Construction law is a branch of law that deals with
matters relating to building construction, engineering and related fields. It is in
essence an amalgam of contract law, commercial
law, planning law, employment
law and tort. Construction
law covers a wide range of legal issues including contract, negligence, bonds
and bonding, guarantees and sureties, liens and other security interests, tendering, construction
claims, and related consultancy contracts. Construction law affects many
participants in the construction industry, including financial institutions, surveyors, architects, builders, engineers, construction workers, and planners.
Specific practice areas
Construction law builds upon general legal principles and
methodologies and incorporates the regulatory framework (including security of
payment, planning, environmental and building regulations); contract
methodologies and selection (including traditional and alternative forms of
contracting); subcontract issues; causes
of action, and liability, arising in contract, negligence
and on other grounds; insurance and performance security; dispute resolution
and avoidance.
Construction law has evolved into a practice discipline in
its own right, distinct from its traditional locations as a subpractice of project
finance, real estate or corporate law. There are often strong
links between construction law and energy law
and oil and gas law.
Country specific practice
United Kingdom
In the United Kingdom, there has been an active Society of
Construction Law since 1983, and there
is now a European Society of Construction Law, and Societies of Construction
Law in Australia,
Hong Kong,
Singapore,
and the UAE. The Joint Contracts Tribunal works on the most
popular type of standard construction contracts.
Canada
United States
Standard form contracts promulgated by the American Institute of Architects
have been the standard in the industry; the organization first published a form
in 1888, and has over 100 forms, with revisions to selected forms happening
typically every ten years. However, these forms have been criticized as unfair
to contractors in favor of owners and architects, which has led to the
publication in September 2007 of a set of 70 forms by the Associated
General Contractors of America called ConsensusDOCS, in which 23 trade
associations participated. Among the 1996 forms were Owner-Design/Builder
Agreement, AIA Document A19.
South Africa
The standard form construction law contracts, in use in South
Africa, include FIDIC, NEC, GCC and JBCC agreements.
Construction contracts
Although no special contract formalities are required, it is
normal practice to use standard-form contracts such as, in the UK, the JCT
form. In order to expedite dispute resolution, standard forms usually provide
for arbitration
by a "board of arbitration" or professional arbitrator. Construction
law has been affected by the requirements in public contracts, which include surety
bonds and other procedures. In private contracts, the requirements are
negotiated between the parties. As of 1998, the principles of construction law
were "well established". Remedies for breach of contract are the same as in the
ordinary law, and include damages, repudiation, rescission,
and specific performance.
Deviation
When a plan has been adopted for a building, and in the
progress of the work a change is made from the original plan, the change is
called a "deviation". When the contract is to build a house according
to the original plan, and a deviation takes place, the contract shall be traced
as far as possible, and the additions, if any have been made, shall be paid for
according to the usual rate of charging.
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