Assegnment - Final PDF

Commercial Management Practice
&
Law of Contract
Professional Diploma in Quantity Surveying

2019
B.P.Dishan Tharindu
CL/PRDQTS/16/11
Professional Diploma in Quantity Surveying 2019
Commercial Management Practice & Law of Contract -ICBT Campus
Programme Professional Diploma in Quantity Unit 07 JACS Code M222
Surveying
Module Number PDQS - R -07 Module Title Commercial management practice

and Law of Contract
Credit Value 15 Module Level H2 Module Value 1.0
Assessment Final Assessment Assessment Weighting 100%
Assignment Title Commercial Management Practice & Law of Contract
Lecturer Mrs. Harshi Madubashini
Student Name B.P.D. Tharindu Student Number CL/PRDQTS/16/11
Handed Over on Due Date
Date Submitted 28/12/2019 Pass/ Re-

Submission
Course Leader Mrs. Harshi Madubashini
Module Leader Mrs. Harshi Madubashini
Internal Verifier Ms. Kavitha Kajendran Date Verified
Developed by The Department of Engineering and Construction of ICBT Campus
Final Grade Fail Pass Merit Distinctio

n
Initial Assessor
Assessor’s Signature Date

Assessed
2nd Assessor
Comments
B.P.Dishan Tharindu
CL/PRDQTS/16/11
Table Of Contain
Item Page
Task 01 1.0 Tort 01
1.1 Types of Torts 01
1.1.1 Intentional Torts 01
1.1.2 Negligent Torts 01-02
1.1.3Strict Liability Torts 02-03
1.2 Tort law in Construction Industry 03-04
Task 02 2.0 Construction Contract
2.1 Nature of Construction Contract 06
2.1.1Parties involve in construction project
2.1.1.1 The Employer or Client 06
2.1.1.2 The Engineer or Consultant 07
2.1.1.3 The Contractor 07
2.2 Type of Construction Contracts
2.2.1 Lump Sum Contracts 07
2.2.2 Unit Price Contracts 08
2.2.3 Cost Plus Contracts 08
2.2.4 Time & Material contracts 08
2.3 Legal Principles and Requirements of Contracts 09
2.4 Case 09
2.5 Standard Commercial Management Practice and Project 10
Administration Procedure
2.6 Contractual Liabilities and Legal Obligations
2.6.1 The Employer 10-12
2.6.2 Consultant 12-13
2.6.3 The Contractor 14-17
Task 03 3.0 Alternative Dispute Resolution (ADR)
3.1 Types of ADR method 18
3.1.1 Negotiation 18
3.1.2 Conciliation 18-19
3.1.3 Mediation 19
3.1.4 Arbitration 19
3.2 ADR Advantages and Disadvantages
3.2.1 Advantages 20
3.2.2 Disadvantages 20
Task 04 4.0 Health Safety and Welfare Law 21
4.1 Health and Safety at Work etc. Act 1974 21
4.2 The Management of Health and Safety at Work Regulations 21
1999
4.3The Construction (Design and Management) Regulation 2007 22
4.4 The methods to avoid health and safety law issues 22-23
B.P.Dishan Tharindu
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Introduction
This assignment About Lecture of “Commercial Management Practice & Law of Contract”
conducted by Mrs. Harshi Madubashini- ICBT Campus Colombo. I would like to Thanks
about this subject knowledge to them.
This Assignment will explain and explore about
 Effect of the law of tort on the construction industry

 Identify and analyze the nature, types, legal principles and requirements of
construction contract
 Standard commercial management practice and project administration procedure to
minimize the issues
 Contractual liabilities and legal obligations of the parties
 Alternative Dispute Resolution (ADR)
 Legal requirement of occupational health and safety
B.P.Dishan Tharindu
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Task 01
01. Tort:-
Tort is civil wrong and it is way to jurisdiction of harm of civil wrongs. It is imposed on a
person to act with care towards others by law. Tort law covers most of civil suits.
This law is to redress a wrong to a person by any others and way to awarding compensation
for damages.
“Tort laws are laws that offer remedies to individuals harmed by the unreasonable
actions of others. Tort claims usually involve state law and are based on the legal
premise that individuals are liable for the consequences of their conduct if it results in
injury to others” (McCarthy & Cambron-McCabe, 1992).
In civil court most of claims arise with contractual disputes inquire under the law of tort.
Provide relief for the damages incurred and discourage others from committing the same
harms is the primary aim of Tort Law. The injured person may sue for an injunction to
prevent the continuation of the tortious conduct or for monetary damages.
This alleged party if convict by law, who should pay compensation to innocent (Claimant)
party for their losses of,
 Detriment of Earning Ability

 perception and sorrow
 Treatment/Medical Expenses
When adjudicate of above losses concern present loss and also future losses.
Three elements must be established in every tort action:
 First,
The plaintiff must establish that the defendant was under a legal duty to act in a
particular fashion.
 Second,
The plaintiff must demonstrate that the defendant breached this duty by failing to
conform his or her behavior accordingly.
 Third,
The plaintiff must prove that he suffered injury or loss as a direct result of the
defendant's breach.
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Main consideration of torts
 Trespass
 Assault
 Battery
 Negligence
 Products liability
 Intentional infliction of emotional distress
1.1 Types of Torts:-

