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    Site Possession – Construction Law References

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    Site Possession – Construction Law References

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    Site Possession – Construction Law References

    Uploaded by

    jewon

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    © All Rights Reserved
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    Construction Law References

    This site is for the advancement of construction law

    Site Possession

    One of the employer’s obligations in a construction contract after the project is awarded to
    the contractor is to allow the contractor to possess the site so that the contractor can
    commence work physically.
    Usually the contract will set out the express terms owe by the employer to the contractor.
    For example PAM Conditions of Contract 2006 (without Quantity) Clause 21.1 states that ‘On
    the Date of Commencement, possession of the Site shall be given to the Contractor who shall
    commence the execution of the Works regularly and diligently proceed with and complete the
    same on or before the Completion Date …… ‘
    Clause 38.2 of the JKR 203A Conditions of Contract (2010) states that
    ‘Unless the Contract Documents shall otherwise provide, possession of the Site as complete
    as may reasonably be possible but not so as to constitute a tenancy, shall be given on or before
    the “Date for Possession” stated in the Letter of Acceptance to the Contractor who shall
    thereupon and forthwith commence the Works (but subject to clause 38.1) and regularly and
    diligently proceed with and complete the Works on or before the Date for Completion as
    stated in Appendix.’

    Now where do the law stand if the contract keeps silent on the following issues?
    1. The contract did not expressly state the obligation of the employer to give possession of the
    site.
    2. When is the employer required to give the contractor possession of the site?
    3. What is the nature and extend of the possession which the employer requires to give the
    contractor?
    4. Whether or not the giving of the possession implies that the contractor will have
    uninterrupted access to and possession of the site?
    5. What is the duration of this obligation?

    1. Where the contract did not expressly state the obligation of the employer to give possession
    of the site or when is the employer required to give the contractor possession of the site?

    Implied term
    The express terms in a construction contract will normally states the time of possession when
    the employer is required to give the contractor possession.
    Where these are not set out, certain terms will be implied.
    In Mackay v Dickson and Stevenson [1881], Lord Blackburn stated that it was:
    ‘a general rule that where in a written contract it appears that both parties have agreed that
    something shall be done, which cannot e�ectually be done unless both concur in doing it, the
    construction of the contract is that each agrees to do all that is necessary to be done on his
    part for the carrying out of that thing, though there may be no express words to that e�ect.
    What is the part of each must depend on circumstances’
    The case London Borough of Merton v Stanley Hugh Leach (1988) 32 BLR 51 is an example of
    an implied duty (in the absence of express term) imposed on the employer to cooperate with
    the contractor to do all that is necessary to allow the contractor to complete his work.
    Another implied term is the obligation not to do anything which will prevent or hinder the
    contractor from carrying out their obligations under the contract or from executing work in a
    regular and diligent manner (London Borough of Merton v Stanley Hugh Leach (1985) 32 BLR
    51.
    In The London Borough of Hounslow v Twickenham Gardens Development (1970) 78 BLR 89
    case, it was held that the employer has an implied duty to give the contractor such
    possession, occupation or use of site as is necessary to enable the contractor to perform the
    contract.
    Failure to give possession by the employer to the contractor is a breach of contract which
    entitle the contractor to rescind or terminate the contract (Tan Hock Chan v Kho Teck Seng
    [1980] 1 MLJ 308].
    However, in practice it is unlikely the contractor will take that drastic action. Usually the
    contractor will wait till the site is ready for possession. The contractor will need to notify the
    employer of this delay and claim for an extension of time (cl 43 g) and any damages if any.
    Under the JKR 203A form 2010 the possession of site can be delayed up to 90 days from the
    ‘Date for Possession’ as stated in the Letter of Acceptance (Clause 38.5).
    Unfortunately, it is stated in clause 38.4 of the form that the contractor is not entitled to claim
    any loss or damage caused by such delay in giving possession of the site nor can he be entitled
    to terminate the contract.
    But it seems that there is a contradiction between clause 38.4 and 38.5 of the form, where the
    contractor is given a choice to proceed with the works (cl 38.5 a) or terminate the contract (cl
    38.5 b) whereas in cl 38.4 the contractor is not entitle to terminate the contract in the event
    that the giving of the possession of the whole site is delayed beyond 90 days of the ‘Date for
    Possession’

    The PAM contract 2006(without Qty) clause 21.1 states that In the event there is a delay by the
    Employer in giving possession of the Site to the Contractor, the Architect shall grant an
    extension of time under Clause 23.8(f). Provided always that the delay in giving possession of
    the Site does not exceed the Period of Delay stated in the Appendix, the Contractor shall not
    be entitled to determine his own employment under the Contract.

    The contractor is also entitled to claim for loss and/or expanse (if any) under clause 24.3 b of
    the form and provided the giving possession of the Site does not exceed the Period of Delay [if
    not stated is a continuous period of 3 months] stated in the Appendix to the Conditions of the
    Contract, it indirectly indicate that the contractor can determine his own employment under
    the contract.

    Interestingly, the determination of the own employment by the contractor under the contract
    due to the delay of the employer giving possession of the site exceed the Period of Delay is not
    listed under the clause 26 of the PAM Contract 2006 (without Qty)

    Where the contract did not expressly state, the common law stand is clear as can be seen from
    the above case of Tan Hock Chan v Kho Teck Seng [1980] 1 MLJ 308.

    S 56 of the Contract Act 1950 states:

    E�ect of failure to perform at �xed time, in contract in which time is essential

    56. (1) When a party to a contract promises to do a certain thing at or before a speci�ed time,
    or certain things at or before speci�ed times, and fails to do any such thing at or before the
    speci�ed time, the contract, or so much of it as has not been performed, becomes voidable at
    the option of the promisee, if the intention of the parties was that time should be of the
    essence of the contract.

    76. A person who rightly rescinds a contract is entitled to compensation for any damage
    which he has sustained through the non-ful�lment of the contract

    The Act allows the aggrieved party at the option to rescind the contract and entitled to
    compensation for any loss or damage that he has sustained.

    alphadisputeresolution / October 25, 2017

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