Civil Engineering Course of Study
Engineering Contracts and Specifications
ENP Construction Co. as a general contractor has the responsibility to make a project successful . At the first project who obtain the erection of school he make a contract with PATIHA an electrical subcontractor . Their contract states that PATIHA "shall install the electrical wiring as soon as ENP finishes the plastering work."
The problem with their corporation begin when PATIHA is refusing to install the wiring until the plastering work is completed. ENP has been demanding that they begin the electrical work for the past 3 weeks. PATIHA has refused .
Despite the express terms that the subcontractor must finish the job after the contractor finishes the plastering work , there is the provision in standard form of contracts ( such as Υ1 or Υ2 of the Cypriot standard form of contracts - ΜΕΔΣΚ ) that the contractor can order variations on the work to be done by the subcontractor . Clause 12 of ΜΕΔΣΚ , allows for variations either in the quality or the quantity or the time occurrence of the works .
In this case the contractor notifies the subcontractor to change the time occurrence of the works , ie he gives the subcontractor a variation order . The details of this variation order will have to be examined .
Standard form of contracts such as ΜΕΔΣΚ provide for variation orders to be given either orally or written . If the variation order was given orally then the subcontractor must , within seven days , confirm the variation order in writing if the contractor does not do so .
If the contactor issues a written variation order or the subcontractor confirms in writing the variation order , ΜΕΔΣΚ provides that the subcontractor has to comply with the variation order within seven days . If the subcontractor fails to do so , the contactor has the right, under the ΜΕΔΣΚ contract, to employ others to do the works mentioned in the order , pay them directly and such costs to be deducted from the subcontractor .
In this case the contractor notifies the subcontractor for the variation order and the subcontractor refuses to comply for three weeks . The contractor then issues a final warning notifying the subcontractor to comply with the order within seven days and if he fails to do so he will employ others to do the works.
Having in mind the provisions of the Cypriot standard form of contracts – ΜΕΔΣΚ as mentioned above, and the scenario in question, if the contractor issued the order in writing or the subcontractor replied in writing in an oral variation, then the case is documented and the provisions of the contract would apply. In this case the subcontractor was paid €5000 for executed work in a €10000 subcontract. The contractor paid €6000 to another subcontractor to finish the works therefore the subcontractor (PATIHA) is liable to pay the contractor (ENP Construction Co. ) €1000 .
In the case that the variation order mentioned above is undocumented , ie the contractor issued an oral variation and the subcontractor refused orally and also the final warning of the contractor was oral as well and there were no witnesses to confirm these , then contractor would be liable to pay the subcontractor an amount for his loss of profit from the subcontract . Such an amount will be calculated based on the average profit percentage of the subcontractor obtained from his audited accounts for the last three years .
Lastly , the contract between the contractor and the school does not require the job to be done in any length of time. This clause does not have any effect on the subcontractor since it is the subcontract that defines the time limitations of the subcontractor . The contractor may require for his own reasons for the subcontract to finish earlier ....