When concern with English Law tort can differentiate main three categories as followings
 Intentional
 Negligence
 Strict Liable
1.1.1 Intentional Torts

Any harmful act implements for harm to a person by another person deliberately. That kind
of act falls under the Intentional Law.
Common intentional torts are;
 Battery
 Assault
 False imprisonment
 Trespass to land
 Trespass to chattels
 Intentional infliction of emotional distress.
International Torts are those wrongs which the defendant knew or should have known would
occur through their actions or inactions.
1.1.2 Negligent Torts

Negligent tort is common type concern with torts. Most cases under the prevalent type. There
is no any deliberate action done by alleged party. But some action indirectly effect in
harmfully.
A person who is negligent did not intend to cause harm, but they are still held legally
responsible because their careless actions injured someone. Negligent torts are the most
prevalent type of tort.
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Negligent torts are not thoughtful actions, but instead present when an individual or entity
fails to act as a reasonable person to someone whom he or she owes a duty to. The negligent
action found in this particular tort leads to a personal injury or monetary damages.
The elements which constitute a negligent tort are the following:
 A person must owe a duty or service to the victim in question

 The individual who owes the duty must violate the promise or obligation
 An injury then must arise because of that specific violation
 The injury causes must have been reasonably foreseeable as a result of the person's
negligent actions.
Above mentioned elements may also say as;
 Duty of Care
 Breach of Duty
 Damage or Injury
When it says briefly, Negligent Torts occur when the defendant's actions were unreasonably
unsafe.
1.1.2 Strict Liability Torts

Strict liability applies when a defendant places another person in danger, even in the absence
of negligence, simply because he is possession of a dangerous product, animal or weapon.
The plaintiff need not prove negligence.
1.2 Case
The contractor made an error in pricing in a tender for 46 houses. As a result of the error, the
price quoted had a discrepancy of 68,000.00 Rs/= per house. On discovering the error, the
contractor sought to be released from the contract.
Assumption: - contractor Sought to be release from contract (Post Contract Period)
This is not an arithmetical error (not amount but rate)
 Type of Tort:-
This issue is under negligent Law.
 Facts:-
Agreed Price
Agreed Agreement (Specification/Biding data/contact data… etc.)
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 Issue:-
Contractor was unable to bid within specification and bidding data.
 Principle:-
Negligence provided data.
 Outcome:-
This is a mistake of contactor but not deliberate thing. Client can claim from Bid
Bond (if expired, if have contract agreement, can claim from Performance bond.)
1.3 Tort law in Construction Industry

Tort is a collection of civil law remedies entitling a person to recover damages for loss and
injury which have been caused by the actions, omissions or statements of another person in
such circumstances that the latter was in breach of a duty or obligation imposed at law.
In construction industry there are more stakeholders. So there are more relationships among
them
- Client vs. Consultant
- Client vs. Main Contactor
- Client vs. Nominated Suppliers
- Client vs. Nominated sub-contractors
- Main contractor vs. Supplies
- Main Contractor vs. Sub-Contractors
If the one of the parties to a contract fails to perform as required, this may constitute a breach
of contract. A breach may entitle the innocent party to make a claim for damages for the
losses it has suffered.
1.3.1 Nature
Every agreement has Liability and obligation of each party and responsible persons (by law
and by power of attorney). The person who responsible as in agreement, if that person
breathes that will cause of tort.
There must be wrongful act committed by a person (who responsible in contract agreement)
 The Wrongful act must give rise to a legal damage or actual damage
 The wrongful act must be of such nature as to give rise to a legal remedy in the form
of an action for damage
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In Construction field two parties should follow agreement, if any party field to fulfill the
agreement other party can takes necessary action against to the party who breach the contact.
This legal procedure under law of tort.
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Task 02
2.0 Construction Contract
2.1 Nature of Construction Contract
Construction Contracts are defined as legally-binding agreements within which the structure,
details, and identification of both commitments and parties involved in a construction project
are illustrated.
“Contract” means the Contract Agreement, the Letter of Acceptance, the Letter of
Tender, these Conditions, the Specification, the Drawings, the Schedules, and the
further documents (if any) which are listed in the Contract Agreement or in the Letter
of Acceptance.
(FICID Red Book Clause No 1.1.1.1)
Construction Industry is world second largest industry. Construction industry is based on

Time, Quality and Cost of the project. To maintain Time, Quality and Cost of a project the
contribution of the parties who are involved to the work of the project should work
successfully. There are three parties involved in Construction Project,
They are;
 Client
 Consultant
 Contractor
2.1.1 Parties involve in construction project

