacement sub-contractor or the termination of a supply contract with a replacement supplier.

(5) The Contractor shall have the same right of reasonable objection to the nomination of a replacement Nominated Sub-Contractor or a replacement Nominated Supplier as he had under clause 29.2 to the nomination of the original Nominated Sub-Contractor or Nominated Supplier, and provided that the Contractor registers his objection giving his reasons within 14 days of the nomination of a replacement Nominated Sub-Contractor or replacement Nominated Supplier, the provisions of clause 29.2, where appropriate, shall apply.

Architect's consent

29.14 The Contractor shall not determine the employment of a Nominated Sub-Contractor or terminate a supply contract with a Nominated Supplier without the Architect's consent.

Employer not liable to a Nominated Sub-Contractor or Nominated Supplier

29.15 Neither the existence nor the exercise of the Employer's powers under clause 29 nor anything else contained in these Conditions shall make him liable to a Nominated SubContractor or Nominated Supplier.

30 Persons engaged by Employer

Persons for whom the Employer is responsible

30.1 The following persons shall be deemed to be persons for whom the Employer is responsible:

(a) a Specialist Contractor who, under clause 6.4(3), shall include a statutory undertaker or utility company engaged by the Employer to carry out work;

(b) a person engaged by the Employer under clause 4.3(3); and

(c) a person referred to as a third party under clause 34.2.

Access to the Site and permission to carry out work

30.2 (1) Where the Contract Bills identify and give a general description of work not forming part of the Contract which is to be carried out by a Specialist Contractor, the Contractor shall allow the Specialist Contractor reasonable access to the Site and permit him to carry out his work.

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30 Persons engaged by Employer (Cont'd)

(2) Where the Contract Bills do not provide the information referred to in clause 30.2(1), the Contractor shall still allow the Specialist Contractor reasonable access to the Site and permit him to carry out his work on the condition that if the Contractor incurs additional costs by doing so he may submit a detailed claim with supporting particulars to the Architect for reimbursement of these costs. If the Architect is satisfied that the Contractor has incurred additional costs, the Architect shall instruct the Quantity Surveyor to ascertain the amount of additional payment to be made.

(3) The Contractor shall allow persons engaged by the Employer under clause 4.3(3) reasonable access to the Site and permit them to carry out their work without hindrance as provided in clause 4.3(4).

(4) The Contractor shall allow a person referred to as a third party under clause 34.2 reasonable access to the Site and permit him to examine, excavate or remove an object of antiquity upon an instruction from the Architect to do so under that clause.

Contractor to fulfil his obligations to persons engaged by the Employer

30.3 The Contractor shall at all times fulfil his obligations under clause 2.1 to persons engaged by the Employer.

31 Facilities for statutory undertakers and utility companies

Access to site and facilities to carry out work

The Contractor shall allow statutory undertakers or utility companies referred to in clause 6.4(1) reasonable access to the Site as provided for in clause 6.4(2) and shall give them the facilities set out in the Contract Bills to enable them to carry out work not forming part of the Works on or adjacent to the Site.

32 Certificates and payments

Interim Certificates and interim valuations

32.1 (1) The Architect shall issue an Interim Certificate at the end of each Period of Interim Certificates stated in the Appendix commencing not later than 42 days after the Commencement Date.

(2) The Interim Certificate shall state the amount due to the Contractor from the Employer and the Employer shall pay that amount to the Contractor, less any monies deductible by the Employer under clause 32.1 (6), within the period for payment of certificates stated in the Appendix.

(3) After the issue of the Substantial Completion Certificate for the whole of the Works, Interim Certificates shall only be issued when further amounts are, in the Quantity Surveyor's opinion, due to the Contractor.

(4) The Contractor shall submit to the Quantity Surveyor, at least 14 days before the date on which an Interim Certificate is due to be issued, a statement setting out the Contractor's estimate of the gross valuation of the work in progress including:

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32 Certificates and payments (Cont'd)

(a) the amount estimated for each of the items referred to in clause 32.2(3);

(b) a priced list of the materials and goods either delivered to or adjacent to the Site or stored off-site and to be included in the Interim Certificate under clause 32.3;

(c) all the accounts, vouchers, receipts and other documents that may reasonably be required by the Quantity Surveyor; and

(d) the statements, accounts, vouchers, receipts and other documents submitted to him by the Nominated Sub-Contractors and Nominated Suppliers in accordance with their sub-contracts or supply contracts.

(5) The Quantity Surveyor shall make an interim valuation of the work in progress in accordance with clause 32.2 to determine the estimated amount due in an Interim Certificate and shall submit his valuation to the Architect at least? days before the Interim Certificate is due to be issued.

(6) The Employer may make any deduction authorised by the Contract from the amount due to the Contractor under an Interim Certificate, whether or not any Retention is included in that Interim Certificate, provided that he gives a notice to the Contractor by special delivery stating the amount of the deduction, a build-up of that amount and the reason for it at least 7 days before making the deduction.

Estimate of amount due in Interim Certificate

32.2 (1) The amount due in an Interim Certificate, subject to any agreement between the parties as to stage payments, shall be the estimated gross valuation of the work in progress as referred to in clause 32.2(2) less:

(a) the Retention; and

(b) the total amount stated as due in each Interim Certificate previously issued.

(2) The estimated gross valuation of the work in progress shall be the total of the amounts listed in clause 32.2(3) less the total of the amounts listed in clause 32.2(4).

(3) The following estimated amounts shall be included in the gross valuation:

(a) the value of the permanent work properly carried out including any additional work or obligation instructed as a Variation to the extent that this additional work or obligation has been completed or fulfilled in whole or in part;

(b) the proportion of the value of temporary works properly carried out where their value is included as a separate sum in the Contract Bills;

(c) the proportion of the value of a preliminary item properly provided or carried out by the Contractor where its value is included as a separate sum in the Contract Bills;

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(d) the value of materials or goods on or adjacent to the Site provided that:

(i) they are to be incorporated into the permanent Works;

(ii) they have not been prematurely delivered; and

(iii) they are adequately protected against weather, other damage or theft;

(e) the value of materials or goods to be incorporated into the permanent Works before they are delivered to or adjacent to the Site and to be included in an Interim Certificate in accordance with clause 32.3;

(f) the amounts payable for work carried out by Nominated Sub-Contractors in accordance with the sub-contracts;

(g) the amount payable in respect of a Contractor's tender accepted under clause 29.4 for work provided for by a Prime Cost Sum;

(h) the amounts payable for materials or goods supplied by Nominated" Suppliers in

accordance with the supply contracts; ,

(i) the appropriate proportion of the sums included as separate items in the Contract Bills for:

(i) profit on the amounts payable to Nominated Sub-Contractors and Nominated Suppliers; and

(ii) attendance upon Nominated Sub-Contractors;

U) the payments made and costs incurred for:

(i) statutory fees and charges under clause 6.3;

(ii) opening up and testing materials, goods or work under clause 8.2; or

(iii) effecting and maintaining insurances resulting from the Employer's failure to insure under clause 22B.2(2) or 22C.3(2);

(k) the amount ascertained as additional payment for direct loss and/or expense under clause 27.2;

(I) "the amount payable for reimbursement for increases in the costs of labour and/or materials under clause 38 if applicable; and

(m) any other amount which is required by the Contract to be added to the Contract Sum.

