Archive: January 2017

1
Unfair Contract Terms with Small Businesses: Implications for the Construction Industry
2
New UAE Penal Law Allowing for the Imprisonment of Biased Arbitrators Leads to Widespread Concern and Uncertainty in International Arbitration Community
3
New FIDIC Yellow Book 2017: Major Changes
4
Drones in Construction: Legal Overview

Unfair Contract Terms with Small Businesses: Implications for the Construction Industry

By Sandra Steele and Andrew Hales, K&L Gates, Sydney

The unfair contract term prohibitions in the Competition and Consumer Act 2010 (Cth) were recently extended to cover standard form contracts with small businesses.

The new law provides for unfair contract terms to be declared void and unenforceable. The relevant contract will then only continue to bind the parties insofar as it can operate without the unfair terms.

These changes may have significant impacts on the building and construction industry as terms typically found in construction contracts are likely to be subject to the prohibitions. We recommend that principals and contractors identify and review any standard form contracts they may have with small business counterparties that may be impacted by this new regime.

To read the full alert, click here.

New UAE Penal Law Allowing for the Imprisonment of Biased Arbitrators Leads to Widespread Concern and Uncertainty in International Arbitration Community

By Michael P. Cotton, K&L Gates, Pittsburgh

Through a recent amendment to Article 257 of the UAE Penal Code, any arbitrators, experts, or translators who issue biased decisions or opinions in UAE arbitration proceedings may now be subject to criminal liability. The new law has led to widespread concern and uncertainty in the international arbitration community.

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New FIDIC Yellow Book 2017: Major Changes

By Matthew E. Smith, Inga K. Hall, and Sarah A. Drinkwater, K&L Gates, London

Introduction

FIDIC has long been renowned for its flexible suite of standard forms of contract for use on international construction and engineering projects. FIDIC is the “contract of choice” for international infrastructure and process plant projects, particularly in Eastern Europe, Africa, the Middle East, and Asia.

Two of the key strengths, or attractions, of the FIDIC suite of contracts are, firstly, that they are capable of use across a diverse range of legal systems and, secondly, that they have been pro-actively updated and added to over time to respond to the needs of the industry.

By way of background to this last point, FIDIC produced a core ‘Rainbow Suite’ of 4 contracts in 1999: the Red Book (for Building and Engineering Works), the Yellow Book (Plant and Design-Build), the Silver Book (EPC/Turnkey Projects) and the Green Book (short form contract). Additional forms have subsequently been added to the Rainbow Suite, including the White Book consultant’s appointment in 2006 and the Design-Build-Operate Gold Book form in 2008. In early 2016, FIDIC formed a working group to focus on updating its existing suite of contracts and to add entirely new forms of contract (including sector-specific tunnelling and renewables forms); with intentions to release such new and updated contracts over the course of the next two years.

Following the FIDIC International Contract User’s Conference in December 2016, at which K&L Gates partners, Matthew Smith, Kirk Durrant and Rafal Morek, spoke on trends in amending FIDIC contracts, attendees were able to obtain a copy of the much anticipated “special pre-release version” of the 2nd Edition of the Yellow Book (2017) and the 5th Edition of the White Book (2017).

This Alert provides a high-level overview of the changes which will be made to the Yellow Book, its first update in over 15 years. The 2017 Yellow Book 2nd edition changes are likely to have wide-reaching impact as the Yellow Book remains the most commonly used contract in the Rainbow Suite. Some of these provisions reflect innovations introduced in the Gold Book 2008 which are now being integrated into the new versions of the ‘1999 suite’ (Red, Yellow and Silver) but many other changes are completely new.

One thing that is clear is that the changes are very extensive indeed, both in terms of length and effect, and whether you are an Employer or Contractor or an Engineer or another consultant, it is essential that you are fully aware of these changes when the final versions of the new contracts are issued this year.

In due course we will be releasing more detailed commentaries on the ‘new’ Yellow Book and the other forms which are due for release this year as well as conducting workshops on the use of the new forms. If you are not already on our mailing list and wish to be informed of these, please contact Matthew Smith (matthew.smith@klgates.com) or Rich Paciaroni (richard.paciaroni@klgates.com).

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