2.1.1.1 The Employer or Client
The client is defined as the individual who has procured a construction project, which means
that they have set forth provision means ranging from funding to materials to the second
party in order for the construction project to be implemented with the intention of
completion.
“Employer” means the person named as employer in the Appendix to tender and the
legal successors in title to this person.”
(FIDIC Red Book clause No 1.1.2.2)
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2.1.1.2 The Engineer or Consultant
The contractor is defined as the party who planning, managing and supervising of the project
to fulfill the client requirement within client budget.
“Engineer means the person appointed by the Employer to act as the Engineer for the
purposes of the Contract and named in the Appendix to tender, or other person
appointed from time to time by the Employer and notified to the Contractor.”
2.1.1.3 The Contractor

The contractor is defined as the entity responsible for the provision and completion of the
construction effort will have received goods, services, or monies whose delivery is contingent
on the completion of the construction.
“Contractor” means the person(s) named as contractor in the Letter of Tender

accepted by the Employer and the legal successors in title to this person(s)”
2.2 Type of Construction Contracts

There are more types in construction contract
1. Lump Sum Contract
2. Measure and Pay (Unit Price) contract
3. Cost Plus contract
4. Time & Material Contracts
2.2.1 Lump Sum Contracts

In this type of contract, the contractor assumes more of the risk. Lump sum contracts specify
a total fixed price that will be paid for all construction work. In this type of agreement,
owners agree to pay this fixed price and the contractor agrees to complete the project for this
fixed price. The contractor takes on more risk in this situation because there is always a
possibility of potential problems and higher prices. In order to protect the contractor, some
lump sum contracts contain allowances which designate certain costs to the owner if the
contractor goes over budget. Incentives can also be included for contractors if they finish a
project early/below budget, as well as penalties if they finish a project late. This type of
contract is most commonly used when the owner wants to evade dealing with change orders
for unspecified work.
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2.2.2 Unit Price Contracts
In this type of contract, both parties assume little risk. Unit price contracts involve the
contractor determining a specific price for a certain task. After this, the owner must agree to
the pay that price for the number of units the contractor provides. There are benefits for both
the owner and the contractor in a unit price contract. Owners benefit because they can easily
verify that they are being charged reasonable rates and contractors benefit because they don’t
have to worry about inaccurate estimation for certain tasks. This type of contract is most
commonly used on repetitive or public works projects.
2.2.3 Cost Plus Contracts

In this type of contract, the owner assumes most of the risk. Cost plus contracts designate the
buyer to pay the costs of construction, purchases, and other expenses produced from
construction activity. There are many variations of cost plus contracts including; cost plus
fixed percentage, cost plus fixed fee, cost plus with guaranteed maximum price contract, and
cost plus with guaranteed maximum price and bonus contract. These variations can help to
protect and lower risk for the owner. This type of contract is most commonly used when the
scope hasn’t been clearly defined. It is also important to note that this type of contract will
require more supervision and tracking.
2.2.4 Time & Material contracts

This type of contract, the owner assumes more of the risk. Time & Material contracts involve
the owner paying for the time and materials spent on a project. This usually involves the
owner and contractor agreeing upon pay rates and any expenses that might possibly come up
over the course of a project. The owner assumes more of a risk in this situation because they
are responsible for paying for extra or overtime costs. In order to protect the owner, time &
material contracts will usually establish a maximum price clause. This type of contract is
most commonly used when the project scope is small or unclear.
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2.3 Legal Principles and Requirements of Contract
Every contact should have legal principles and requirement according to the mention law in
contract.
In construction contract must contain with
 The Contract Agreement (if any),

 The Letter of Acceptance,
 The Letter of Tender,
 The Particular Conditions,
 The General Conditions,
 The Specification,
 The Drawings, and
 The Schedules and any other documents forming part of the Contract.
The contact will handle according to the Particular and General Condition.
2.4 Case
The Claimant agreed to renovate two houses and the guard room for the defendant within six
months‟ time and agreed to pay 2 Million after completion. Claimant completed the work in
eight months but defendant refused to pay whole amount in the ground complaining that
claimant failed to provide the sufficient care and failure to complete on time
 Facts:-
Renovate two houses and the guard room within 06 months cost of 2 Million
 Issue:-
Work Completed but
Delay of work completion
 Principles:-
Only breach the second Clouse, there are no breach of work completion
Also there are no any specific conditions for delay of work. Hence defendant should
pay to the claimant the payment after deduction some amount for delay period
 Reference:- FIDIC Red Book General Condition
Delay Damages
“If the Contractor fails to comply with Sub-Clause 8.2 [Time for Completion], the
Contractor shall subject to Sub-Clause 2.5 [Employer’s Claims] pay delay damages to
the Employer for this default.
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These delay damages shall be the sum stated in the Appendix to Tender, which shall
be paid for every day which shall elapse between the relevant Time for Completion
and the date stated in the Taking-Over Certificate. However, the total amount due
under this Sub-Clause shall not exceed the maximum amount of delay damages (if
any) stated in the Appendix to Tender.”
Clause 8.7
2.5 Standard Commercial Management Practice and Project Administration Procedure