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(4) Without prejudice to the Employer's right of set off, the following estimated amounts shall be deducted from the gross valuation:

(a) the amounts deductible in lieu of:

(i) correction of errors in setting out the Works under clause 7(2);

(ii) replacement or reconstruction of materials, goods or work under clause 8.3(c); and

(iii) rectifying defects under clause 17.3{5);

(b) the amount allowable to the Employer for decreases in the costs of labour and/or materials under clause 38 if applicable; and

(c) any other amount which is required by the Contract to be deducted from the Contract Sum.

Off-site materials or goods

32.3 The Architect may, at his discretion or where expressly provided in the Contract, include the value of materials or goods intended for inclusion in the Works in an Interim Certificate before the materials or goods are delivered to or adjacent to the Site and if this is the case he shall instruct the Quantity Surveyor to estimate the value of these materials or goods for inclusion in the Quantity Surveyor's interim valuation of the work in progress under clause 32.1 (5).

Calculation of Retention

32.4 (1) The Retention on the payment for the Contractor's work in progress shall be calculated by applying the percentage stated in the Appendix as the Retention Percentage to the estimated gross valuation referred to in clause 32.2 exclusive of the amounts payable:

(a) under clause 27;

(b) for work carried out by Nominated Sub-Contractors;

(c) for materials or goods supplied by Nominated Suppliers; and

(d) for any adjustment for fluctuations in the costs of labour or materials under clause 38.

(2) The amount held as the Retention shall not exceed the amount stated in the Appendix as the Limit of Retention, as may be increased or reduced in accordance with the Contract. Once the Limit of Retention has been reached no further amounts shall be retained.

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(3) The retention on the payment for the Nominated Sub-Contractor's work in progress and the Nominated Supplier's supply of materials or goods shall be calculated in accordance with the sub-contract or the supply contract, as the case may be and added to the Retention held on the payment for the Contractor's work.

Retention Rules

32.5 (i) The Retention shall be held upon trust by the Employer for the Contractor and for any Nominated Sub-Contractor or Nominated Supplier {without obligation to invest} subject to the rights of the Employer to have recourse to it for payment of any amount which he is entitled to under the Contract or at law or to deduct from it any sum owed to him by the Contractor, provided that the Employer gives notice to the Contractor in accordance with clause 32.1 (6).

(2) The Architect shall issue an Interim Certificate for the payment of one-half of the Retention held in respect of the whole of the Works, a Section or a Relevant Part, as the case may be, 14 days after Substantial Completion of the whole of the Works, that Section or Relevant Part.

(3) The amount of the Retention held in respect of a Section or Relevant Part shall be deemed to bear the same relationship to the Retention held for the whole of the Works as the estimated amount contained in the Contract Sum for that Section or Relevant Part bears to the Contract Sum.

(4) The Architect shall issue an Interim Certificate for payment of all remaining Retention within 14 days after the issue of the Defects Rectification Certificate for the whole of the Works under clause 17.4 or 17.5.

Quantity Surveyor to prepare final account

32.6 (1) The Quantity Surveyor shall prepare the final account, which is a statement of all adjustments to be made to the Contract Sum as set out in clause 32.7, within the period for completion of the final account stated in the Appendix commencing on the date of the Substantial Completion of the whole of the Works.

(2) The Quantity Surveyor shall send draft copies of the final account to the Contractor and the relevant extracts to each Nominated Sub-Contractor or Nominated Supplier from time to time as the preparation of the final account progresses.

(3) The Contractor shall submit to the Quantity Surveyor ali the documents that are, in the opinion of the Quantity Surveyor, reasonably necessary for the adjustment of the Contract Sum, including those relating to the accounts of Nominated Sub-Contractors and Nominated Suppliers, not later than 6 months after Substantial Completion of the whole of the Works or 3 months before the end of the period for the completion of the final account, whichever is earlier.

(4) The submission of the documents referred to in clause 32.6(3) shall not be a condition precedent to the Quantity Surveyor preparing the final account, and, if the Contractor fails to comply with that clause, the Quantity Surveyor shall prepare the final account based on the information that is available to him.

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(5) The Architect shall issue a copy of the final account signed by the Quantity Surveyor and the Contractor to each of the parties by special delivery.

Adjustment of the Contract Sum

32.7 (1) The Contract Sum shall be adjusted as described in clauses 32.7(2) and (3).

(2) The following amounts shall be deducted from the Contract Sum:

(a) all Prime Cost Sums for work to be carried out by Nominated Sub-Contractors and any Contractor's profit and attendance priced in the Contract Bills as separate items on these sums included in the Contract Bills;

(b) all Prime Cost Sums for materials or goods to be supplied by Nominated Suppliers and any Contractor's profit priced in the Contract Bills as separate items on these sums included in the Contract Bills;

(c) all Provisional Sums and the value of all work for which Provisional Quantities or Provisional Items are included in the Contract Bills;

(d) the total of all Valuations under clause 13.4 which result in a reduction in the Contract Sum;

(i) correction of errors in setting out the Works under clause 7(2);

(e) the amounts deductible in lieu of:

(ii) replacement or reconstruction of materials, goods or work under clause 8.3(c); and

!'

(iii) rectifying defects under clause 17.3(5);

(f) the amount allowable to the Employer for decreases in the cost of labour and/or materials under clause 38 if applicable; and

(g) any other amount which is required by the Contract to be deducted from the Contract Sum.

(3) The following amounts shall be added to the Contract Sum:

(a) the sub-contract sums for each Nominated Sub-Contractor as adjusted in accordance with the sub-contract;

(b) the Contractor's tender sum accepted under clause 29.4 for work provided for by a Prime Cost Sum as adjusted in accordance with the terms of the tender;

(c) the supply contract sums for materials or goods supplied by each Nominated Supplier as adjusted in accordance with the supply contract;

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(d) the Contractor's profit upon the Nominated Sub-Contract sums and on the sums payable to Nominated Suppliers under clauses 32.7(3){a) and 32.7(3)(c) at the rates included in the Contract Bills or in the case where the nomination arises from either:

(i) an instruction as to the expenditure of a Provisional Sum;

(ii) an instruction requiring a Variation for additional or substituted work; or

(iii) by agreement between the Architect and the Contractor,

at appropriate rates in the Contract Bills or, if none, at fair rates;

(e) the sums payable to the Contractor for attendance upon each Nominated SubContractor, provided that the Nominated Sub-Contract sum has been added to the Contract Sum under clause 32.7(3)(a), calculated as follows:

(i) if the Prime Cost Sum is included in the Contract Bills, the sum payable for attendance shall be the price entered in the Contract Bills as a separate item whether or not the Nominated Sub-Contract sum is greater or less than the Prime Cost Sum; or

(ii) if the Prime Cost Sum arose either from an instruction for the expenditure of a Provisional Sum, an instruction requiring a Variation or by agreement between the Architect and Contractor, the sum payable shall be based upon appropriate rates in the Contract Bills, or shall be a reasonable sum;

(f) the total of all Valuations under clause 13.4 which results in an increase in the Contract Sum;

(g) the total of the Valuation of work carried out by and any amount paid by the Contractor in accordance with the instructions of the Architect as to the expenditure of a Provisional Sum and of all work for which Provisional Quantities and Provisional Items are included in the Contract Bills;

(h) the payments made and costs incurred for:

(i) statutory fees and charges under clause 6.3;

(ii) opening up and testing materials, goods or work under clause 8.2; and

(iii) effecting and maintaining insurances resulting from the Employer's failure to insure under clauses 22B.2(2) or 22C.3(2);

(i) the amount ascertained as additional payment for direct loss and/or expense under clause 27.2;

G) the amount payable for reimbursement for increases in the costs of labour and/or materials under clause 38, if applicable; and

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(k) any other amount which is required by the Contract to be added to the Contract Sum.

