INDUSTRY NEWS
CONTRACTS: SHARING RISKS POST-LOCKDOWN The most common standard form contracts in the construction sector have been slow to adapt post the Covid-19 lockdown. According to construction and technology specialist MDA Attorneys, they must be revised to accommodate new construction technologies, dispute and claim resolution methods and ever-changing risk. “While there are some changes being introduced to standard form contracts, as well as particular conditions of contract, they don’t adequately address the risks faced by the parties to a construction contract,” says Euan Massey, director at MDA Attorneys. The most obvious risk over the past 18 months has been the impact of the Covid-19 pandemic. Massey says none of the standard form contracts were able to ensure a fair sharing of risk between employer and contract in terms of the impact of the pandemic. “Certain contracts entitled contractors only to time extensions. As a result, contractors bore the brunt of financial losses due to the halting of construction. They also carried the costs of the additional safety measures required on active sites,” he explains. Yet other standard form contracts allowed contractors to claim additional costs and extensions of time. Massey says that, in many cases, this resulted in the employer carrying most of the financial loss and additional costs associated with the changed health and safety requirements.
“SINCE COVID-19 IS NO LONGER UNFORESEEABLE, PARTIES ARE ASSUMED TO HAVE ALLOWED FOR THE RISKS ASSOCIATED.”
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NOT UNFORESEEABLE Soon after Covid-19 was declared a pandemic, several attorneys began to draft clauses to more equitably address its impact, yet there are still parties concluding contracts without a Covid-19 clause. Since Covid-19 is no longer unforeseeable, parties are assumed to have allowed for the risks associated with the pandemic in a contract before entering into it, so it is really problematic not to include a Covid-19 clause. Covid-19 clauses which are being included as particular conditions in standard form contracts typically deal with the impact of localised outbreaks (Top left): Euan Massey, director at MDA Attorneys.
SOUTH AFRICAN BUILDER SEPTEMBER 2021