In construction, commercial management generally refers to the overseeing and management
of a project's finances as it progresses. It can also refer to the long term management of
business opportunities that will enable the organization to develop and grow.
The commercial manager must maximize business potential in terms of growth and
profitability, while monitoring and controlling internal processes as well as managing
external relationships with subcontractors, clients, and so on.
Due to the complexity of valuing and costing construction projects, commercial management
has developed into a technical discipline, most commonly undertaken by quantity surveyors.
Often quantity surveyors progress to become commercial managers, with responsibility for a
commercial team and reporting to the project manager. A successful construction project is
one that is delivered on time, to budget and at the required quality. Commercial managers
balance these drivers with longer-term strategy of the business and the client's own
commercial drivers. If a project achieves, or exceeds, the anticipated return for the business,
with the client relationship maintained or improved, then the commercial management
strategy will be seen to have been a success.
2.6 Contractual Liabilities and Legal Obligations

2.6.1 The Employer
In the construction industry the role of a client is very important because it is exciting and
creative but also can be shocking when the project is finished and it becomes apparent. For
that reason it is very important that the client should be;
 Aware with the design process and should inspecting drawings as they get developed.
 Aware whether his requirements are fulfilled
 Aware whether the construction is sustainable
 Aware is design comply with the health, safety and welfare of the public around and
the end users
 Check whether how the asset will run and how much it will cost to run.
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The client is responsible for the completion of project from the initial idea to the finishing.
According to Unique Glass Factory incident; the client (Unique Glass Factory) needed the
project to be completed within 10 months period of time therefore he has gone for the design
and builds procurement method. The client hasn’t supplied additional information of the
project as this is not a normal construction project.
When constructing a glass plant house and the plant building for the glass factory there are
some special specification. But in this situation the client hasn’t played his role well. If he
provided the additional information to the contractor he doesn’t have to cause problems to the
initial design of the contractor.
There is also an Extra Work which client didn’t mentioned earlier in this project which is
constructing a the tank farm but the contractor has raised an objection telling that he is not
entitled to do that work.
Because of these reasons a dispute has raised between these two parties. In this case if the
client had played his role as the employer properly by giving his requirements and the
specification with all the additional information to the client this dispute won’t arise to both
the parties.
Clauses
 It is Employer’s duty to provide all access to the site and possession of all parts of site
within 14 days from the letter of acceptance the time to the contractor.
FDIC Red Book Clause No 2.1
 If the Contractor suffers delay or cannot afford the Cost as a result of a failure by the
Employer to give any such right or possession within such time, the Contractor should
give a notice not delay within 28 days to the Engineer to;
o Ask any extension of time for any such delay, if completion is or will be
delayed
o Ask for include payment of any such Cost plus reasonable profit in the
Contract Price.
And the client entitled to pay for it.
FDIC Red Book Clause No 2.1 and sub-clause No 19.1
In here in the given construction, the dispute has arisen due to the negligence of the
employer mainly, because when variations are added to the construction work, the
employer is entitled to pay for them according to the above mentioned clauses in the
FIDIC.
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 It is the responsibility of the employer to provide reasonable assistance to the
contractor with the request of contractor for the works like
o Getting permits, approvals and license regarding the work in the contract for
the delivery of goods for the works in the contract including clearance through
customs.
o Getting copies of the laws of the country regarding the work in the contract
FDIC Red Book clause 2.2
 It is the responsibility of the employer to ensure the health and safety of persons on
the site in co-operation with the contractor.
FDIC Red Book clause 2.3 and SBD-2 clause 2.3
 It is the responsibility of the employer or the client, to make the financial

arrangements within 28 days after receiving the payment request from the contractor
with reasonable evidence that financial arrangements have been made and are being
maintained which will enable the Employer to pay the Contract Price.
FDIC Red Book clause 2.4 and SBD-2 clause 2.4
 If the employer or the client is entitled for a payment under the condition of the
contract regarding an extension of the notification period, it is the responsibility of the
employer to give a notice to regarding those claims to the contractor.
FIDIC Red Book Clause 2.5 and SBD-2 Clause 2.4
2.6.2 Consultant
The consultant is an experienced person who is appointed by the employer. He is responsible
for;
 Administering
 Supervising the execution of the work
This person may be an engineer or an architect or any other professional person who is
experienced in construction industry well. In the FIDIC and the SBD document the person
appointed by the employer, who is referred as the “engineer”.
Most of the clients don’t have any knowledge regarding the construction industry to fulfill the
requirements therefore they hire the construction consultant.
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The construction consultant’s role is to represent the client and achieve the client’s
requirement which the client expect from the contractors. The consultant is the worth for
money bargaining process, help to identify the potential construction problems in the design
and construction stage. As the consultant represents the client who is in the independent
position of suggesting time saving and cost saving options.
As above mentioned reasons may help the client overcome many issues regarding
construction industry. According to the FIDIC the consultant or the engineer who is
appointed by the client does not have the authority to make amendments to the contract.
Clauses in FIDIC Red Book
 The engineer/consultant does not have the authority to make amendments. If any
change needs to be done, it is the responsibility of the consultant/engineer has to take
the approval from the employer.
Clause 3.1
 The consultant/engineer has the authority to appoint assistants who have the necessary
experiences in order to check the quality of the works, plant and materials, etc.
Clause 3.2
 It is the responsibility of the consultant/engineer to provide the contractor necessary