Issue of Final Certificate

32.8 (1) The Architect shall issue the Final Certificate to each of the parties by special delivery as soon as practicable after the issue of the Defects Rectification Certificate for the whole of the Works provided that the Final Certificate shall not be issued until at least 28 days after a copy of the signed final account has been given to each of the parties under clause 32.6(5).

(2) At the same time as the Architect issues the Final Certificate, he shall notify each Nominated Sub-Contractor and Nominated Supplier of the date it was issued and the amount included for the work carried out or the materials or goods supplied by them.

(3) The Final Certificate shall state:

(a) the Final Contract Sum;

(b) the sum of the amounts already stated as due in each Interim Certificate; and

(c) the difference between the two sums expressed as a balance due to the Contractor from the Employer or to the Employer from the Contractor, as the case may be.

(4) The balance referred to in clause 32.8(3) shall be a debt payable, either by the Employer to the Contractor or by the Contractor to the Employer, as the case may be, 28 days after the issue of the Final Certificate, subject to:

(a) all deductions authorised by the Contract; and

(b) the general rights of set off at law.

Effect of Final Certificate

32.9 (1) Subject to clauses 32.10 and 32.11 and except where any defect in or omission from the Works was not reasonably discoverable at the time of the issue of the Defects Rectification Certificate, the Final Certificate shall be conclusive evidence in any proceedings arising out of the Contract whether by arbitration or otherwise that

(a) the materials, goods, workmanship and work were provided or carried out in accordance with the requirements of clause 8 to the Architect's satisfaction;

(b) the necessary effect has been given in the final account to all the terms of the Contract requiring an adjustment to be made to the Contract Sum;

(c) all and only such extensions of time, if any, as are due under clause 25 have been given; and

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(d) any additional payment for direct loss and/or expense under clause 27 arising out of the occurrence of any of the qualifying events referred to in that clause is in full and final settlement of all claims for breach of contract, duty of care, statutory duty or otherwise,

except and insofar as the Final Certificate shall have been rendered erroneous by reason of fraud, dishonesty or fraudulent concealment.

(2) The issue of the Final Certificate shall not otherwise prejudice any common law rights and remedies regarding defective work.

Proceedings commenced before Final Certificate

32.10 If proceedings under clause 41 are commenced by either party before the Final Certificate is issued, the Final Certificate shall still have effect as conclusive evidence as provided in clause 32.9 after either:

(a) the proceedings have been concluded whereupon the Final Certificate shall be subject to the terms of any award or judgment in or settlement of the proceedings; or

(b) 12 months have passed without either party taking a further step in the proceedings, unless there is reasonable cause for not taking this step, whereupon the Final Certificate shall be subject to any terms agreed in partial settlement,

whichever is earlier.

Proceedings commenced after Final Certificate

32.11 If proceedings under clause 41 are commenced by either party within 28 days of the issue of the Final Certificate, the Final Certificate shall still have effect as conclusive evidence as provided in clause 32.9 except in respect of the matters to which those proceedings relate.

Effect of Architect's certificates

32.12 No Architect's certificate shall constitute or be construed to provide evidence that any materials, goods, workmanship or work to which the certificate relates are in accordance with clause 8 save and except as is provided by the Conditions in regard to the Final Certificate.

Late payment

32.13 If the Employer does not pay an amount certified within the stipulated period of time, the Contractor, without prejudice to his other rights and remedies, shall be entitled to payment together with the certified amount by the Employer of interest at 1 % below the judgment debt rate prescribed from time to time by the Rules of the High Court (Chapter 4A, Laws of Hong Kong) on the amount outstanding 7 days after the latest date on which the certified amount should have been paid.

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33 Surety bond

Contractor to obtain guarantee from insurance company or bank

33.1 (1) The Contractor shall obtain the guarantee of an insurance company or bank, approved by the Architect to be jointly and severally bound with the Contractor to the Employer in the sum stated in the Appendix for the due performance of the Contract under the terms of a surety bond.

(2) The Contractor shall deliver the bond duly executed by the insurance company or bank within 28 days of the acceptance of the Contractor's tender.

(3) The surety bond shall be in the form set out in the Contract Bills or Specification or, if not set out in either of those documents, in the form set out in Schedule 1 of the Conditions, and the cost of obtaining the bond shall be borne by the Contractor.

Release of insurance company or bank

33.2 The insurance company or bank shall be released from the surety bond upon the issue of the Substantial Completion Certificate for the whole of the Works.

Employer's remedy if Contractor fails to deliver bond

33.3 If the Contractor fails to deliver the bond under clause 33.1 , the Employer may withhold an amount not greater than the value of the bond stated in the Appendix until the bond is delivered to the Employer, at which time the amount withheld shall be released in the next Interim Certificate following the delivery of the bond.

34 Antiquities

(a) use his best endeavours not to disturb the fossil, antiquity or object and shall cease work if and insofar as the continuance of work would endanger it or prevent or impede its excavation or removal;

Effect of finding antiquities

34.1 All fossils, antiquities and other objects of interest or value which may be found on the Site before or during excavation shall, subject to the Antiquities and Monuments Ordinance (Chapter 53, Laws of Hong Kong), become the property of the Employer, and upon discovery of a fossil, antiquity or object the Contractor shall:

(b) take all measures which may be necessary to preserve the fossil, antiquity or object in the exact position and condition in which it was found; and

(c) immediately inform the Architect of the discovery and precise location of the fossil, antiquity or object.

Architect's instruction concerning a fossil, antiqUity or object

34.2 The Architect shall instruct the action to be taken concerning the fossil, antiquity or object and may require the Contractor to permit a third party to examine, excavate or remove it.

73

35 Determination by Employer

Default by Contractor

35.1 (1) The Arch itect may give a notice of default to the Contractor before Substantial Completion of the whole of the Works if the Contractor defaults by:

(a) completely or substantially suspending the carrying out of the Works without good cause;

(b) not proceeding regularly and diligently with the Works;

(c) not complying with an instruction from the Architect under clause 8.3 for the replacement, repair or reconstruction of materials, goods or work not in accordance with the Contract resulting in the Works being materially affected;

(d) not complying with clause 19.1; or

(e) not complying with clause 19.2 by sub-letting the whole or substantially the whole of the Works to the same person.

(2) The notice of default shall specify the default and state that a notice of determination may be served if the default continues for a further 14 days after receipt of the notice of default.

(3) The Employer may give a notice of determination of the employment of the Contractor if:

(a) the Contractor continues the default for 14 days after receipt of the notice given under clause 35.1 (1);

(b) the Architect certifies this during the continuation of the default; and

(c) the notice of determination is given to the Contractor within 14 days of the issue of the Architect's certificate under clause 35.1 (3)(b).

(4) The determination of the employment of the Contractor under clause 35.1 (3) shall take effect on the date of receipt of the notice of determination.

(5) Where the Contractor ends the default, or the Employer does not give a notice of determination, the Employer may still determine the employment of the Contractor if:

(a) the Contractor continues the default or resumes it at any time;

(b) the Architect certifies this during the continuation or resumption of the default; and

(c) the notice of determination is given to the Contractor within a reasonable time after the issue of the Architect's certificate under clause 35.1 (5)(b).

(6) The determination of the employment of the Contractor under clause 35.1 (5) shall take effect on the date of receipt of the notice of determination.

