Use UK standard forms of contract overseas but take care of cultural and local aspects, says Sir Vivian Ramsey

The key factors that must be addressed when using UK standard forms of construction contract overseas are the local legal system in use and the cultural differences determining the way in which provisions are interpreted, Sir Vivian Ramsey told delegates attending the JCT Povey Lecture at Local Government House, London on Thursday 12 November 2015.

“English language standard forms have become the norm overseas, which makes UK standard forms of contract an appropriate choice.

“However, the way in which the contract provisions are used and interpreted will differ depending on the cultural or legal systems in which the contract is being operated and care needs to be taken to ensure these aspects are taken into account.

“Unless that is done the provisions will not properly deal with important aspects and may even render the contract or parts of it unenforceable.”

In addition, Sir Vivian explained that the principles and practices of common law systems versus regions that operate primarily through a civil law jurisdiction is another area of conflict when considering the use of UK contracts abroad:

“[…]in English law there are commonly implied terms relied upon by construction lawyers. These terms relate to co-operation and non-hindrance by the Employer [and] carrying out work in a good and workmanlike manner, with good and proper materials by the Contractor.

“In civil law jurisdictions, there is also an obligation of “good faith” in the performance of the contract [but] all relevant evidence is generally admissible [so] there is an ability to rely on conduct which has taken place after the formation of the contract and generally, up to the point where there is a dispute.

“This can alter the approach to the interpretation of the terms of any agreement and can impose wider obligations in terms of the requirement to act fairly than would apply in common law jurisdictions.”

Sir Vivian Ramsey discussed several important areas of the contractual process to highlight differences in practice and approach, including the position of the architect/engineer, interpretation, notices, unforeseen conditions, interest, liquidated damages, termination, limitation of liability, mediation, adjudication and arbitration.

Introducing Sir Vivian, JCT chair Richard Saxon CBE, said:

“As global construction volume rises, UK professionals are increasingly being asked to play a part abroad.

“What better or more appropriate speaker could we have to discuss this than Sir Vivian Ramsey, whose vast experience both in international construction law and in his career as an engineer helps us to understand comprehensively the various aspects we need to take into account.”

Sir Vivian Ramsey’s lecture note can be downloaded from the JCT Povey Lecture page. A full video presentation will be available soon.

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