and additional details to the contractor at any time for the execution of the
construction works and for remedying the defects.
As the consultant represents the client, it is the responsibility of the

consultant/engineer of suggesting the client/employer, time saving and cost saving
alternatives.
 It is the responsibility of the consultant to administer the contract work, inspecting the
materials, plant, and to check whether the laborers who are working have the
necessary competencies to perform the task that they are assigned to.
 It is the responsibility of the client to be in alert, whether the construction works that
is going on is satisfying the requirements of the client/employer.
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2.6.3 The Contractor

The building contractor who is a person or a firm consists of a team of all the required
professionals together. It is an organization that engages in planning, developing and
coordinating the project activities. The building contractor plans the way to carry out the
construction project from start to finish. The building contractor is responsible for hiring,
supervising, payments for workers and also obtaining materials needed for the project
according to the specifications, using the service of suppliers. The responsibility of building
contractor is completing the construction project according to the rules and regulations
governing within the country and he also responsible for maintain the Time, Quality and
Cost. The contractor should obtain the entire necessary license and permit for the required
objects to start the building project.
Clauses in FIDIC Red Book
 It is the responsibility of the contractor design (if specified in the contract), execute
and complete the work successfully according to the contract, with the instruction of
the consultant/engineer, and treating the defects.
Clause 4.1
 The Contractor is responsible for the adequacy, stability and safety of all Site
operations and of all techniques of construction.
Clause 4.1
 The Contractor is responsible to submit the details of the works and arrangements
methods which contractor proposes to use for the execution of the works, when
required by the consultant/engineer. No significant alteration to these arrangements
and methods shall be made without this having previously been notified to the
engineer/consultant.
Clause 4.1
 It is the responsibility of the contactor to submit to the Engineer/consultant the “as-

built” documents and operation and maintenance manuals in accordance with the
Specification and in sufficient detail for the Employer to operate, maintain, dismantle,
reassemble, adjust and repair this part of the Works.
Clause 4.1 sub-clause (d)
 It is the responsibility of the contractor to obtain a security performance for proper

performance, in the amount and currencies stated in the Appendix to Tender.
Clause 4.2
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 The Contractor is responsible to deliver the Performance Security to the Employer
within 28 days after receiving the Letter of Acceptance, and should send a copy to the
Engineer/consultant.
Clause 4.2
 According to FDIC Red Book clause 4.2, the Contractor is responsible to ensure that
the Performance Security is valid and enforceable until the Contractor has executed
and completed the Works and remedied any defects.
Clause 4.2
 The Contractor is responsible for the acts or defaults of any Subcontractor, his agents
or employees, as if they were the acts or defaults of the Contractor.
Clause 4.4
 It is the responsibility of the contractor to co-operate with the employer, persons

appointed by the employer, engineer/consultant and personnel of any legally
constituted public authorities, who may be employed in the execution on or near the
Site of any work not included in the Contract.
Clause 4.6
 The Contractor is responsible to set out the Works in relation to original points, lines
and levels of reference specified in the Contract or notified by the
Engineer/consultant. The Contractor is responsible for the correct positioning of all
parts of the Works, and shall rectify any error in the positions, levels, dimensions or
alignment of the Works.
Clause 4.7
 Sometimes the employer might have done some mistakes in some specified field of
the contract in such situations employer is responsible, however it is also a
responsibility of the contractor to put their effort to verify the accuracy before they are
used.
Clause 4.7
 According to FDIC Red Book clause 4.8, the contractor is responsible to comply with
all the required health and safety procedures and regulations. It is the responsibility to
take care for the safety of all persons entitled to be on the Site and to use reasonable
efforts to keep the Site and Works clear of unnecessary obstruction so as to avoid
danger to these persons, providing fencing, lighting, guarding and watching of the
Works until completion.
Clause 4.8
 It is the responsibility of the contractor to assure the quality of the work of the
contract according to the expected standards in the contract. Details of all procedures
and compliance documents should be submitted to the Engineer/consultant for
information before each design and execution stage is commenced.
Clause 4.9
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 The contractor is responsible to place the bid price on the data necessary information,
inspections and satisfying himself to the correctness and the sufficiency.
Clause 4.11
 If and to the extent that the Contractor encounters physical conditions which are
Unforeseeable, it is the responsibility of the contractor to give such a notice to the
consultant/engineer, that the project will suffers delay and/or incurs cost due to these
conditions.
Clause 4.12
 The Contractor is responsible to bear all costs and charges for special and/or
temporary rights of-way which he may require, including those for access to the Site.
The Contractor shall also obtain, at his risk and cost, any additional facilities outside
the Site which he may require for the purposes of the Works.
Clause 4.15
 The Contractor is responsible for packing, loading, transporting, receiving, unloading,

