Civil Engineering May 2022 | Vol 30 No 4

Civil Engineering May 2022 33 The JBCC (Edition 6.2) May 2018 contains a mechanism to extend the contract date in the case of a force majeure event but does not provide a remedy for additional costs occasioned by such an event unless it is to deal with physical damage to the works. LIMITATIONS OF FORCE MAJEURE AND IMPLICATIONS The clauses in concluded standard form contracts may provide relief, however these clauses do not provide for every situation, nor can they reasonably be expected to. Most are only useful if the event in question has not been foreseen and/or cannot be provided for at the time when a contract is concluded. For this reason, they are only of use to contractors who have already concluded contracts. Our concern at MDA Attorneys is that the limitations ex- perienced with the force majeure clause during the progression of the Covid-19 pandemic will create similar problems for con- tractors who are negotiating and entering into contracts now, in that the Russia-Ukraine war can no longer be regarded as an “unforeseen” event. Contracts are drafted to apportion risk, and in this regard, it is simply untenable to expect a contractor to assume all the risk in relation to the cost implications of an exceptional international event. Where they are available, the mechanisms included in most standard form construction contracts are flawed. Most contracts do not allow for cost increases, but those which do are based on escalation, or calculations fixed at the time that the contract is concluded. They therefore do not allow for the extraordinary price spikes we are currently seeing, and possible future price increases. It is clear that provision can and should be included in contracts going forward for mechanisms to deal spe- cifically with price and cost increases due to exceptional international events. MDA Attorneys is preparing appropriate clauses for inclusion in contracts which will entitle contractors to address cost increases due to exceptional international events through the mechanism of submitting claims. In this event, standard claim procedures contained in the contract would apply. The engineer/project manager/employer’s agent and/or principal agent would adjudicate over such a claim. If the claim is rejected, standard procedures would apply for the contractor to dispute such rejection. In addition to including clauses in contracts to deal with higher costs due to exceptional international events going forward, employers should, at the very least, be open to negotia- tion on their inclusion in contracts. Failure to do so could have far-reaching effects. Contractors could end up running projects at a loss, they may fail to draw a profit on a project, or they may even be deterred from tendering for projects in the first place. Those who do choose to tender and take on the risk of exceptional international events could be forced to close their doors if the costs become too much to bear. A further decline in the construction industry could ensue on account of reduc- tion in resources. Now is the time to include clauses to deal with potential extraordinary price increases. There is no doubt that more price hikes will negatively affect the execution of construction projects going forward.  Core Drilling Concrete Repair Concrete Cutting Concrete Scanning SPECIALISED CIVIL ENGINEERING CONTRACTOR Visit us! www.solvocore.co.za SKILLED TO ASSITS OUR CLIENTS THROUGHOUT SUB-SAHARAN AFRICA IN THE MARINE, MINING, INDUSTRIAL AND COMMERCIAL INDUSTRIES. Concrete Repair and Rehabilitation Structural Strengthening Concrete Core Drilling Services Concrete Cutting and Sawing Services Concrete Scanning and Diagnostics Grouting Services Our experienced teams can assist with: YOUR SOLUTION DRIVEN PARTNER IN SPECIALISED CONCRETE SERVICES Namibia DRC