Construction law topics
1. Time requirements in DK law
In case of delay or disruption in construction caused by the employer, various claims may arise which the contractor can advance against the employer. These claims are: –Delay claims: If the works are delayed, the contractor may require any costs paid during the delay period covered by the employer…
2. Time requirements rules
”The contractor shall be entitled to compensation for losses suffered because of delays caused by (1) circumstances relating to the employer, cf. § 24, subs. 1 (2), and where he is guilty of any errors or neglect, or (2) liability-entailing delays by other contractors, cf. § 25, subs. 1, or liability-entailing delays on the part of other contractual parties.”
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3. Delays in legal literature
According to practice, there are strict requirements for the contractor’s complaint in case of compensation or indemnity due to delay. It is assumed that a complaint rule applies equivalent to section 27 of the Danish Sale of Goods Act (købeloven) according to which the creditor must file a…
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4. Burden of proof
Proving the expenses paid and included in the claim for damages is the contractor’s obligation. However, arbitration practice expresses some understanding that it may sometimes be difficult to meet the burden of proof for the causal connection between the delay and the specifically paid expense…
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5. Examples of times requirements
The turnkey contractor required payment from the employer for extended site operations of DKK 6,396,836.00. According to the bid schedule of 27 September 2011 which was an appendix to TE’s bid of that same day, the price for the site was a total of DKK 3,270,000 and the unit price for a month was DKK 500,000. The tender price…
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6. Overview of a well-structured claim
A very short introduction to the claim: A very short introduction of the claim is important so the judges have an idea of what kind of claim it is. This has to be very simple so that the judges knows the overall “picture” though this headliner. The claim amount should be mentioned here too. This is the “what”-section of the description of…
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7. Overall principles
Some principles have to be kept in mind when claims shall be described and submitted to the Danish Arbitration Board, including a claim to EoT entitlement. Besides the overall strategy all claims must be documented and described with clarity and simplicity. As contractors we must in a clear and simple way explain to the…
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8. The Arbitration Boards method
When the Arbitration Board awards a party a compensation, including time related claims, the Arbitration Board is infamous for awarding the claim discretionary, awarding either one third, one half or two thirds of the claim depending on the credibility and quality of documentation of the claim. This method is clearly seen in our…
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9. Methodology for EoT claims
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10. Disruption claims
If the completion of the works becomes disrupted and thus delayed due to e.g. ambiguities in the project, lack of access to the works or unforeseen conditions not caused by the contractor’s circumstances, the contractor may require the additional costs covered through a disruption claim…
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11. Acceleration claims
There is no specific described methodology for claim related to acceleration costs, but the following methodology is what suggested based on case law:
1. Short introduction to the claim
2. Explanation of the requirements to get the claim awarded…
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12. Methodology for acceleration cost
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13. Counterclaims
Erik Hørlyck states in ”Entreprise – AB 18”, version 7, page 163, as a comment to the decision to depreciate that the wording of the decision implies ”that concrete notifications of defects must be submitted. It is not sufficient to prevent the depreciation that the Employer submits an unspecified…
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14. Effect of expert determinations
The General Conditions for Turnkey Contracts (“Almindelige Betingelser”), which is an agreed document normally used in the building and engineering industry, establish a standard for the employer to claim liquidated damages in case of construction delay. In order to claim for liquidated damages, the employer merely has to…
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15. Rules of interpretation
When deciding the scope of the clients obligations, the interpretation of the contract is clearly the crucial part. Under Danish law, a matter such as the raised question will be decided by the general principles of contract interpretation, which is a system based on Common Law. The question on how a contract must be interpretated…
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16. Document access
It follows from Section 7 of the Danish Public Records Act that “anybody” may obtain access to documents according to the same act and that it is thus not a condition that a person has a legal interest in a case or that a person is, e.g., a journalist. As mentioned, the starting point is that access to documents must be provided to all…
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17. Applying for access
As mentioned, the starting point is that access to documents must be provided to all documents unless the case, the document or the individual piece of information can be specifically exempted on the basis of one of the provisions in Sections 19-33 of the Danish Public Records Act. As mentioned, the starting point is that access …
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18. Rules of interpretation
Whether an acceleration claim should be regarded as a VO claim under Section 14 of AB 92 or an EOT claim under Section 27 of AB 92 is, as stated above, not a question that traditionally gives rise to problems in practice as the distinction generally has no bearing on whether a contractor can succeed in his acceleration claim. The following…
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19. Legal Opinion
The fundamental principle in Danish contract law is that contracts/agreements are valid. The Roman law principle about agreements (“pacta sunt servandi”) has been codified in Danish law from the first written law from 1241, and it is currently codified in Section 1 of the Danish Act on Contracts which briefly states that “Offers…
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20. Invalidity clauses
The Danish Act on Contracts contains a number of invalidity rules. A distinction is traditionally made between shortcomings of original (circumstances related to the conclusion of the contracts) and deficiencies in content (matters relating to the content of the contract). The Danish Act on Contracts contains the following rules relating…
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21. Doctrine of Assumption
As mentioned under section 6.1, the Doctrine of Assumption, which is based on case law, equally applies with the section of avoidance in the Danish Act on Contracts The Doctrine of Assumption states that an agreement cannot be asserted according to its content if circumstances turn out…
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22. Completion
In general, there is a gradual transition between the use of invalidity rules and the completion of a contract. Completion (or filling) is relevant when a situation that is not described in the contract between the parties arises and the courts decide to repair this by estimating what the parties…
23. Case law under section 14
The above adopted set of rules and ABT 93 also contain rules that prescribe that variations must be agreed in writing between the parties and that requirements in consequence of changes must be made in writing. However, there is no tradition in Danish construction law to attribute a…
24. General assumption on extra work
As mentioned above, a single deviation from agreed formal requirements can lead to the contractor being able to receive payment for documented extra work. In the following, it will be reviewed what the contractor must otherwise prove in order to obtain payment for extra work…
25. Concurrent delays vs reflective delays
Legal literature and arbitration practice regarding concurrent delays (parallel delays) establish that a concurrent delay entitles the employer as well as the contractor to an extension of time while precluding the parties’ potential entitlement to delay costs. The legal position is in agreement with the…
26. Responsibility and burden of proof
If it can be proven that a delay is caused by the employer, the contractor is generally entitled to an extension of time and financial compensation according to section 27, subs. 1, no. 1 of AB 92. The contractor’s task is to meet the burden of proof that the delay cannot be caused by the contractor’s error or risk and that the work was…
27. Delays in legal literature
Parallel delays have only claimed little attention in Danish, legal literature. Thus, common presentations on construction law do not mention parallel delays which is in sharp contrast with the meaning of parallel delays in practice where construction projects become more and more complex…
28. Delays in arbitration practice
The case was about a non-profit housing society for which 40 attic flats were to be built in an existing housing block. Following the completion of a call for tenders, the employer and the contractor concluded a main contract on 10 February 2012. Construction was initiated on 10 April 2012..
29. Delays in acceleration costs
Based on the currently sparse, legal literature and arbitration practice regarding concurrent delays (parallel delays), the current understanding implies that a concurrent delay entitles the employer as well as the contractor to an extension of time as both parties are responsible for a delay. However, due to the concurrent delay, it rejects…