storing and protecting all Goods and other things required for the works.
Clause 4.16
 The Contractor is responsible for all contractors’ equipment when brought on to the
site; contractor’s equipment shall be deemed to be exclusively intended for the
execution of the works.
Clause 4.17
 It is the responsibility of the contractor to take the necessary steps to protect the
environment.
Clause 4.18
 The Contractor is responsible for the provision of all power, water and other services
that he may require.
Clause 4.19
 If the employer gives some employer’s equipment available for the use of the
contractor, the contractor is responsible for that equipment.
Clause 4.20
 The contractor is responsible to provide the monthly reports for the

engineer/consultant and to the employer regarding the progress of the construction
works and other relevant documents.
Clause 4.21
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 Contractor is responsible for keeping unauthorized persons off the site and the
authorized persons shall be limited to the contractor’s personnel and the employer’s
personnel and to any other personnel notified to the contractor, by the employer or the
engineer/consultant, as authorized personnel of the employer’s other contractors on
the Site.
Clause 4.22
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Task 03
3.0 Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR) provides a confidential and alternative method of
tackling legal disputes which avoids going to court.
When it considering about alternative Dispute Resolution.
3.1 Types of ADR method

 Negotiation
 Conciliation
 Mediation
 Arbitration
3.1.1 Negotiation
Negotiation is the most direct method for resolving disputes is for the parties to work out
their own differences. It is a voluntary process by which parties attempt to reach a mutually
satisfactory agreement through informal and unstructured discussions. Successful
negotiations usually focus on problem solving and trying to satisfy both parties' interests
without determining who is right and who is wrong.
In the process of negotiation;
 The parties remain in control of the outcome

 No result is imposed on the parties, and they are free to walk away from the process at
any time.
 A neutral third-party is usually not present
 Participants often employ attorneys trained in problem-solving to represent their
interests in negotiation (this is not essential)
Negotiation is especially valuable in situations where future interaction between the parties is
desirable because negotiation is less confrontational than litigation and helps restore, preserve
or strengthen the parties' business relationship.
3.1.2 Conciliation
Conciliation is another dispute resolution process that involves building a positive
relationship between the parties of dispute. It is basically different than mediation and
arbitration in several respects. Conciliation is a method Employed in civil law countries (like
Italy.
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The conciliation is typically employed in labour and consumer disputes. The “conciliator” is
an impartial person that assists the parties by driving their negotiations and directing them
towards a satisfactory agreement unlike arbitration. In that conciliation is a much less
adversarial proceeding and it seeks to identify a right that has been violated and searches to
find the optimal solution
3.1.3 Mediation
Mediation is similar in many ways to negotiation. In general both methods are;
 Private
 Voluntary
 Informal
The focus in both is on problem-solving rather than on determining who is right and who is
wrong, and the parties themselves decide the outcome.
In mediation a neutral third party is chosen by agreement to help the parties resolve the
dispute. The mediator listens to each side's problem in an informal setting and helps the
parties come up with ideas for resolving the dispute. Also the mediator encourages each party
to attempt to understand and evaluate the interests of the other party, and he or she generally
does not judge the strength of either side's case. Although he or she has no authority to
impose an outcome on the parties if they fail to reach agreement and both sides are free to
walk away from the process at any time.
3.1.4 Arbitration
In arbitration, a dispute is submitted to one or more impartial persons, usually experts in the
construction field, who decide the outcome. The arbitrator's decision is private and binding
unless the parties have agreed to an advisory opinion. In binding arbitration, the arbitrator's
decision may be appealed to court, but an arbitrator's decision can be reversed only in
exceptional circumstances such as obvious bias by the arbitrator or fraud.
Even though arbitration is more structured than negotiation or mediation, it is more flexible,
and less costly, than litigation. Generally, the parties decide how formal the arbitration
proceeding will be and what rules they will follow regarding procedures such as discovery,
presentation of evidence, and the necessity of a detailed opinion supporting the arbitrator's
decision. Fewer discoveries are conducted in preparing a case for arbitration than for trial.
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3.2 ADR Advantages and Disadvantages
Using ADR methods for disputes may have a variety of advantages and disadvantages,
depending on the type of ADR process used and the circumstances of the particular case.
3.2.1 Advantages
 Cost - some cases lawyers aren't needed, but if they are cases don't take as long, and
therefore the cost will be lower
 Accessibility - informal, relaxed atmosphere, makes people feel less intimidated
 Speed - ADR are generally much quicker than courts
 Expertise - there are often

