JARAMOGI OGINGA ODINGA UNIVERSITY OF SCIENCE AND TECHNOLOGY

SCHOOL OF ENGINEERING AND TECHNOLOGY

BSC. CONSTRUCTION MANAGEMENT

YEAR 4, SEMISTER II
COURSE CODE: TCM 3421
COURSE TITLE: CONSTRUCTION AND LAW
LECTURER: ARCH. RAPHAEL OCHIENG

NAME: RUTO KEVIN

REG NO: T131/0077/2016s

TAKE AWAY CAT

QUESTION ONE (10 MARKS)

In Kenya dispute resolution is mainly undertaken in courts. Write an essay justifying why in construction
sector the commonly used forms of contract have preferentially adopted alternative dispute resolution
mechanisms as opposed to court litigation.

QUESTION TWO (10 marks)

Construction contracts have predominantly applied standard forms of contract in the management of
construction projects in place of ad hoc or verbal forms of contract. Write an essay explaining why this is
so.

SUBMISSION DATE: 16TH MAY 2020.

QUESTION 1

INTRODUCTION

Courts are an essential institution without which society would end up in chaos. Their
importance cannot be emphasized enough, though many of the disputes which arise between
individuals or organizations are such that, they are solvable without the interference of the
judicial authorities. Such conflicts, which do not require the juridical system, instead, need a
specific set of formal regulations to achieve their end.

Alternative Dispute Resolution often referred to as ADR, is a set of methods or techniques that
allow parties to a dispute to reach an amicable settlement. It consists of ways in which parties
can settle their differences without recourse to litigation. Alternative Dispute Resolution (ADR)
methods are now widely accepted and have been gaining recognition at the national as well as
international level. Modes of ADR have been in existence from a long time and were used long
before the sophistication of civilization.

ADR involves continuous efforts made by a third party, who is neutral and assists the disputing
parties to come to a settlement. The qualification and the skill of the neutral third party vary,
concerning the modes of dispute resolution.

ADVANTAGES OF ADR OVER COURT LITIGATION

IN THE CONSTRUCTION INDUSTRY

Alternative dispute resolution (ADR) procedures offer several advantages over court litigation in
the construction industry as discussed below:

A single procedure- Through ADR, the parties can agree to resolve in a single procedure a
dispute involving intellectual property that is protected in a number of different countries,
thereby avoiding the expense and complexity of multi-jurisdictional litigation, and the risk of
inconsistent results.

Party autonomy.- Because of its private nature, ADR affords parties the opportunity to exercise
greater control over the way their dispute is resolved than would be the case in court litigation. In
contrast to court litigation, the parties themselves may select the most appropriate decision-
makers for their dispute. In addition, they may choose the applicable law, place and language of
the proceedings. Increased party autonomy can also result in a faster process, as parties are free
to devise the most efficient procedures for their dispute. This can result in material cost savings.
Neutrality- ADR can be neutral to the law, language and institutional culture of the parties,
thereby avoiding any home court advantage that one of the parties may enjoy in court-based
litigation, where familiarity with the applicable law and local processes can offer significant
strategic advantages.

Confidentiality.- ADR proceedings are private. Accordingly, the parties can agree to keep the
proceedings and any results confidential. This allows them to focus on the merits of the dispute
without concern about its public impact, and may be of special importance where commercial
reputations and trade secrets are involved.

Finality of Awards- Unlike court decisions, which can generally be contested through one or
more rounds of litigation, arbitral awards are not normally subject to appeal.

Cheaper- Mediators will commonly claim that mediation is quicker and cheaper than going to
court. Mediation can be much cheaper than taking legal action. However, research published by
the government shows that this is not always the case. As you might expect, when mediation
ended in a settlement, people thought it was quicker and cheaper than going to a full court
hearing. When the mediation didn’t end in a settlement, they thought it just added time and costs
to the process.

Quicker- Some forms of ADR can be quicker than going to court. If you are involved in a small
claim in court, for example, your case can go to mediation sooner than a hearing can be arranged.
Other forms of ADR, such as ombudsmen investigations, can take a long time. So if the matter
needs to be resolved urgently, get advice from an adviser before deciding. For example, you
might need to go to court to get an injunction to stop someone doing something, if your safety or
home is at risk.