74

35 Determination by Employer {Cont'd}

Insolvency of Contractor

35.2 (i) The Employer may give a notice of determination of the employment of the Contractor if the Contractor:

(a) becomes bankrupt;

(b) makes a composition or arrangement with his creditors;

(c) has a petition for compulsory winding-up presented or made against him;

(d) enters into compulsory or voluntary liquidation except for the purpose of reconstruction; or

(e) has a provisional liquidator or receiver appointed.

{2} The determination shall take effect on the date of receipt of the notice unless the Employer, the Contractor and his trustee in bankruptcy, liquidator or receiver, as the case may be, agree in writing to the continuation of the Contractor's employment.

Employer's rights upon notice of default or determination

35.3 If the Architect serves a notice of default upon the Contractor under clause 35.1, or the Employer determines the employment of the Contractor under clause 35.2:

(a) the Contractor shall not remove any materials, goods, temporary buildings, plant or equipment from the Site until instructed to do so by the Architect under clause 35.4;

(b) the Employer shall be given a lien upon all materials, goods, temporary buildings, plant and equipment belonging to the Contractor; and

(c) the Employer may provide site security if the Architect is not satisfied that adequate site security is being provided in which case:

(i) the Contractor shall allow access to the Site for this purpose; and

(ii) the Employer may recover the reasonable cost of providing site security in accordance with clause 40 or as a debt.

Consequences of determination

35.4 (1) In addition to their other obligations under the Contract, the parties shall act in accordance with clause 35.4 upon determination by the Employer under clause 35.

(2) The provisions of clauses 20 and 21 shall remain in effect until the Contractor has left the Site notwithstanding determination of the employment of the Contractor.

(3) The Contractor shall return possession of the Site to the Employer immediately upon determination, notwithstanding that he may dispute the validity of the determination. In the event of a breach of contract by the Employer in determining the employment of the Contractor, the only redress the Contractor shall have against the Employer is a claim in damages.

75

35 Determination by Employer (Cont'd)

(4) If the Architect so instructs, the Contractor shall immediately remove his materials, goods, temporary buildings, plant and equipment with care so as to prevent injury, death or damage to persons or property and ensure that other owners remove theirs with similar care except to the extent that:

(a) they have become the property of the Employer; or

(b) the Architect instructs that some or all of them shall be left on the Site for use in completing the Works.

(5) If the Contractor does not comply with clause 35.4(4) within a reasonable time, the Employer may, without being responsible for any loss or damage, remove and sell the Contractors' property and hold the proceeds, less all expenses incurred, to the credit of the Contractor.

(6) The Employer may employ and pay other persons to complete the Works and to rectify defects of the kind referred to in clause 17.3 and they shall be permitted by the Contractor to enter the Site and use the materials, goods, temporary buildings, plant

and equipment left on the Site under clause 35.4(4). "

(7) If instructed to do so by the Architect, the Contractor shall assign to the Employer, so far as he is legally able to do so, without payment:

(a) all suppliers', manufacturers' and sub-contractors' warranties, guarantees or other ancillary agreements for materials, goods and work relating to the Works, insofar as they are required by the Contract, within 28 days of the date of determination; and

(b) the remaining assignable benefit of any agreements for the supply of materials or goods, carrying out of work and the hiring of plant and equipment within 14 days of the date of determination.

(8) The Employer shall pay for materials, goods, work, plant and equipment, supplied, carried out or hired after determination at the rates stated in the relevant agreements between the Contractor and his sub-contractors or suppliers.

(9) The Employer may pay a sub-contractor or supplier for materials or goods delivered to the Site and work carried out if the materials, goods or work have not already been paid for by the Contractor. If the Contractor has been paid for the materials, goods or work but has not paid the sub-contractor or supplier, the Employer may recover the sum paid to the Contractor under clause 40 or as a debt.

(10) The Employer shall not be required to make any further payment to the Contractor until the final settlement is made under clause 35.6, unless the provisions of clause 35.7 apply.

76

35 Determination by Employer (Cont'c)


35.5 The Quantity Surveyor shall prepare the final account as soon as practicable after the final account for the completion of the Works by the other persons referred to in clause 35.4(6) has been finalised and it shall set out:

(a) the expenses incurred by the Employer in completing the Works excluding the cost of Variations instructed after determination;

(b) the amount of any damage including any liquidated and ascertained damages under clause 24 due up to the date of determination and direct loss and/or expense caused to the Employer by the determination;

(c) the payment made or otherwise discharged in favour of the Contractor; and

(d) the total amount that would have been payable for completing the Works calculated in accordance with the Contract if the determination had not occurred.

The final settlement

35.6 (1) The Architect shall certify, for the purpose of the final settlement, the amounts included in the final account under clause 35.5 as:

(a) the cost incurred by the Employer in completing the Works represented by the total of the items in paragraphs (a), (b) and (c) in clause 35.5; and

(b) the amount that it would have cost the Employer to have carried out and completed the Works but for the determination, represented by the amount in paragraph (d) in clause 35.5.

(2) The difference between the two amounts in clause 35.6(1 )(a) and (b) shall be expressed in the certificate as a debt due to the Contractor from the Employer, or to the Employer from the Contractor, as the case may be, and shall be payable within 28 days after the issue of the Architect's certificate.

Delayed commencement of completion works

35.7 (1) If the Employer has not begun the work of completion within 12 months after the determination, the Contractor may give notice and require the Employer to make the final settlement as soon as practicable.

(2) If instructed to do so by the Architect, the Contractor shall submit all the documents including those relating to the accounts of Nominated SUb-Contractors and Nominated Suppliers which are, in the Quantity Surveyor's opinion, necessary to calculate and prepare the final account.

(3) The Quantity Surveyor shall prepare the final account as soon as practicable after receiving sufficient supporting documentation.

(4) If the Contractor fails to comply with clause 35.7(2) within 60 days of being instructed by the Architect to do so, the Quantity Surveyor shall prepare the final account based on the information that is available to him.

77

.- .. _----. ~---

35 Determination by Employer (Cont'd)

(5) The final account shall set out:

(a) the estimated value of the work in progress properly carried out up to the date of determination calculated in accordance with clause 32.2(2);

(b) the amount of any deduction authorised by the Contract, the amount of any damage including any liquidated and ascertained damages under clause 24 that would have been due up to the date of determination and direct loss and/or expense caused to the Employer by the determination; and

(c) the payments made or otherwise discharged in favour of the Contractor.

(6) The Architect shall certify for the purpose of the final settlement, the amounts set out in the final account and the difference between the value of the work in progress represented by clause 35.7{5}(a) and the costs incurred by the Employer represented by clause 35_7(5)(b) and (c) shall be expressed as a debt due to the Contractor from the Employer or to the Employer from the Contractor, as the case may be.


35.8 The provisions of clauses 35.1 to 35.7 are without prejudice to any other rights and remedies that the Employer may possess.

36 Determination by Contractor

Default by Employer

36.1 (1) The Contractor may give a notice of default to the Employer if the Employer defaults

by: 7

(a) not paying an amount certified due to the Contractor less any deductions authorised by the Contract within the period for payment of certificates stated in the Appendix;

(b) interfering with or obstructing the issue of a certificate to the detriment of the Contractor;

(c) not complying with clause 19_1 (1);

(d) postponing the date for commencement of the whole of the Works or substantially the whole of the Works for a period of 120 days or more due to an Architect's instruction under clause 23.3; or

(e) causing the carrying out of the whole of the Works or substantially the whole of the Works to be suspended for a continuous period of 120 days or more due to an Architect's instruction under clause 23.3 unless notice of the suspension is given in the Contract or the suspension was caused by a breach of contract or other default of the Contractor or any person for whom the Contractor is responsible.

