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Engineering Law and the ICE Contracts

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Engineering Law and the ICE Contracts ENGINEERING LAW AND THE I.C.E. CONTRACTS To the memory of LEONARD ABRAHAMSON incomparable parent and teacher and to EDNA and GAIL, LYNNE, LEONARD and EMILY for joy received Engineering Law and the I.C.E. Contracts MAX W. ABRAHAMSON (Mod.) B.A., LL.B., Solicitor Sometime Scholar in Law of Trinity College, Dublin Honorary Fellow of the Institution of Engineers of Ireland Companion of the Institution of Civil Engineers FOURTH EDITION With a Foreword by Sir William Harris Taylor & Francis \^^\J Taylor & Francis Group LONDON AND NEW YORK Published by Taylor & Francis 2 Park Square, Milton Park, Abingdon, Oxon, 0X14 4RN 270 Madison Ave, New York NY 10016 Transferred to Digital Printing 2009 First edition 1965 Second edition 1969 Reprinted 1970, 1972 Third edition 1975 Reprinted 1978 Fourth edition 1979 Reprinted 1983, 1985, 1989, 1992, 1995, 1996 © Max W. Abrahamson 1965, 1969, 1975, 1979 ISBN 0 419 16080 9 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the UK Copyright Designs and Patents Act, 1988, this publication may not be reproduced, stored, or transmitted, in any form or by any means, without the prior permission in writing of the publishers, or in the case of reprographic reproduction only in accordance with the terms of the licences issued by the Copyright Licensing Agency in the UK, or in accordance with the terms of licences issued by the appropriate Reproduction Rights Organization outside the UK. Enquiries concerning reproduction outside the terms stated here should be sent to the publishers at the London address printed on this page. The publisher makes no representation, express or implied, with regard to the accuracy of the information contained in this book and cannot accept any legal - responsibility or liability for any errors or omissions that may be made. A Catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data available Publisher's Note The publisher has gone to great lengths to ensure the quality of this reprint but points out that some imperfections in the original may be apparent. Preface to the Fourth Edition As the bible of the civil engineering industry the I.C.E. Conditions have the distinction, in common with other scripture reflecting diverse and unfortunately combative activity, that the more they are analysed and used, the more issues appear. That is one of the excuses for the extra pages in this edition. Some of the problems dealt with have already arisen in practice, and it would be optimistic to believe that even those that seem most abstruse and academic will not sooner or later complicate construction or some final accounts. Many other additions are due to the recent enthusiasm of judges and parliament for reform, and will surprise those who attribute rigor mortis to law and lawyers. The industry itself can of course bring pressure and carry out research and investigation to make sure that all future reforms are beneficial. A new edition of the F.I.D.I.C. International Conditions was published in 1977, moving in a different direction to the I.C.E. Conditions. As a result it is no longer adequate to deal with international contracts in one chapter of a book on the domestic forms. The chapter on the F.I.D.I.C. Conditions in previous editions of this book therefore has been omitted, but may be expanded later into a separate volume. Topics dealt with in new or expanded notes in this edition include— adjustment and balancing items (pp. 15-16), ingredients of a letter of intent (pp. 18-19), assignment of contract payments (p. 39), responsibility for temporary works and the contractors responsibility for design of permanent works (pp. 52 5), new decisions relevant to site and other information supplied by the employer (pp. 61-3) and to cl. 20 of the Conditions (p. 97), general note on cl. 44 (pp. 138 9), variations to temporary works (p. 170), variations permitted bycl. 51 (pp. 172-4), design changes contributed by or as concessions to the contractor (pp. 179-84), an important decision on concessions obtained by the contractor by pressures on the employer (p. 182), errors in and omissions from the bill (pp. 206-9), contractual aspects of the new Civil Engineering Standard Method of Measurement (pp. 213-18) and method-related charges (pp. 218-20), retention of title clauses (p. 262), counterclaims (pp. 269-72), the contract price fluctuations clause (pp. 316-19), disruption claims and their assessment, and acceleration claims (pp. 364-72), the expanding extent and period of liabilities and side effects on the Conditions (pp. 393-9 and 430-1), the Unfair Contract Terms Act 1977 (pp. 431-4), tendermanship and claimsmanship (ch. 17). More than a score of newly unearthed detailed issues on the Conditions and 102 additional court decisions are included. M.W.A. V Preface to the First Edition The Institution of Civil Engineers, etc., forms of construction contract are now used for most English and Irish engineering works, and also abroad. My major aim in this book is to supply the engineer or contractor turning to any particular clause in the forms with an analysis of the clause and cross- references, and the background law necessary to apply it. At the same time the notes and general chapters are planned to give an outline of general engineering law independent of these forms. The Association of Consulting Engineers' service agreements are dealt with in the same way. This book is therefore not primarily written for lawyers, and I have shunned legal jargon not only because outsiders find it pompous and out of date, but because I feel that it is in practice a real obstacle to understanding and useful co-operation between the engineer and lawyer. At the same time I hope that this book will be helpful to my colleagues—the arguments and authorities on doubtful points are set out fully, and I have tried to make clear the unique problems of engineering, since lawyers almost always equate civil engineering works, however vast, with having a house built. The engineers I have had the pleasure of lecturing and advising have, in the nicest way, made it plain that they generally prefer to steer clear of law and lawyers. As a result the parties do not always consider the contract forms properly before signature, or even when there is trouble on the works—but it is certain that they would avoid much eventual suffering at the hands of lawyers if they did. A knowledge of the contract is obviously essential to a contractor if he is to value the risks he is taking, and the contractor, employer and engineer should find the forms, if completely understood, a useful guide on avoiding or solving many problems. It is even possible that the engineer may learn some general lessons from the lawyer—particularly about precision of language and the proper approach to disputes. I hope that this book will make a small contribution to that also. vii Foreword by SIR WILLIAM HARRIS, K.B.E., C.B., D.Sc.(Hon.), MA., F.Eng., F.LC.E. Past President of the Institution of Civil Engineers When, after three years" hard labour by the Joint Contracts Committee of the I.C.E., A.C.E. and F.C.E.C., under my chairmanship, the 5th Edition of the I.C.E. Conditions of Contract was published by the sponsors in June 1973, there was a great deal of public debate among engineers, contractors and lawyers. Articles were written, lectures given and conferences organised and, not surprisingly, opinions differed—even among the lawyers—on the interpretation and probable effects of a number of the changes that had been made. It was at that time that I first got to know Max Abrahamson personally and began to appreciate his deep interest in and knowledge of the law and practice of civil engineering contracts. He was one of the first to analyse and, in some respects, criticise the new 5th Edition and he and I had several meetings to discuss the opinions he expressed. I was greatly impressed by the depth of thought Mr. Abrahamson had given to the whole subject and also by his reasonable and constructive attitude throughout our discussions—even though we continued to differ on a number of issues. The first two editions of Mr. Abrahamson's book (1965 and 1969) were based on the 4th Edition of the I.C.E. Conditions of Contract and, in 1975, after a major re-writing, his third edition, incorporating the 5th Edition of the I.C.E. Conditions, was published. By this time these were in fairly general use for new contracts, but there was little experience of operating them and, of course, no case law at all. Nevertheless, Mr. Abrahamson's careful and detailed analysis of the Conditions themselves and of the duties and responsibilities of the several parties involved in the practical operation of contracts based on them has been a most valuable aid to all concerned. There must be few engineers or contractors offices in which his third edition is not regarded as an essential reference book. Since then there has been a number of important developments, such as the publication of the C.E.S.M.M. in 1976, the Unfair Contract Terms Act 1977 and the changing attitude to liability for negligence. Moreover, experience in the use of the new I.C.E. Conditions, the Baxter Indices and the C.E.S.M.M. is accumulating: and although there is, as yet, little (if any) case law arising from the 5th Edition, there have been further important court decisions on construction contracts generally.
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