Not adversarial- Going to court can risk making a bad situation worse. That’s because the legal
system is adversarial – it puts one side against the other, and at the end there is a winner and a
loser. Using mediation, where you talk to each other to find a solution you can both live with,
can help preserve an ongoing relationship.

Getting what you want- There is a much wider range of outcomes with ADR than with courts.
Mediation or an ombudsman investigation may well be more appropriate than court if what you
want is an apology, an explanation, or a change in policy or practice by an organisation.

Flexibility- ADR processes are usually more flexible than the court process. Most ombudsmen
will investigate your complaint through letters and documents, without a formal hearing.
Mediators will usually bring both parties together for a face-to-face discussion. Acas will try to
negotiate a deal through a series of phone calls. So think about whether you prefer sorting out a
problem by phone, through letters or emails, or face to face.
Long lasting- When it works, mediation can produce a solution that satisfies both sides.
Mediators encourage people in dispute to have creative discussions about a range of options.
Rather than just aiming for an acceptable compromise, they will try to end up with an agreement
which reflects the best possible outcome for all involved. Agreements reached through mediation
are more likely to work out in practice, and to last longer, than those imposed by a court. Almost
all of the mediated agreements made in small claims cases are complied with and there's hardly
any need enforcement action by bailiffs. This is not true of court orders, which often require the
winning party to take action, and pay extra costs, to enforce them.

A full investigation- Ombudsmen have the power to investigate problems in depth, and, like
courts, can require information to be provided by the organization complained about. Unlike
courts, they are free to the user. Poorly performing local authorities and government departments
can be identified by the public services ombudsmen. If your problem is a symptom of much
wider problems with a particular council or public body, then the ombudsman can investigate
one complaint, and suggest wide-ranging changes in practice to make things better for everyone.

But ombudsmen won’t necessarily take on your complaint to investigate. They might decide that
it isn’t something they can consider or that another type of resolution would be more appropriate,
such as going to court. In addition, some ADR options provide a remedy where there are few
other practical, affordable options; this could include issues such as neighbor disputes about
noise or low-level anti-social behavior, or complaints to the Financial Ombudsman Service about
financial service providers.

Flexibility- In the case of arbitration, the parties have far more flexibility to select what
procedural and discovery rules will apply to their dispute (they can choose to apply relevant
industry standards, domestic law, the law of a foreign country, etc.).

Independent choice of Arbitrator or Mediator- The parties can often select the arbitrator or
mediator that will hear their case, typically selecting someone with expertise in the substantive
field involved in the dispute. The arbitrator (or panel members) need not even be an attorney. In
this way the focus can be on the substantive issues involved rather than on technical procedural
rules. In normal litigation, the parties cannot select the judge, and the judge and/or jury may
often need expert witnesses to explain extremely complex issues. The greater the expertise of the
arbitrator, the less time that needs to be spent bringing him up to speed.

Absence of a jury- Juries are unpredictable and often damage awards are based solely on
whether they like the parties or are upset at one party because of some piece of evidence such as
a photo that inflames the passion of the jury. Juries have awardedclaimants damages that are well
above what they would have received through alternative dispute resolution; and they have also
done the opposite.
Party participation- ADR permits more participation by the litigants. ADR allows the parties
the opportunity to tell their side of the story and have more control over the outcome than normal
trials overseen by a judge. Many parties desire the opportunity to speak their piece and tell their
side of the story in their own words rather than just through counsel.

CONCLUSION

The various modes of Alternative Dispute Resolution (ADR) systems as discussed above hold
many similarities as well as differences. These methods provide diverse techniques, which help a
party to a dispute to amicably settle their dispute. These modes of dispute resolution are now
widely accepted and applied in numerous areas of dispute.

REFERENCES

 Julie Browne, Stuart Sime, Susan Heather B. (September,2010) A Practical Approach to

Alternative Disipute Resolution.
 Albert Fiadjoe, (2004) Alternative Disipute Resolution: A Developing World
Perspective.
 https://www.advantages of ADR in construction industry.com
QUESTION 2

INTRODUCTION

Standard Form Contracts are agreements that employ standardized, non-negotiated provisions,
usually in pre-printed forms. These are sometimes referred to as 'boilerplate contracts', 'contracts
of adhesion', or 'take it or leave it' contracts.

