Civil Engineering Reference
In-Depth Information
The termination provisions apply to all of the Options A-F, subject to the following
modifications for specific Options:
•
Option A (priced contract with activity schedule) inserts a clause 93.3 which states
thattheamountdueonterminationisassessedwithouttakinggroupingofactivities
into account.
•
Option C (target contract with activity schedule) inserts two sub-clauses. First,
clause 93.4 provides that on termination the Project Manager assesses the Con-
tractor's share after he has certified termination. His assessment uses, as the Price
for Work Done to Date, the total of the Defined Cost which the Contractorhas paid
and committed to pay for work done before termination. he assessment uses as the
total of the Prices the lump sum price for each activity which has been completed
and, for each incomplete activity, the appropriate proportion of the lump sum price
for the work that has actually been completed. Second, clause 93.6 provides that the
Project Manager's assessment of the Contractor's share is added to the amount due
to the Contractor on termination if there has been a saving or deducted if there is
an excess.
•
Option D (target contract with bill of quantities) inserts two sub-clauses. First,
clause 93.5 provides that on termination the Project Manager assesses the Con-
tractor's share after he has certified termination. His assessment uses as the Price
for Work Done to Date, the total of the Defined Cost which the Contractorhas paid
and committed to pay for work done before termination. The second sub-clause is
the same clause 93.6 as is used in Option C.
9.5 Repudiation and rescission
Notwithstandingtheabsenceinacontractofdetailedterminationprovisions,circum-
stances may arise in which a party is freed from future performance. The concepts of
repudiation and rescission are inextricably linked. Rescission is considered in more
detail in Section 10.2. In certain circumstances a material breach of contract by one
party may entitle the other party, the 'innocent party', to terminate the contract. Such
a material breach of contract is referred to as a repudiation and gives the innocent
party a choice. They can accept the repudiation and rescind the contract or, alterna-
tively, they may elect to ignore the repudiation and continue with the performance of
the contract. his option exists because, as stated by Lord Keith in
Woodar Investment
Development Ltd
v.
Wimpey Construction UK Ltd
(1980), the doctrine of repudiation
exists for the benefit of the innocent party. Whether the option is restricted in certain
circumstances is considered in Section 10.2.
If the repudiation is accepted, the acceptance should be communicated to the party
in breach. The method by which communication is made would appear to be imma-
terial, see
Monklands DC
v.
Ravenstone Securities
(1980).
The remedy that is open to an innocent party who elects to rescind, namely
damages, is considered at Section 10.4. Should the innocent party elect to ignore the
repudiation, they may be barred from relying upon the material breach at a later date.
It is difficult to generalize as to what conduct is, and what conduct is not, a repu-
diation. Not every material breach will constitute a repudiation, see
Blyth
v.
Scottish