78

36 Determination by Contractor (Cont'd)

(2) The notice of default shall specify the default and state that notice of determination may be served if the default continues for a further 14 days after receipt of the notice of default.

(3) The Contractor may give a notice of determination of his own employment to the Employer if:

(a) the Employer continues the default for 14 days after receipt of the notice given under clause 36.1 (1); and

(b) the notice of determination is given to the Employer within a further 14 days.

(4) The determination shall take effect on the date of receipt of the notice of determination.

(5) Where the Employer ends the default, or the Contractor does not give a notice of determination, the Contractor may still determine his own employment if:

(a) the Employer continues the default or resumes it at any time; and

(b) the notice of determination is given to the Employer upon or within a reasonable time after the continuation or resumption of the default except that in the case of clause 36.1 (1 )(d) the resumption of the default shall have lasted for a continuous period of at least 30 days.

Insolvency of Employer

36.2 (1) The Contractor may give a notice of determination of his own employment if the Employer:

(a) becomes bankrupt;

(b) makes a composition or arrangement with his creditors;

(c) has a petition for compulsory winding-up presented or made against him;

(d) enters into compulsory or voluntary liquidation except for the purpose of reconstruction; or

(e) has a provisional liquidator or receiver appointed.

(2) The determination shall take effect on the date of receipt of the notice of determination.

(3) The obligation of the Contractor to carry out and to complete the Works shall be suspended immediately after the occurrence of any of the events set out in clause 36.2 and before any notice of determination of his own employment takes effect.

79



36.3 (1) In addition to their other obligations under the Contract, the parties shall act in accordance with clause 36.3 upon determination by the Contractor of his own employment under clause 36 unless the employment has been reinstated.


(3) The Contractor shall immediately remove his materials, goods, temporary buildings, plant and equipment with care so as to prevent injury, death or damage to persons or property and ensure that other owners remove theirs with similar care except to the extent that:


(b) the Architect instructs that some or all of them are to be left on the Site for use in completing the Works and the Contractor agrees to leave them on the Site subject to payment under clause 36.4(1 )(c) for materials and goods and a reasonable

payment for the other items. ',

(4) The Contractor shall return the possession of the Site to the Employer immediately upon completing the removal of all items referred to in clause 36.3(3) and in any case not later than 28 days after determination but shall be allowed access to the Site to take all measurements required for the preparation of the final account.


(a) all suppliers', manufacturers' and sub-contractors' warranties, guarantees or other ancillary agreements for materials, goods and work relating to the Works insofar as they are required by the Contract, within 28 days of the date of determination; and


(6) The Employer shall pay for materials, goods, work, plant and equipment supplied, carried out or hired after determination at the rates stated in any relevant agreement between the Contractor and his sub-contractors or suppliers.

(7) The Employer may employ and pay other persons to complete the Works and to rectify defects of the kind referred to in clause 17.3 and they shall be permitted to enter the Site and use the materials, goods, temporary buildings, plant and equipment left on the Site by the Contractor under clause 36.3(3).

(8) The Employer shall pay the Contractor the Retention within 28 days of the date of the determination, subject to any right of the Employer of deduction which had accrued before determination.

80


Contractor to submit final account

36.4 (1) The Contractor shall submit a final account to the Quantity Surveyor for checking, as soon as practicable, setting out the sum of:

(a) the estimated value of the work in progress properly carried out up to the date of determination calculated in accordance with clause 32.2(2};

(b) the estimated value of any work carried out for the protection of the Site and the Works after determination;

(c) any amount not included in clause 36.4(1 }(a) for the cost of materials and goods that were properly ordered for the Works and delivered to or adjacent to the Site which the Contractor has paid for, or is legally bound to pay for, and has or will transfer the property in these materials and goods to the Employer;

(d) the reasonable cost of removal of materials and goods not to be sold to the Employer and temporary buildings, plant and equipment not to be left on the Site; and

(e) the amount of any direct loss and/or expense caused to the Contractor by the determination.

(2) The estimated value of the work in progress referred to in clause 36.4(1 }(a) shall be broken down into separate amounts for each of the relevant items listed in clause 32.2(3).

(3) The Contractor's submission shall be supported by detailed and annotated dimension sheets, measurements, accounts, vouchers, receipts and the like that may reasonably be required by the Quantity Surveyor to ascertain the amounts properly due to the Contractor. The submission shall also include the accounts submitted by each Nominated Sub-Contractor and Nominated Supplier together with their similar supporting documentation.

Quantity Surveyor to check final account

36.5 The Quantity Surveyor shall check, verify or amend the final account as soon as practicable after receiving sufficient supporting documentation.


36.6 (1) Upon verification or amendment of the Contractor's final account under clause 36.5, the Architect shall certify for the purpose of the final settlement:

(a) the amount of the final account being the total of the amounts under clause 36.4(1}; and

(b) the payments made or otherwise discharged in favour of the Contractor.

(2) The difference between the two amounts in clause 36.6(1 }(a) and (b) shall be expressed in the certificate as a debt due to the Contractor from the Employer, or to the Employer from the Contractor, as the case may be and shall be payable within 28 days after the issue of the Architect's certificate.

81


Architect to notify sub-contractors and suppliers

36.7 The Architect shall notify each Nominated Sub-Contractor and Nominated Supplier of the date of the certificate issued under clause 36.6 and the amount included in it for work carried out or materials and goods supplied by them.


36.8 The provisions of clauses 36.1 to 36.6 are without prejudice to any other rights and remedies which the Contractor may possess.

37 Determination by Employer or Contractor

Grounds for determination

37.1 (1) The Employer or the Contractor may give a notice to the other that the employment of the Contractor will be determined in 14 days if the carrying out of the whole of the Works or substantially the whole of the Works has been suspended for a continuous period of 120 days or more due to:

(a) loss or damage caused by a peril covered under the Contractors' All Risks Insurance of the Works or by a Specified Peril covered by the insurance of the existing building;

,

or

(b) hostilities involving Hong Kong.

(2) The Contractor shall not be entitled to give notice of determination under clause 37.1 (1 ) (a) in respect of loss or damage if:

(a) the loss or damage was caused or significantly contributed to by a breach of contract or other default of the Contractor or any person for whom the Contractor is responsible; or

(b) inspection by the insurers or mobilisation by the Contractor significantly contributed to the delay in recommencing the carrying out of the Works.

Site security

37.2 (1) The Employer may provide site security if:

(a) either the Employer or the Contractor has served a notice of determination under clause 37.1(1); and

(b) the Architect is not satisfied that adequate site security is being provided.

(2) The Contractor shall allow access to the Site for the purpose of this clause.


37.3 (1) In addition to their other obligations under the Contract the parties shall act in accordance with clause 37.3 upon determination of the employment of the Contractor by either the Employer or the Contractor under clause 37.1 if the employment has not been reinstated.

82

37 Determination by Employer or Contractor (Cont'd)


(3) The Contractor shall immediately remove his materials, goods, temporary buildings, plant and equipment with care so as to prevent injury, death or damage to persons or property and ensure that other owners remove theirs with similar care except to the extent that:


(b) the Architect instructs that some or afJ of them are to be left on the Site for use in completing the Works.

