Contract administration

AuthorJulian Bailey
Introduction 345
e contract administrator 345
(i) Terminology 345
(ii) Clerk of works/project monitor 346
(iii) e role of consultants 347
(iv) Contractor’s superintendent or representative 347
(v) Contract administration by the owner 348
Appointment of contract administrator 349
(i) Capacity 349
(ii) Nomination and replacement 350
e authority of the contract administrator 352
(i) Sources of authority 352
(ii) Scope of authority 352
(iii) Contract administrator as owner’s agent 353
(iv) Contract administrator as certier or arbitrator 355
(v) Consultation of third parties 360
(vi) Delegable functions 361
(vii) Directions or actions that are outside of the contract administrator’s
power 362
(viii) Communication with the contractor 363
(ix) Waiver of the need for contractual compliance 363
(x) Revocation of authority 363
(xi) Cessation of authority 364
(xii) Contract administrator not validly appointed 365
e duties of a contract administrator 365
(i) Duty to act in accordance with the contract 365
(ii) Duty of supervision and inspection 367
(iii) Duty to act fairly and impartially 370
(iv) Duty to aord natural justice 375
(v) Duty to act with due skill and care 376
(vi) Duty to act reasonably 377
(vii) Duty to avoid conicts of interest/not to accept unauthorised
payments or gifts 378
(viii) Duty following termination of the contractor’s employment 379
(ix) Eect on parties’ rights and obligations of maladministration 379
Duties of the owner in relation to the contract administrator 380
(i) No interference 380
(ii) Ensure that contract administrator carries out functions properly 381
(iii) Appointment of replacement contract administrator 382
Approvals and supervision 383
(i) Approval of work methods, materials and design 383
(ii) Approval of work performed 386
(iii) Supervision and contractor’s obligations 386
Certicates 387
(i) Types of certicate 387
(ii) Conditions to be satised before issue of certicate 388
(iii) Form and content 389
(iv) Interpretation 390
(v) Issue of certicate 391
(vi) Time at which a certicate must be issued 391
(vii) Errors 392
(viii) Wrongful refusal to issue a certicate 393
(ix) Eect of certicate 393
Certicate of practical completion 394
(i) Introduction 394
(ii) What is practical completion? 395
(iii) Consequences of practical completion being achieved 398
(iv) Entitlement to a certicate of practical completion 400
(v) Form and content 401
Defects correction certicate 402
Final certicate 403
(i) Introduction 403
(ii) Entitlement to a nal certicate 404
(iii) Form and content 405
(iv) Eect 406
(v) Role of contract administrator 409
“Final and binding” or “conclusive” 410
(i) Introduction 410
(ii) General eect 410
(iii) Contract wording 412
(iv) Scope of determination or certicate 413
(v) Eect on proceedings 414
(vi) Ouster of the court ’s jurisdiction 417
(vii) Fraud 418
Challenges to a contract administrator’s certication or determination 419
(i) Grounds for challenge 419
(ii) Arbitration 420
(iii) Curial review 421
(iv) Eect of arbitral award or court judgment 421
Remuneration of the contract administrator 422
Personal liability of the contract administrator 422
(i) Introduction 422
(ii) Contract 423
(iii) Negligence 424
(iv) Tortious interference with contractual relations 431
(v) Competition and Consumer Act 2010 (Cth) (Australia) 432
(vi) Deceit 432
(vii) Fraud 433
5.01 Most construction and engineering contracts, or at least those that involve more
than small or simple works, contain mechanisms for the administration of the contract,
and the supervision of the works performed pursuant to the contract. ere is an obvious
need for such machinery, to deal with such matters as the instructing and valuation
of variations, the ordering of corrective work, and the making of interim payments to
the contractor as the work proceeds, among other matters.1 is chapter considers the
role, appointment and powers of contract administrators and the intricacies of contract
administration itself.
e contract administrator
(i) Terminology
5.02 e term “contract administrator” may be used as a convenient expression to refer to
a person2 nominated or identied by a construction contract as being responsible for the
administration of the totality of the contract works, including the issuing of instructions
to the contractor, and certication of the value and quality of work performed by the
contractor. It is more convenient than accurate to refer to such a person using the neutral
term “contract administrator”, given the vast array of terms that have been applied to
persons fullling the role of a contract administrator. ere are many expressions in
the vocabulary of those in the construction industry to describe a person occupying the
position of contract administrator, the use of which varies depending upon the nature
of the project, the discipline of the contract administrator, and to a large extent the
arbitrary choice of words of the contract drafter. “Administrator”, “architect”,3 “certi-
er”, “contract administrator”,4 “construction manager”,5 “employer’s representative”,
1 Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1999] 1 AC 266 at 288, per Lord Hope.
2 at is, any legal person, including a corporation.
3 e “Architect” is the contract administrator under both the JCWC Standard Form of Building Contract, 2006
edition and the SIA Building Contract, 1st edition, 2016.
4 e JCT Standard Building Contract, 2016 edition, uses the combined expression “Architect/Contract Admin-
istrator”, in recognition of the fact that the contract administrator will often be an architect, but need not be. e
nomenclature is of some importance as only registered architects are able to carry on business as an architect (see
Chapter 15).
5 In cases involving construction management as the means of procurement.

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