Practical Law

When a project goes so poorly that an employer feels obliged to terminate its main contractor, the employer will often take an assignment of various sub-contracts. But what exactly does it mean to “assign a sub-contract”? Of course, the employer may also claim against the main contractor for delay damages, additional costs to complete and … Continue reading Assignment of sub-contracts – benefit and burden, risk and reward in the TCC →

The courts enjoy a fairly regular diet of cases concerning the validity of calls on performance bonds and similar securities. I have blogged on this before, in early 2017. Bond issuers who are reluctant to pay out on a bond will raise either: A formal defence, for example that the demand is invalid because it … Continue reading Assignment and performance bonds: Sumitomo Mitsui v Euler Hermes →

The TCC does not like blocking ongoing adjudications or interfering in their conduct. To date, it has only done so in a few unusual cases. Recently, however, it has found a good reason to prevent an adjudication from proceeding, which could be of very wide application.

The beauty of an on demand bond or standby letter of credit is that the beneficiary can call the security instrument and pocket the money without having to prove that the contractor (or sub-contractor) is actually in default or owes the money. It is a separate, independent agreement between the beneficiary and the provider of … Continue reading “Mens rea” in calls under on demand security instruments →

The Supreme Court has handed down judgment in the cases of Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Ltd v Beavis. It was not just the construction sector that waited patiently and speculated cautiously as to what the court would do with the rule against penalties. Would it confirm the current rule, … Continue reading Out of chaos arises order: Supreme Court confirms the rule against penalties in El Makdessi and ParkingEye appeals →

Two new cases on penalties have revived two old concerns. Do the courts interfere too much with the validity and operation of liquidated damages clauses? And if they do, is it always the employer that suffers? 

It is well recognised that because of its consensual foundation, arbitration can be difficult as a means of settling complex multi-party and multi-contract disputes. This has historically been a problem for construction practitioners and clients because an ever increasing proportion of large disputes are complex and involve multiple contracting parties.