(4) The Contractor shall return possession of the Site to the Employer immediately upon completing the removal of all items referred to in clause 37.3(3) and in any case not later than 28 days after determination notwithstanding that he may dispute the validity of the determination. In the event of a breach of contract by the Employer in determining the employment of the Contract the only redress the Contractor shafJ have against the Employer is a claim in damages.


(a) all suppliers', manufacturers' and sub-contractors' warranties, guarantees or other ancillary agreements for materials, goods and work relating to the Works, insofar as they are required by the Contract, within 28 days of the date of determination; and


(6) The Employer shafJ pay for materials, goods, work, plant and equipment supplied, carried out or hired after determination at the rates stated in any relevant agreement.

(7) The Employer shall pay the Contractor:

(a) one-half of the Retention within 28 days of the date of determination, subject to any accrued right of deduction which he had before the determination; and

(b) the remainder of the Retention as part of and in accordance with the final settlement under clause 37.5.


37.4 (1) The Contractor shall submit, within 60 days of the date of determination, all the documents including those relating to the accounts of Nominated Sub-Contractors and Nominated Suppliers which are in the Quantity Surveyor's opinion necessary to calculate and prepare the final account.

83

37 Determination by Employer or Contractor (Cont'd)

(2) If the Contractor fails to comply with clause 37.4(1) the Quantity Surveyor shall prepare the final account based on the information that is available to him.

(3) The Quantity Surveyor shall prepare the final account as soon as practicable after receiving sufficient supporting documentation or after the expiry of the 60 days referred to in clause 37.4(1).

(4) The final account shall set out:

(a) the estimated value of work in progress properly carried out up to the date of determination calculated in accordance with clause 32.2(2);

(b) the estimated value of any work carried out for the protection of the Site and the Works after determination;

(c) any amount, not included in the amount calculated under clause 37.4(4)(a). for the cost of materials and goods delivered to or adjacent to the Site properly ordered for the Works which the Contractor has paid for, or is legally bound to pay for, and has or will transfer the property in to the Employer; and

(d) the reasonable cost of removal of materials and goods not to be sold to the Employer and temporary buildings, plant and equipment not to be left on the Site.


37.5 (1) The Architect shall certify for purpose of the final settlement:

(a) the amount of the final account being the total of the amounts under clause 37.4(4); and

(b) the payments made or otherwise discharged in favour of the Contractor.

(2) The difference between the two amounts in clause 37.5(1) shall be expressed in the certificate as a debt due to the Contractor from the Employer, or to the Employer from the Contractor, as the case may be, and shall be payable within 28 days after the Architect's certificate.

Architect to notify sub-contractors and suppliers

37.6 The Architect shall notify each Nominated Sub-Contractor and Nominated Supplier of the date on which the certificate was issued under clause 37.5 and the amount included in it for work carried out and materials or goods supplied by them.

38 Fluctuations

Fluctuation provisions only applicable if expressly stated to be

38.1 The Contract Sum shall be adjusted upwards or downwards to take account of fluctuations in the cost of labour and materials in accordance with the provisions set out in the Contract only if it is expressly stated in the Appendix that the Contract Sum is to be adjusted for fluctuations.

84

38 Fluctuations (Cont'd)

Adjustment for fluctuations occurring after the Completion Date

38.2 If the Contractor fails to complete the Works by the Completion Date and the Architect has issued a certificate to that effect under clause 24.1, the adjustments for fluctuations occurring after the Completion Date shall be calculated based on the cost of labour and materials current at the Completion Date.

39 Notices, certificates and other communications

Submission of notices, certificates and other communications

(1) All notices, certificates and other communications under the Contract shall be submitted to the Employer, the Architect or the Contractor on the Site or sent to the address stated in the Articles of Agreement or such other address in Hong Kong as may be advised.

(2) Except for notices, certificates or other communications required to be sent by special delivery, a notice, certificate or other communication shall be given by hand, sent by post or, if both parties agree, sent by facsimile or electronic mail.

(3) Any notice, certificate or other communication sent by prepaid post shall be deemed to be received two clear days, excluding general holidays, after posting.

40 Recovery of money due to the Employer

Employer's power to recover damages etc.

(1) The Employer may make any deduction authorised by the Contract or at law including without limitation, deductions for costs, damages, liquidated and ascertained damages, debts, expenses or other sums for which the Contractor is liable to the Employer from amounts due to the Contractor including Retention.

(2) It is a condition precedent to the Employer's right of deduction under clause 40.1 (1) that he gives a notice to the Contractor by special delivery stating the amount of the deduction and the reason for it at least 7 days before making the deduction.

41 Settlement of disputes

Procedures and Designated Representatives

41.1 (1) Subject to clause 41.5 dealing with early arbitration the parties shall follow the dispute settlement procedures outlined in clause 41.

(2) Each party shall designate one of its own senior executives as its representative (referred to in clause 41 as the' Designated Representatives') within 14 days of acceptance of the Contractor's tender, and the Desiqnated Representatives shall endeavour to settle disputes that arise during the carrying out of the Works.

(3) The DeSignated Representatives shall have the authority to settle disputes and shall not be involved in the day to day administration of the Contract.

85

41 Settlement of disputes (Cont'd)

Reference to Designated Representatives

41,2 (1) If a dispute arises under or in connection with the Contract, the Architect shall, at the request of either party, immediately refer the dispute to the Designated Representatives.

(2) The Designated Representatives shall meet within 7 days of receipt of a notice from the Architect requesting them to resolve the dispute.

41.3

Reference to mediation

(1) If the dispute is not resolved by the Designated Representatives within 28 days of the dispute being referred to them by the Architect under clause 41.2. either party may give a notice to the other party. by special delivery, to refer the dispute to mediation and the person to act as the mediator shall be agreed between the parties.

(2) If the parties fail to agree on the person to act as the mediator within 21 days after either party has given to the other a written request to do so, the mediator shall, on the written request of either party, be appointed by the President or Vice-President for the time being of The Hong Kong Institute of Architects co-jointly with the President or Vice-President for the time being of the Hong Kong Institute of Surveyors.

(3) The mediation shall, unless otherwise agreed by the parties, be conducted in accordance with and subject to the Hong Kong International Arbitration Centre Mediation Rules except those provisions in the Rules relating to the appointment of the mediator.

(4) A dispute under Article 5 shall be immediately referred to arbitration without first being referred to mediation.

Reference to arbitration

41.4 (1) If the dispute is not settled by mediation within 28 days of the commencement of the mediation, either party may give a notice to the other party, by special delivery, to refer the dispute to arbitration and the person to act as the arbitrator shall be agreed between the parties.

(2) If the parties fail to agree on the person to act as the arbitrator within 21 days after either party has given to the other a written request to do so, the arbitrator shall, on the written request of either party, be appointed by the President or Vice-President for the time being of The Hong Kong Institute of Architects co-jointly with the President or Vice-President for the time being of the Hong Kong Institute of Surveyors.

(3) The Presidents or Vice-Presidents referred to in clause 41.4(2), if in agreement to do so, may, at their discretion, request the Hong Kong International Arbitration Centre to appoint the arbitrator, by a joint letter to the Chairman of that organization.

(4) If the Presidents or Vice-Presidents referred to in clause 41.4(2) fail to appoint the arbitrator within 60 days after receiving the written request to do so under clause 41 .4(2) then the arbitrator shall on the written request of either party be appointed by the Hong Kong International Arbitration Centre.

