Legal Perspective on Treatment of Delay Liquidated Damages and Penalty Clauses by Different Jurisdictions: Comparative Analysis

Assaad, Rayan H.; Abdul-Malak, Mohamed-Asem

doi:10.1061/(asce)la.1943-4170.0000387

Cited by 30 publications

(12 citation statements)

References 25 publications

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“…Liquidated-damages clauses stipulate, in advance, a sum for which the breaching party will be liable if late completion occurs due to its own default (Assaad and Abdul-Malak 2020b). Liquidated damages clauses are one of the most common legal and contractual causes for disputes in the construction industry (Assaad and Abdul-Malak 2020a). This is in addition to a key contractual clause related to price and material escalations (Holt et al 2020).…”

Section: Contractual Legal and Insurance Aspectsmentioning

confidence: 99%

Guidelines for Responding to COVID-19 Pandemic: Best Practices, Impacts, and Future Research Directions

2021

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Due to the novelty of coronavirus disease 2019 and the lack of measurable data, no enough research studies have been conducted to provide guidelines for responding to the coronavirus pandemic. This paper addresses this critical knowledge gap through a methodology comprising two main steps. The first step involved reviewing the updated industry best practices developed by various organizations and government entities. The second step involved investigating the impacts of the coronavirus based on the available resources and expert opinions, which also were used to develop a synopsis of emerging research topics. This paper provided various beneficial outcomes and findings. First, the paper presents a concise and integrated resource of COVID-19-related best practices for the construction industry. Second, the paper determined that the pandemic is perceived to have short-and long-term impacts-including negative and positive consequences-on four main facets: (1) workforce-related issues; (2) project and workplace considerations; (3) procurement and supply chain implications; and (4) contractual, legal, and insurance aspects. Third, the paper provides future research streams and directions that could be examined by future studies to help in the transition toward the new normal. Ultimately, this paper adds to the body of knowledge by offering practitioners and researchers guidelines for responding to the COVID-19 pandemic in the construction sector.

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Section: Contractual Legal and Insurance Aspectsmentioning

confidence: 99%

Guidelines for Responding to COVID-19 Pandemic: Best Practices, Impacts, and Future Research Directions

2021

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“…These applicable laws have created a complex web for contractors working under projects funded by the IDOT as they affect the process of work addition to their contracts and the payment provisions for that work (IDOT 2020a). In fact, mandatory law provisions take precedence over the parties' contractual stipulations (Assaad and Abdul-Malak 2020).…”

Section: Compensation Considerationsmentioning

confidence: 99%

Management of Change Orders in Infrastructure Transportation Projects

Assaad

Ahmed

El-adaway

et al. 2022

Pract. Period. Struct. Des. Constr.

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The Illinois Department of Transportation (IDOT) will handle many upcoming projects due to the recent statewide infrastructure strategic plan and the fast-track efforts affecting many infrastructure projects amid COVID-19. Nevertheless, many change orders are anticipated to occur on IDOT's projects. Thus, this paper examines the proper contractual management of changes within IDOT infrastructure transportation projects by following a research method based on the integration between a desktop analysis and a focus group analysis. The desktop analysis involved collecting information and data from existing resources, case studies, and documents related to change orders. The focus group analysis involved consulting with change order experts to verify that the outcome of each research step is useful and to validate the final outcomes of the paper. Based on 50 documented major change orders in IDOT projects and three litigated cases, two findings are provided. First, the top causes for key change orders within IDOT projects include contract administration, allowable contingencies, quantity omission or error, differing site conditions, and design changes. Second, the most critical change order related challenges within IDOT's infrastructure projects include approval procedures, compensation considerations, and applicable laws. This paper offers flowcharts, synopsis of opportunities and risks, and a checklist to help the contracting parties better administer change orders. Ultimately, the contributions of this paper to the practice include: (1) minimizing the number and amount of change orders, (2) helping the contracting parties better understand how their individual responsibilities contribute to the proper processing and management of changes and variations, (3) offering contractors the ability to visualize the different steps involved in the approval of change orders, (4) assisting the project stakeholders in identifying change order-related areas for improvement, and (5) allowing project owners to better mitigate, manage, and administer the contractual aspects of change orders.

