The ICE Conditions of Contract: Seventh Edition. Brian Eggleston CEng, FICE, FIStructE, FCIArb. bblackwell. Science

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1 The ICE Conditions of Contract: Seventh Edition Brian Eggleston CEng, FICE, FIStructE, FCIArb bblackwell Science

2 # Brian Eggleston, 1993, 2001 Blackwell Science Ltd Editorial Offices: Osney Mead, Oxford OX2 0EL 25 John Street, London WC1N 2BS 23 Ainslie Place, Edinburgh EH3 6AJ 350 Main Street, Malden MA , USA 54 University Street, Carlton Victoria 3053, Australia 10, rue Casimir Delavigne Paris, France Other Editorial Offices: Blackwell Wissenschafts-Verlag GmbH KurfuÈ rstendamm Berlin, Germany Blackwell Science KK MG Kodenmacho Building 7±10 Kodenmacho Nihombashi Chuo-ku, Tokyo 104, Japan Iowa State University Press A Blackwell Science Company 2121 S. State Avenue Ames, Iowa , USA The right of the Author to be identified as the Author of this Work has been asserted in accordance with the Copyright, Designs and Patents Act All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher. DISTRIBUTORS Marston Book Services Ltd PO Box 269 Abingdon Oxon OX14 4YN (Orders: Tel: Fax: ) USA Blackwell Science, Inc. Commerce Place 350 Main Street Malden, MA (Orders: Tel: Fax: ) Canada Login Brothers Book Company 324 Saulteaux Crescent Winnipeg, Manitoba R3J 3T2 (Orders: Tel: Fax: ) Australia Blackwell Science Pty Ltd 54 University Street Carlton, Victoria 3053 (Orders: Tel: Fax: ) A catalogue record for this title is available from the British Library ISBN Library of Congress Cataloging-in-Publication Data is available For further information on Blackwell Science, visit our website: First edition of The ICE Conditions Sixth Edition published 1993 Reprinted 1994 Second edition of The ICE Conditions Sixth Edition published 2001 under the title The ICE Conditions Seventh Edition Set in 10/12 Palatino by DP Photosetting, Aylesbury, Bucks Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall The Blackwell Science logo is a trade mark of Blackwell Science Ltd, registered at the United Kingdom Trade Marks Registry

3 Contents Preface Notes on the text ix x 1 Introduction Publication Policy Changes from the Sixth edition Major areas of interest 5 2 Definitions, interpretation and notices Introduction Identification definitions Contract documents Financial definitions Prime cost items and provisional sums Nominated subcontractors Works definitions Commencement and completion definitions Defects definitions Sections and parts of the works The site Contractor's equipment Interpretative rules Cost Communications Notices 25 3 The engineer and engineer's representative Introduction Duties and authority of the engineer Engineer to be named and chartered Engineer's representative Delegation by the engineer Assistants Instructions Impartiality 39 4 Assignment and subcontracting Introduction Assignment and subcontracting generally 42

4 iv Contents 4.3 Novation, assignment and subcontracting distinguished Collateral contracts and warranties Assignment in the Seventh edition Third party rights Subcontracting in the Seventh edition 50 5 Contract documents Introduction Construction of contracts Explanation and adjustment of documents Supply and copyright of documents Further drawings, specifications and instructions Delay in issue of further information Documents to be kept on site Permanent works designed by the contractor Responsibility for contractor designed works 70 6 Contractor's obligations/responsibilities for design and construction Introduction Design obligations, responsibilities and liabilities Contractor's general obligations Design responsibility Responsibility for site operations 80 7 Form of agreement and performance security Introduction Form of Agreement Performance security ICE Form of Default Bond Cost of the bond/non-provision of bond Dispute resolution upon security 91 8 Site conditions and sufficiency of tender Introduction Provision and interpretation of information Inspection of the site Basis and sufficiency of tender Adverse physical conditions and artificial obstructions Instructions and impossibility Introduction Instructions generally Impossibility generally Work to be to the satisfaction of the engineer Mode and manner of construction Delay and extra cost 125

5 Contents v 10 Programmes and methods of construction Introduction Programmes and method statements generally Clause 14 programmes Clause 14 method statements Supervision, setting-out and safety Introduction Contractor's superintendence Removal of contractor's employees Setting-out Boreholes and exploratory excavations Safety and security Care of the works and insurances Introduction Risks and insurances generally Care of the works Insurance of the works Damage to persons and property Third party insurance Accident or injury to work people Evidence and terms of insurance Statutes, street works, facilities and fossils Introduction Notices and fees New Roads and Street Works Act Patent rights and royalties Interference, noise and pollution Damage to highways Facilities for other contractors Fossils Clearance of site Returns of labour and equipment Materials and workmanship Introduction Materials and workmanship generally Quality of materials and workmanship Access to site Examination of work Removal of unsatisfactory work and materials Suspension of work Introduction Contractor's right to suspend 191