86


(5) The arbitration shall be a domestic arbitration conducted in accordance with the Arbitration Ordinance (Chapter 341, Laws of Hong Kong) and, unless otherwise agreed by the parties, with the Domestic Arbitration Rules of the Hong Kong International Arbitration Centre except those provisions in the Rules relating to the appointment of the arbitrator.

Timing of arbitration

41.5 (1) The arbitrator shall have jurisdiction to hear the parties and commence the arbitration of a dispute arising out of, under or in connection with the Contract at any time on a question of whether:

(a) an Article 5 objection will be upheld;

(b) the Architect is empowered by the Conditions to issue an instruction;

(c) a certificate has been improperly withheld or was not issued in accordance with the Conditions;

(d) the assessment of the Employer's loss of value under clause 7(2) is reasonable;

(e) the Contractor's objection to a Variation referred to in clause 13.1 (1 )(a) is reasonable; and

(f) the Contractor's consent to the Employer taking possession of a Relevant Part under clause 18.1 is unreasonably withheld,

or on a dispute under clauses 35,36 and 37.

(2) The hearing of disputes other than those listed in clause 41.5(1) shall not commence until after Substantial Completion or alleged Substantial Completion of the whole of the Works or determination or alleged determination of the Contractor's employment or abandonment of the Works unless the written consent of the parties to the hearing is given after the dispute has arisen.

Arbitrator's powers

41.6 The arbitrator's powers include:

(a) rectifying the Contract to accurately reflect the true agreement made by the parties;

(b) directing measurements or Valuations to determine the rights of the parties;

(c) assessing and awarding any sum which ought to have been the subject of or included in a certificate; and

(d) opening up, reviewing and revising, without limitation, the giving, submitting or issuing of any agreement, approval, assessment, authorization, certificate, confirmation, consent, decision, delegation, direction, dissent, determination, endorsement, instruction, notice, notification, opinion, request, requirement, statement, termination or Valuation.

87


The place of arbitration

41.7 The place of arbitration shall be Hong Kong.

Contractor to continue to proceed diligently

41.8 (1) The Contractor shall continue to proceed regularly and diligently with the Works despite a dispute having arisen, and shall continue to give effect to all instructions from the Architect unless and until revised by agreement between the Designated Representatives, by mediation or in arbitration under clause 41.

(2) The Contractor's compliance with clause 41 .8(1) is without prejudice to any other rights and remedies that he may possess.

;-1

88

Appendix

Clause

Clause

Time for submission of master programme

(if not stated, within 42 days of acceptance of the Contractor's tender)

3.1

Liquidated and ascertained damages (HK$ per day)

24.2

Defects Liability Period

(if not stated, 12 months from Substantial Completion

of the Works, a Section or a Relevant Part)

17.3

Period of Interim Certificates (if not stated, 1 calendar month)

32.1

Limit of indemnity to third party liability 21.2 Period for payment of certificates 32.1
insurance against injury or death to any (if not stated, within 14 days
person from the date of the certificate)
HK$

Limit of indemnity to third party liability 21.2 Retention Percentage 32.4
insurance against injury or damage to (if not stated, 10 per cent)
real or personal property
%
HK$
Limit of Retention 32.4
Insurance of the Works 22.1
*Clause 22A1Clause 22BI HK$
Clause 22C applies plus the Retention held in
respect of Nominated Sub-Contractors
Percentage to cover 22.2 and Nominated Suppliers
professional fees
% Period for completion of the 32.6
final account
Date for Possession of the Site 23.1 (it not stated, within 12 months
from Substantial Completion
of the whole of the Works) Commencement Date

23.2

Amount of surety bond

33.1

HK$ __ ~ ~ ___

Completion Date

23.2

Fluctuations

(The Contract Sum will be adjusted for fluctuations only if it is expressly stated to be so adjusted in the space below)

38

* Delete as applicable

89

SCHEDULE 1

FORM OF SURETY BOND

TO BE GIVEN BY THE CONTRACTOR TO THE EMPLOYER

By this Bond, we ..

<trading as > (Note 1)

[whose registered office is] at.. (Note 2)

('the Contractor') and .

whose registered office is at .

('the Surety') are held and firmly bound unto ,', ..

('the Employer') in the sum of Hong Kong Dollars ..

............................................................................................. (HK$ )

for the payment of which sum the Contractor and the Surety bind themselves, their successors and assigns, jointly and severally by these presents.

Sealed with our respective seals/Signed and sealed respectively* (Note 3) and dated this

........................ day of 20 .

Whereas [By a Contract dated the day of 20 .

made between the Employer of the one part and the Contractor of the other part] or

[By the letter of acceptance sent by the Architect on behalf of the Employer to the Contractor

dated the day of 20 the Employer accepted the

tender submitted by the Contractor dated the day of 20 ]

(Note 4) forthe .

90

('the Contract') the Contractor has agreed to develop the Architect's design to the extent specified in the Contract, construct, complete and maintain the Works (as therein defined) until the issue of the Defects Rectification Certificate and to perform the Contract in conformance with the provisions thereof.

and whereas pursuant to the terms of the Contract, the Contractor has agreed to obtain the

guarantee of a surety to be bound unto the Employer in the sum of Hong Kong Dollars .

(HK$ ) for the due performance of Contract by the Contractor.

and whereas at the request of and for the account of the Contractor, the Surety has agreed to guarantee the Employer the due performance by the Contractor of its obligations under the Contract.

Now the conditions of the above written Bond are:-

1. The words and expressions in this Bond shall have the same meaning as in the Contract.

2. The Contractor shall duly perform and observe all the terms, provisions, conditions, obligations, stipulations and specification of the Contract according to the true purport intent and meaning thereof and to the reasonable satisfaction of the Architect appointed by the Employer in respect of the Works or if on default by the Contractor the Surety shall satisfy and discharge the damages sustained by the Employer thereby as certified by the said Architect, up to the amount of the above written Bond then his obligation shall be null and void but otherwise his obligation shall be and remain in full force and effect.

3. No alterations in terms of the Contract made by agreement between the Employer and the Contractor or in the extent or nature of the development of the Architect's design to the extent specified in the Contract, construction, completion and maintenance of the Works and no allowance or extension of time given or to be given by the Employer under the Contract nor any indulgence, forbearance, forgiveness, payment or concession to the Contractor in or in respect of any matter or thing concerning the Contract on the part of the Employer or any failure of supervision to prevent any fault by the Contractor shall in any way release the Surety from any liability under the above written Bond.

4. This Bond shall be binding upon the Contractor and the Surety and their respective successors and assigns jointly and severally (provided that the Contractor and Surety may not assign their respective rights and liabilities hereunder without the prior written consent of the Employer) and shall inure to the benefits of the Employer and its successors and assigns.

5. This Bond shall remain valid for receipt of claims as aforesaid until the date of issue of the Defects Liability Certificate pursuant to the Conditions of the Contract and any release of the Surety from the Bond shall be expressly subject to any claims made before this date.

6. This Bond shall be governed and construed in accordance with the laws of the Hong Kong Special Administrative Region and the Surety hereby agrees to the non-exclusive jurisdiction of the Courts of the Hong Kong Special Administrative Region.