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“…Even so, McCormick (2003), Crowley et al (2008), and Sun et al (2013a) found agencies unprepared for this eventuality with existing disincentive valuation practices often insufficient to support legal enforceability. Asaad and Abdul-Malak (2020) also found agencies lacking strategies to successfully enforce and recover disincentives. These findings were mirrored in nonUS developed nations (Twyford, 2007) as well as developing nations (Tuuli et al , 2007) when attempting to enforce LDs.…”

Section: Legal Challenges Faced By Clients In Imposing Disincentivesmentioning

confidence: 99%

“…There are generally three international jurisdictions concerning the execution of disincentives as follows: common, civil and Islamic law. The findings within this paper only apply to English common law jurisdictions as only this legal system requires owners to defend their costs as developed at the time of contract execution (Asaad and Abdul-Malak, 2020). The authors found existing publications which show I/Ds being used to accelerate projects in Sweden, Denmark, Germany, France (AASHTO, 1991), Kuwait (Al-Tabtadai, 2002), China (Tang et al , 2008), Australia (Rose and Manley, 2010), United Kingdom (Meng and Gallagher, 2012), South Africa (Ogwueleka and Maritz, 2013) and India (Hasan and Jha, 2019).…”

Section: International Applicabilitymentioning

confidence: 99%

Mitigating the legal challenges of imposing disincentives on nonperforming transportation projects

Alleman

2020

ECAM

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PurposeThe publication presents an analysis of the cost and schedule performance of incentive/disincentive projects and case studies toward developing a systematic disincentive valuation process, with Construction Analysis for Pavement Rehabilitation Strategies (CA4PRS) software integration that aids agencies in minimizing the likelihood of court challenges of disincentives.Design/methodology/approachFrom a California transportation database, the authors performed cost and schedule analyses of 43 incentive/disincentive (I/D) projects and case studies on four of those I/D projects. Interviewees included subject matter experts from transportation organizations to ensure applicability and maximum value-adding, and the process was implemented on ten California transportation projects and monitored for performance.FindingsThe presented process mitigates the contractor's ability to claim disincentives as penalties in a court of law through the following: (1) all calculations are performed using project-specific bases, backed by estimations of actual incurred costs; (2) the CA4PRS software allows for estimation transparency and (3) the clarity of cost inclusions reduces any chances of “double-dipping” between disincentives and liquidated damages.Practical implicationsTransportation agencies have historically faced legal challenges to their enforcements of disincentives. As agencies continue to apply disincentives on more megaprojects, contractors will likely attempt to pursue legal challenges more frequently. The presented process mitigates the likelihood of these challenges going to court and increases the accuracy and efficiency of disincentives.Originality/valueWhile there have been publications that discuss the legal challenges of imposing disincentives, they mainly provide guidelines and lack applicable processes. Existing literature that does present incentive/disincentive valuation process focuses on incentive valuations and neglects the disincentives' legal challenges. The following publication fills this gap by presenting an applicable disincentive valuation process for transportation projects which incorporates the guidelines for legal mitigation.

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Legal Perspective on Treatment of Delay Liquidated Damages and Penalty Clauses by Different Jurisdictions: Comparative Analysis

Cited by 30 publications

References 25 publications

Guidelines for Responding to COVID-19 Pandemic: Best Practices, Impacts, and Future Research Directions

Guidelines for Responding to COVID-19 Pandemic: Best Practices, Impacts, and Future Research Directions

Management of Change Orders in Infrastructure Transportation Projects

Mitigating the legal challenges of imposing disincentives on nonperforming transportation projects

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