6 vi Contents 15.3 Suspension under clause Payment for suspension Suspension lasting longer than 3 months Possession of the site, commencement and rate of progress Introduction Works commencement date Start of works Possession of the site and access Time for completion Night and Sunday work Rate of progress and acceleration Extensions of time and liquidated damages for delay Introduction Extensions of time generally Liquidated damages generally Grounds for extension of time under ICE Seventh Conditions Procedures for extensions of time Liquidated damages for late completion Completion Introduction General meaning of completion Notification of substantial completion Certification of substantial completion Premature use by the employer Substantial completion of parts of the works Reinstatement of ground Outstanding works and defects Introduction Outstanding works and defects Searches and trials Defects correction certificate Urgent repairs Variations Introduction Variations generally Variations in the Seventh edition Valuation of variations by quotations Valuation of variations by rates/fair valuation Engineer to fix rates Dayworks 276

7 Contents vii 21 Claims and additional payments Introduction Legal basis of claims Common law claims Global claims Overheads, finance and interest charges Additional payment rules of ICE Conditions Property and materials Introduction Contractor's equipment and the like Vesting of goods and materials not on site Measurement of the works Introduction Quantities Correction of errors Measurements and valuations Increase or decrease of rate Daywork Method of measurement Provisional sums and prime cost items Introduction Provisional sums Prime cost items Design requirements Nominated subcontractors Introduction Objection to nomination Engineer's action on objection or determination Contractor's responsibility for nominated subcontractors Nominated subcontractor's default Provisions for payment Payment to nominated subcontractors Certificates and payments Introduction Monthly statements Monthly payments Late payments and under-payments Interest on overdue payments Minimum amount of certificate Final account Retention Correction and withholding of certificates 352

8 viii Contents Certification and payment notices Notice of intention to withhold payment Defaults and determination Introduction Termination generally Default of the employer Default of the contractor Settlement of disputes Introduction Housing Grants, Construction and Regeneration Act Avoidance of disputes and matters of dissatisfaction The engineer's decision Disputes Effect on contractor and employer Conciliation Adjudication Arbitration Witnesses Miscellaneous provisions Introduction Frustration/war clause Application to Scotland, Northern Ireland and elsewhere Tax matters Value added tax CDM Regulations Special clauses 406 Table of cases 407 Index 415

9 Preface At the Institution of Civil Engineers' launch of the Seventh edition of ICE Conditions the questions put to the presentation panel from the floor were more concerned with the logic of publishing a Seventh edition than with the contents. One strongly expressed view was that with the Institution's New Engineering Contract (now called NEC Engineering and Construction Contract) steadily gaining ground and recognition there was no point in continuing the publication of traditional ICE Conditions. It was suggested they were a relic of another age and after 50 years or so of use it was time for change. My own view is that not only is there room for both sets of conditions in the industry but there is need for both. It is a matter of horses for courses as to which type of contract is best for any particular project. The New Engineering Contract requires project management skills, high staffing levels and a prominent place on office desks. Traditional ICE contracts have been satisfactorily run for decades and in thousands by civil engineers practising their ordinarily professional skills, frequently with mud on their boots and with the Conditions rarely on the office desk. The strength of the Conditions is in their consistency and continuity and by any standards they must be regarded as one of the most successful standard forms ever published. I look forward to reviewing the Eighth edition in my retirement. Brian Eggleston April 2001

10 Notes on the text Format The format of most chapters is an introductory section followed by one or more sections with general information on the subject matter of the chapter and thereafter detailed analysis of the relevant clauses of the Conditions. Phraseology Rather than repeat throughout the book the full title of the Conditions ± the ICE Conditions of Contract, Measurement Version, 7th edition ± I use abbreviations where appropriate. Generally, when I refer to the Conditions I mean the Seventh edition and when I refer to ICE Conditions I mean the Seventh edition and its predecessors. References to the New Engineering Contract are intended as references to the NEC Engineering and Construction Contract. Capitals As a matter of style capital letters have been used sparingly. The result, I hope, is easier reading. However, it does mean that defined contractual terms such as the employer and the contractor appear in lower case except in quotations. Lists Bullet points are generally used for lists, but where the lists are of subclauses from the Conditions, letters are used. Text of the Conditions For commercial reasons it has not been possible to include the text of the Conditions in this book. Readers may find it helpful to have to hand a copy of the Conditions.