91

SIGNED, SEALED AND DELIVERED by the

(Note 5)

Contractor in the presence of :-

(Signature of witness)

(Name and occupation of witness)

OR

THE COMMON SEAL of the Contractor

was hereunto affixed in the presence of :-

) ) ) ) ) ) ) ) ) ) )

(Note 6)

"



OR


) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

(Note 7)

SIGNED, SEALED AND DELIVERED for

and on behalf of and as lawful

attorney of the Contractor

under Power of Attorney dated

................................................................ by

in the presence of :-


92

THE COMMON SEAL of the Surety was here-

unto affixed in the presence of :-

) ) ) ) ) ) ) ) ) ) )

(Note 6)



OR


by ..

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

(Note 7)


attorney of the Surety





(1) Delete content in <

(2) Delete content in [

(3) * Delete as appropriate.

Delete 'Sealed with our respective seals' in the case of a firm.

Delete 'Signed and sealed respectively' in the case of a limited company.

(4) ** Delete as appropriate, select according to whether the Contract is signed or not.

(5) For use in the case of a sole proprietor or where all partners of a firm execute.

(6) For use in the case of a limited company executing under its common seal.

(7) For use in the case of a firm or a limited company executing through an attorney.

> where the Contractor is a limited company. ] where the Contractor is a firm.

93

-

SCHEDULE 2

FORM OF WARRANTY TO BE GIVEN BY THE NOMINATED SUB-CONTRACTOR TO

THE EMPLOYER IN CONSIDERATION OF NOMINATION

This DEED OF WARRANTY is granted to .

('the Employer') in respect of .

('the Main Contract Works') which are to be carried out by .

j :

('the Contractor') under the terms of the Contract between the Employer and the Contractor

.:

.,

dated or the letter of acceptance

dated of the Contractor's tender dated

............................................................................................................................................ * and

In respect of our Tender for ..

('the Sub-Contract Works') which are intended to form part of the Main Contract Works under a Nominated Sub-Contract ('the SUb-Contract').

We .

('the Nominated Sub-Contractor') warrant that in consideration of your instructing the Architect to nominate us as the Nominated Sub-Contractor for the Sub-Contract Works:-

(a) We will commence and complete the Sub-Contract Works in accordance with the SubContract.

* delete as appropriate

94

(b) We will indemnify the Employer against all extra costs that may be incurred by nonperiormance of the Sub-Contract Works, by late completion of the Sub-Contract Works or by any breach of these warranties.

(c) We have exercised and will exercise all reasonable skill and care in :-

(i) the design of the Sub-Contract Works insofar as the Sub-Contract Works have been or will be designed by us; and

(ii) the selection of materials and goods for the Sub-Contract Works insofar as such materials and goods have been or will be selected by us.

(d) We will comply with and satisfy any performance specification or requirements insofar as such performance specification or requirements are included or referred to in the Tender Documents and/or our Tender as part of the description of the Sub-Contract Works.

(e) We will supply the Architect and or Contractor with such information as either may reasonably require and at such times that the Contractor shall not be delayed in completing the Main Contract Works by the Completion Date by our failure to supply such information or by delay on our part, provided always that no liability shall arise in respect of such delay on our part until we have accepted the Contractor's order in respect of the SubContract Works.

(f) Nothing in our Tender shall operate to exclude or limit our liability for breach of the warranties set out herein.

(g) We will obtain a surety bond in the form set out in Schedule 1 of the Sub-Contract with the requisite changes in wording to reflect that the bond is to be given by the Nominated Sub-Contractor to the Employer instead of to the Contractor. This bond will be duly executed under seal by an approved insurance company or bank, acknowledging that the insurance company or the bank is jointly and severally bound with us to the Employer inthe sum of 10% of the Sub-Contract Sum (rounded up the nearest thousand dollars) against breach of the warranties hereof.

The words and expressions used in this Deed of Warranty shall have the same meaning as in the Contract and the Sub-Contract.

95


) ) ) ) ) } ) ) ) ) )

(Note 1)

Sub-Contractor in the presence of :-



OR

THE COMMON SEAL of the Sub-Contractor


) ) ) ) ) ) ) ) } } }

(Note 2)

was hereunto affixed in the presence of :-


OR



) ) ) ) ) ) } ) ) ) ) ) ) ) ) )

(Note 3)


attorney of the Sub-Contractor


................................................................ by


Notes (1) For use in the case of a sole proprietor or where all partners of a firm execute. (2) For use in the case of a limited company executing under its common seal.


96

SCHEDULE 3

FORM OF WARRANTY TO BE GIVEN BY THE NOMINATED SUPPLIER TO

THE EMPLOYER IN CONSIDERATION OF NOMINATION

This DEED OF WARRANTY is granted to .

('the Employer') in respect of .

('the Main Contract Works') which are to be carried out by .

('the Contractor') under the terms of the Contract between the Employer and the Contractor

dated or the letter of acceptance

dated of the Contractor's tender dated

............................................................................................................................................ * and

In respect of our Tender for ..

the Supply Contract materials, goods, equipment and other things ('the Goods') which are intended to be incorporated in the Main Contract Works under a Nominated Supply Contract ('the Supply Contract').

We .

('the Nominated Supplier') warrant that in consideration of your instructing the Architect to nominate us as the Nominated Supplier for the Goods:-

(a) We will commence and complete the delivery of the Goods and pertorm all the services specified, in accordance with the terms of the Supply Contract.

* delete as appropriate

97

(b) We will indemnify the Employer against all extra costs that may be incurred by nonperformance of the Supply Contract, by late delivery of the Goods or by any breach of these warranties.

(c) We have exercised and will exercise all reasonable skill and care in ;-

(i) the design of the Goods insofar as the Goods have been or will be designed by us; and

(ii) the selection of materials, goods and equipment for the Supply Contract insofar as such materials, goods and equipment have been or will be selected by us.

(d) We will comply with and satisfy any performance specification or requirements insofar as such performance specification or requirements are included or referred to in the Tender Documents and/or our Tender as part of the description of the Supply Contract.

(e) We will supply the Architect and/or Contractor with such information as either may reasonably require and at such times that the Contractor shall not be delayed in completing the Main Contract Works by the Completion Date by our failure to supply such information or by delay on our part, provided always that no liability shall arise in respect of such delay on our part until we have accepted the Contractor's order in respect of the Supply Contract.

(f) Nothing in our Tender shall operate to exclude or limit our liability for breach of the warranties set out herein.

I'

(g) We will obtain a surety bond in the form set out in Schedule 1 of the Supply Contract with the requisite changes in wording to reflect that the bond is to be given by the Nominated Supplier to the Employer instead of to the Contractor. This bond will be duly executed under seal by an approved insurance company or bank, acknowledging that the insurance company or the bank is jointly and severally bound with us to the Employer in the sum of 10% of the Supply Contract Sum (rounded up the nearest thousand dollars) against breach of the warranties hereof.

The words and expressions used in this Deed of Warranty shall have the same meaning as in the Contract and the Supply Contract.

98


•• ~ •• 4 ••• ~ ••••••••••••••••••• ~ •••••••• ~ ••••••• 4 •••••••• , ••••••••••••

) ) ) ) ) ) ) ) } ) )

(Note 1)

Supplier in the presence of ;-



OR

THE COMMON SEAL of the Supplier


) ) ) ) ) ) ) ) ) ) )

(Note 2)

was hereunto affixed in the presence of ;-


OR

................................................................ by

) } ) ) ) ) ) } ) ) ) ) ) ) ) )

(Note 3)



attorney of the Supplier


in the presence of ;-


Notes (1) For use in the case of a sole proprietor or where all partners of a firm execute. (2) For use in the case of a limited company executing under its common seal.


99

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Standard Form of Contract 2005 - With Quantities

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347.