Construction projects, whether a simple office remodel or a multimillion-dollar plant expansion,

can be one of the more challenging projects undertaken by any business entity. A properly
drafted construction contract can be key to a successful project by establishing the expectations,
rights and responsibilities of the owner, contractor and other parties involved in a modern
construction project. Given the vital role a good contract can play in a successful construction
project, it is important to put in place a contract that meets the needs of your specific project. In
many instances, parties rely on standard form contracts.

ADVANTAGES OF STANDARD FORMS OF CONTRACTS OVER AD HOC OR

VERBL CONTRACTS IN THE MANAGEMENT OF CONSTRUCTION PROJECTS

In Standard forms of contracts, same terms are used every time a contract is formed. This makes
it easy for people to become familiar with the terms of standard contracts of their industry. As
time passes, people's confidence also grows in the terms of the contract. This is not the case with
verbal or ad hoc contacts.

In Standard forms of contracts, the written terms carefully and clearly define the parties'
agreement, their expectations, and their respective risks and obligations. With a mere oral
contract, there are no written terms and the terms that control are defined by the parties' oral
discussions or negotiation correspondence and in case of a dispute, the parties more often than
not, will invariably not agree on what those discussions were leading to difficulty in resolution.

Even if the parties "trust" each other, Standard forms of contracts provides a clear road map at
the onset of the project of how the parties will proceed to carry out the work. This helps to
ensure that the project will run smoothly and diminishes the risk of potentially fatal problems.
Absent this written road map, each party may have certain assumptions about what the
agreement is or how the other will behave in a certain situation. Those assumptions are often
incorrect and can prove fatal to a project.

One of the biggest problems encountered with ad hoc and verbal contracts is that each party's
respective memory of the agreement changes over time, especially if a dispute arises.
Similarly, people are sometimes simply dishonest about the terms of the agreement when a
dispute arises, large sums of money are at stake, and a recollection different from (or not entirely
consistent with) "the truth" will improve their position. These problems can be mostly avoided
with Standard forms of contracts.

Standard forms of contracts also help to guide or even force the parties to comply with
reasonable business procedures since those procedures will be specifically spelled out in the
respective form of contract in use and this therefore becomes a requirement of each party.

Standard forms of contracts obligate the parties to consider and agree on issues that they
otherwise might not even contemplate at the beginning of a project but that are commonly
encountered in the particular type of project and could very well become major issues during the
course of performance.

When using Standard forms of contracts, if the parties do have a dispute, particularly if that
dispute ends up in litigation, the more terms that have been reduced to a clear written statement
the fewer terms will be genuinely in dispute. This leads to a more efficient, or at least less
costly, resolution of the dispute since there will be fewer issues to legitimately fight over. In
addition, standard forms of contracts establish a body of case laws that can be referred by parties
in case of disagreement over any issues. This benefits the whole construction industry.

Standard forms of Contracts foresee most of the envisaged conditions, instances and risks
envisaged in the industry, by so doing, they are well accepted, that is, they are widely known,
and recognized, and used for international contracts hence enjoying the support of the
development banks and other international and governmental authorities.

Standard forms of contracts reduces the cost of contracting by eliminating the need for custom
contracts for individual tenders. Moreover, there is a substantial cost reduction in case of “New
Engineering Contracts", wherein standardized clauses are combined to create suitable contracts
for different employers.

Consistency in contracts means less room for deviation from the terms set out in the contract.
Standard forms of contracts prevents employers from making any changes to the contract
without informing their clients.

Standard forms of Contracts are prepared when there is no pressure of an imminent project hence
the drafting is done with care leaving little room for mistakes, furthermore, these forms of
contracts eliminates the scope for negotiation, and thus, speeds up the bidding process.
 CONCLUSION

Parties to a contract where standard conditions have been adopted are confident that they include
all the clauses to deal reasonably well with most of the eventualities which they may expect to
experience in the course of the project. In order to manage and mitigate risks, the use of Standard
forms of Contracts in construction projects has become commonplace since these forms of
contracts attempt to impose some certainty regarding the consequences of future events and to
appropriately allocate risks as between employer and contractor.

REFERENCES

 Richard H. Clough . (March, 2015) Construction Contacting, University of New Mexico.

 Lukas Klee. (November, 2014) International Construction Contract law.
 http://www.standard forms of contacts.com