Exceptional Beyond the Control/ Unpredictable Natural Events - part 2

Serial of Posts in FIDIC, JCT, VOB, AIA, NEC, JBCC... Bespoke Contracts Forum

In search of a definition of Force Majeure 

These days, apart from saving people's lives, construction world is concentrated, as much as possible, on reducing the impact of the financial implications, of the Exceptional Unforeseeable Natural Disaster/Coronavirus Pandemic - in construction.

Building/Construction Federations are worried about penalties and damages to contractors (?!) and covering additional costs related to changes in the sites organization, Consulting Federations potentiate relaxed payment terms to consultants, Construction Lawyers, with exceptions, generally follow existing standards that are not favorable to contractors in the circumstances.

All differing opinions stem from the undefined definition of Force Majeure, which as such exists in the FIDIC contract forms, and are understandable considering on whose positions stay. 

What is the Central Point of the any Exceptional Unforeseeable Natural Disaster - Force Majeure? Its' a Cost.

Then, let's start with the history in order to understand FM and come to relevant starting point.

27801484 FORCE MAJEURE CIOB 

Tremendous exploratory work (1979) by P E Healey, BScBA MIOB AIQS is the x-ray of the Force Majeure, as such, from 1831 to 1968(1977), until fifty years ago. 

Force Majeure in the last fifty years

If you read and participate in our Forum, you are on the right place. Regarding Force Majeure.

As we all see, there are tens of articles, mostly from construction lawyers, then consulting firms, even government departments, exploiting commercial consequences of the coronavirus unwonted effects. On projects, caring primarily for employers, with few exceptions. All according to imprecise and confusing rules.

We go the other way. We look for a solution appropriate to today's times and the Exceptional Unforeseeable Natural Events that are happening to us. For a solution that is fair to all participants in the process of creating a project. For all, not for few.

Hopefully everyone read the article - 27801484 FORCE MAJEURE CIOB.

It covers more than a century of the life and development of the term Force Majeure. Until fifty years ago. Fifty years within which a lot happened. It's time some theories to be changed.  

Till next time, keep safe. Stay at Home, for now!

Force Majeure Parameters

What are the parameters, in brief, of an important question that is the subject of observation?

a) New definition of the Exceptional Unforeseeable Natural Events or Force Majeure, based on the historical and dominant events in the last 50 years,

b) Applicable to all major standard forms of contract in the world's construction industry,

c) Short and precise description,

d) With special emphasis on Floods, Fires, Hurricanes, Earthquakes, Local Epidemics and Pandemic. 

e) Equitable distribution of the risk, taking in account the roles of the Employer and the Contractor in the economy of a countries,

f) Extension of Time for the Contract is inevitable,

g) In case of making good physical loss and repairing damage, such making good and/or expense and/or loss shall be measured and valued and added to the Contract Value,

h) In case of suspension, Contractor, with optimum power and expense, to preserve and safeguard the site.

g) Employer, except mentioned, has no other obligation towards Contractor during suspension, except possible contractor's remobilization costs. 

This is good ground for the Continental Construction Industry Federations to think and be involved in making contract rules that defend their members.

Don't cut the branch you're sitting on...

Like in a game of chess, you still can use old theory and win against brand new way of thinking and approach with modern openings. I believe the same is with old German DIN standards which I started with and continued equivalent at the time in Zimbabwe then, with JCT 1980/92 and SMM7.

But now, we experience new challenge. Especially those who are on the contractually "weaker" side - Contractors. 

That is the reason why I want to point out the contractual illogicalities that exist from the past, and to the detriment of the contractors.

Now is the time, and we currently have enough time, to think about how to equate the position of contractor with the rights given to the employer/owner by the rules of the game, which has been determined by someone else for years. To the detriment of the contractors and in favour of the owner. At least in some segments, this is the contractors' right to the costs, in the current pandemic situation.

Federations representing construction companies and their workers should be encouraged. Many members of these governing bodies read these lines, because they are members of my Forum. It is their turn to fight for the equal and just builders’ rights.

Contractors' Associations Councils - Wake up! Do not sleep! The show is over!

The Confederation of International Contractors' Associations (CICA),

The International Federation of Asian and Western Pacific Contractors’ Associations (IFAWPCA),

European Construction Industry Federation (FIEC),

European International Contractors (EIC),

The International Association of Professional Contractors,

The African Federation for Construction Contractors Associations (AFCCA), 

Latin-American Federation of Contractors' Associations (FIIC),

Associated General Contractors of America (AGC), 

The Australian Constructors Association (ACA),

The GCC Contractors' Association (UCA) and others.

You, as the representatives of the global construction and building contractors, wake up, not "cry", protect the right of those who suffer to make the world a better place.

You are the power that drives the world, not the makers of centuries unfair construction contracts forms! 

The Contract Rules have to be changed and be clear in equitable distribution of Risks and Obligation between contracting parties. Now, that is not the case. That's the reason why employers stand strongly in maintaining the status quo.

All above was Part 2 of

What is the Central Point of the any

Exceptional Beyond the Control/ Unpredictable Natural Events - EBUNE?