specialist expertise, which leads to a fairer outcome and
quick settlement as technical points don't need explaining
 Parties in control - both can agree on the decision made and both parties can control
the procedure and outcome
3.2.2 Disadvantages
 Lack of legal expertise - few people are legally trained, so many struggle with
difficult areas of the law, which can mean going to court is necessary
 No system of precedent - each case is judged by itself, and there are no guidelines for
future cases, which can cause inconsistency and uncertainty
 Enforceability - decisions not made by the court may be difficult to enforce and could
lead to a court case having to be brought to recover the money
 Imbalances of power between the parties - If a case involves big businesses it can be
unfair regarding lawyers and other resources
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Task 04
4.0 Health Safety and Welfare Law
According to HSE (Health and Safety Executive) all workers have a right to work in places
where risks are properly controlled to their health and safety. Health and safety is about
stopping people getting hurt at work or ill through work. Employer is responsible for health
and safety, but employees must help.
There are some acts and legislations which are using in construction industry according to
UK government, they are;
 Health and Safety at Work etc. Act 1974

 The Management of Health and Safety at Work Regulations 1999
 The Construction (Design and Management) Regulation 2007
4.1 Health and Safety at Work etc. Act 1974

According to this act, Chapter 37, Part (I) is mainly focusing on “Health, Safety and Welfare
In Connection With Work and Control of Dangerous Substances and Certain Emission into
the Atmosphere”.
The Section 2 to 9 is referring about general duties. In section 2 it is providing the general
duties of employers to employees
4.2 The Management of Health and Safety at Work Regulations 1999

This is a regulation mainly focusing on Health and Safety of works. There are five main
sections which are important to construction industry, they are;
 Section 3. Risk Assessment

 Section 14. Employees’ duties
 Section 15. Temporary workers
 Section 16. Risk assessment in respect of new or expectant mothers
 Section 19. Protection of young persons
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4.3 The Construction (Design and Management) Regulation 2007
This Regulation Mainly focusing on responsibilities of different parties in construction
industry. When is it considering about this regulation Part 1 is about introduction. Part 2, 3
and 4 is about duties of several parties. However according to this report there are 5 sections
most important in construction industry health and safety, they are;
 Section 2. Interpretation
 Section 4. Competence
 Section 5. Co-operation
 Section 6. Co-ordination
 Section 7. General principles of prevention
4.4 The methods to avoid health and safety law issues.

The work place health and safety laws are there as an effort to keep the employees safe from
harm. The health and safety standards are there to reduce the risks of accidents and illnesses.
The government agents have the authority to investigate regarding the violations of non-
compliance of the health and safety regulations. The Health and Safety in Employment law
designed to prevent people at work from being harmed. It applies to everyone in almost all
places of work; inside, outside, public or private even underwater or underground.
Employees, employers, contractors, owners of building or plant and visitors to workplaces all
have responsibilities and obligations under the health and safety law.
The health and safety law applies to you no matter if you are a permanent, temporary, casual,
full-time, or part-time employee, or even if you are just receiving on the job training or
gaining work experience. It also applies to you regardless of the amount of experience or
responsibility you have.
The health and safety law puts the responsibility first and foremost on employers to take all
practicable steps to identify and manage workplace hazards. However, as an employee or
trainee in a workplace you also have responsibilities towards promoting a safe and healthy
working environment.
The basis of the UK health and safety law is the health and safety at work act 1974 and some
regulations. This sets out the general duties and principles for the protection of health and
safety of employees Approved codes of practices are published from time to time containing
guidance, examples of good practices and explanations of the law.
Approved codes of practices offer practical advice and contain examples of good health and
safety practices. It gives advices on how to comply with the law. Approved codes of practices
do not have the same legal force like in regulations. But they set out requirements in more
detail than the regulations.
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When considering the construction industry, it is an industry where the probability for the
accidents is very high. For example such as, working at height, falling, heavy objects falling
on to head, etc. and also there are health safety issues for the persons around the site as well.
Therefore in order to avoid those health and safety law issues, it is advisable to identify the
risks and the hazards and take the preventive measures for those. To avoid the issues
regarding health and safety,
 Prepare method statements for each and every work in the construction that will help
to avoid mistakes of the works and to follow safety procedures.
 Maintain a risk register and a probability and impact matrix to manage the risks and
avoid the safety issues as much as possible.
 Prepare risk assessments before commencing a hazardous work that will help to take
necessary actions to minimize the risk and take necessary steps to avoid the risk as
much as possible.
 Provide proper health and safety training for the persons at work.
 Provide the employees necessary personal protective equipment and allocate only
competent persons for the tasks that have risks if it is not done properly.
 Make arrangements to protect the people around the site and also the vehicles moving
near by the site.
 Give the employees necessary knowledge about the health and safety at work and also
the way to work while protecting their health and safety and also the others.
Given above are the methods that we can use to avoid the health and safety law issues.
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Reference
 Thambimuttu,V., Sri Lanka: Legal Research and Legal System. Nyulawglobal.org. 2009.
[Online] available at: . [Accessed 24 May 2015].
 Corey,. AN INTRODUCTION TO THE LEGAL SYSTEM OF SRI LANKA. 2nd ed.

