JBCC PRINCIPAL BUILDING AGREEMENT CLAUSE 01

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Question:

I have noticed that in a number of clauses “deemed” is used and appears to bring about
a decision that is unfair - generally to the contractor. Can you please explain if this is
the case and why?

Reference: P01.001

Answer:

You have either not read or have not understood clause 1.5 with particular reference to 1.5.1
The word "deemed" shall be conclusive that something is fact regardless of the objective
truth. The use of "deemed" occurs in the following clauses: 6.2, 8.1, 11.1.3, 12.2, 14.1,
15.1.1, 16.5, 24.5, 24.8, 25.3, 25.5, 26.4, 29.8, 30.2.1, 32.6.3. 38.3, and 40.2

The primary reason for using "deemed" in the Agreement is to assist and not hinder either
of the contracting parties as in all these cases it brings about a circumstance or decision that
is generally "unfair" to one of the parties. This, in the legal sense, immediately puts the
“injured party” in position to contest the "deemed decision" whereas should the "deeming
provision" not have been included such party would first have to "force" the other party
(generally the principal agent) into making a decision (which could take days or weeks)
after which a dispute could be declare should the deemed decision be seen as being unfair
or inappropriate.

I can further assure you that deeming provisions are use in many legal agreements and laws
as it cuts out deliberate inaction or stalling by one or other of the parties.

Question:

Can you please provide me with the legislation reference(s) related to interest when the
employer is an organ of the State in terms of the Agreement

Reference: P01.002

Answer:

There are two rates that are applicable. These are:

1 Interest that is owed by the State: The rate is determined by the Minister of Justice in terms
of Section 1(2) of the Prescribed Rate of Interest Act.1975 (Act No 55 of 1975) as amended
from time to time will apply

2 Interest that is due to the State: The rate is determined by the Minister of Finance in terms
of Section 80 of the Public Finance Management Act, 1999 (Act 1 of 1999) as amended from
time to time will apply

It clear from the above that:

1 The current interest rate as defined in the Agreement in relation to the private sector will, in
all likelihood, differ from that applicable to the State

2 For a State contract the relevant Act must be accessed to determine the current rate of
interest before it is applied in terms of the Agreement

3 Where the State is the employer the contractor could well receive or pay interest at
differing rates in relation to his n/s subcontractors