Entire Contract Principle in Construction Industry
Entire Contract Principle in Construction Industry
Entire contract principle is an understanding and agreement that has always been a concern of many parties in the construction world. Construction activity is activities that constitute a complete unity and hard to be done partially. A variety of factors make a construction contract different from most other types of contracts. These include the length of the project, its complexity, its size and the fact that the price agreed and the amount of work done may change as it proceeds. In Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689 at 717 Lord Diplock described a building contract as an entire contract for the sale of goods and work and labor for a lump sum price payable by installments as the goods are delivered and the work is done. Entire contract principle will involve all phases of construction in its implementation. Based on the case ever appears that the dispute that occurred within the entire contract principle much caused by the owner the dissatisfaction for work performed by contractors. Most cases that occur in the end won the owner as the party who feel aggrieved, but on the other side of the contractors also experienced the loss in no small amount. Hudson’s Building & Engineering Contracts (Sweet & Maxwell 1995, 11th Edition at p 475, 4.006, p 476, 4.008) elaborates upon this proposition stating that “ the essence of a building contract is a promise by the contractor to carry out work and supply materials in consideration of a promise by the building owner to pay for it the great majority of building contracts in the traditional form consist of an undertaking to complete the work for a contract price either ascertained (in the case of a specification form of contract without quantities) or ascertainable (in the case of a measurement contract with quantities or schedules of rates) and are therefore ‘lump sum’ or entire contracts, in the legal sense”.
We said
Entire contract principle is an understanding and agreement that has always been a concern of many parties in the construction world. Construction activity is activities that constitute a complete unity and hard to be done partially. A variety of factors make a construction contract different from most other types of contracts. These include the length of the project, its complexity, its size and the fact that the price agreed and the amount of work done may change as it proceeds. In Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689 at 717 Lord Diplock described a building contract as an entire contract for the sale of goods and work and labor for a lump sum price payable by installments as the goods are delivered and the work is done. Entire contract principle will involve all phases of construction in its implementation. Based on the case ever appears that the dispute that occurred within the entire contract principle much caused by the owner the dissatisfaction for work performed by contractors. Most cases that occur in the end won the owner as the party who feel aggrieved, but on the other side of the contractors also experienced the loss in no small amount. Hudson’s Building & Engineering Contracts (Sweet & Maxwell 1995, 11th Edition at p 475, 4.006, p 476, 4.008) elaborates upon this proposition stating that “ the essence of a building contract is a promise by the contractor to carry out work and supply materials in consideration of a promise by the building owner to pay for it the great majority of building contracts in the traditional form consist of an undertaking to complete the work for a contract price either ascertained (in the case of a specification form of contract without quantities) or ascertainable (in the case of a measurement contract with quantities or schedules of rates) and are therefore ‘lump sum’ or entire contracts, in the legal sense”.
We said