Colombo: Lake House Book Shop, 2007. Print.
 Anon,. n.d., ADR Types & Benefits – Alternative Dispute Resolution. 2015. [Online]
available at: http://www.courts.ca.gov/3074.htm. [Accessed 29 May 2015].
 Scott, D. Alternative Dispute Resolution Techniques Resolving Disputes Without “Going

To War”: Frost Brown Todd Law Firm. Frostbrowntodd.com, 2004. [online] available at:
http://www.mediate.com/articles/sgubinia2.cfm. [Accessed 29 May 2015].
 Prieditis Mara, Alessandra Sgubini, and Andrea Marighetto. Arbitration, Mediation and
Conciliation: Differences and Similarities from an International and Italian Business
Perspective. Mediate.com. N.p., 2004. [Online] available at:
http://www.mediate.com/articles/sgubinia2.cfm. [Accessed 29 May 2015].
 Anon. n.d. Tort. [online] Available at: https://www.law.cornell.edu/wex/tort. [Accessed

25 May 2015].
 Anon. n.d. Intentional tort. [ONLINE] Available at:

https://www.law.cornell.edu/wex/intentional_tort. [Accessed 29 May 2015].
 Kadian. K,. n.d. Strict Liability Torts: Definition and Examples [ONLINE] Available at:
http://study.com/academy/lesson/strict-liability-torts-definition-and-examples.html.
[Accessed 25 May 2015].
 Owen,S., Lewis,J.R., 1997. Law for the Construction Industry. 2nd ed. Harlow:
Longman.
 FIDIC RED Book
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Commercial Management Practice

Professional Diploma in Quantity Surveying

Module Number PDQS - R -07 Module Title Commercial management practice

Credit Value 15 Module Level H2 Module Value 1.0

Assessment Final Assessment Assessment Weighting 100%

Assignment Title Commercial Management Practice & Law of Contract

Lecturer Mrs. Harshi Madubashini

Student Name B.P.D. Tharindu Student Number CL/PRDQTS/16/11

Handed Over on Due Date

Date Submitted 28/12/2019 Pass/ Re-

Course Leader Mrs. Harshi Madubashini

Module Leader Mrs. Harshi Madubashini

Internal Verifier Ms. Kavitha Kajendran Date Verified

Developed by The Department of Engineering and Construction of ICBT Campus

Final Grade Fail Pass Merit Distinctio

Assessor’s Signature Date

This Assignment will explain and explore about

 Effect of the law of tort on the construction industry

 Detriment of Earning Ability

1.1 Types of Torts:-

1.1.1 Intentional Torts

1.1.2 Negligent Torts

 A person must owe a duty or service to the victim in question

1.1.2 Strict Liability Torts

1.3 Tort law in Construction Industry

Construction Industry is world second largest industry. Construction industry is based on

2.1.1 Parties involve in construction project

2.1.1.3 The Contractor

“Contractor” means the person(s) named as contractor in the Letter of Tender

2.2 Type of Construction Contracts

2.2.1 Lump Sum Contracts

2.2.3 Cost Plus Contracts

2.2.4 Time & Material contracts

 The Contract Agreement (if any),

 Reference:- FIDIC Red Book General Condition

2.5 Standard Commercial Management Practice and Project Administration Procedure

2.6 Contractual Liabilities and Legal Obligations

 It is the responsibility of the employer or the client, to make the financial

FIDIC Red Book Clause 2.5 and SBD-2 Clause 2.4

Clauses in FIDIC Red Book

 It is the responsibility of the consultant/engineer to provide the contractor necessary

As the consultant represents the client, it is the responsibility of the

2.6.3 The Contractor

Clauses in FIDIC Red Book

 It is the responsibility of the contactor to submit to the Engineer/consultant the “as-

 It is the responsibility of the contractor to obtain a security performance for proper

 It is the responsibility of the contractor to co-operate with the employer, persons

 The Contractor is responsible for packing, loading, transporting, receiving, unloading,

 The contractor is responsible to provide the monthly reports for the

3.0 Alternative Dispute Resolution (ADR)

When it considering about alternative Dispute Resolution.

3.1 Types of ADR method

 The parties remain in control of the outcome

 Accessibility - informal, relaxed atmosphere, makes people feel less intimidated

 Speed - ADR are generally much quicker than courts

 Expertise - there are often

 Health and Safety at Work etc. Act 1974

4.1 Health and Safety at Work etc. Act 1974

4.2 The Management of Health and Safety at Work Regulations 1999

 Section 3. Risk Assessment

4.4 The methods to avoid health and safety law issues.

 Corey,. AN INTRODUCTION TO THE LEGAL SYSTEM OF SRI LANKA. 2nd ed.

 Scott, D. Alternative Dispute Resolution Techniques Resolving Disputes Without “Going