massey 218764 construction contracts contractual risk

1. Contractual risk assessment
Select two construction
contract forms.
You may use
Example: FIDIC 1999 vs N
ZS 3910:2013
Example: FIDIC 1999 vs NZS 3910:2003
Perform contractual risk assessments on clauses that may relate to the effects of

19 in construction projects
in New Zealand
. Compare the risk distributions
between both the client and the contractor in both forms.
You MUST cite the number and the title of the clauses that you referred to in your risk
assessment. Please do not copy and paste the whole clause in your assessment.
You MUST attach the
assessed clauses in the appendix.
Minimum word count (excluding references) =
[50 marks]
2. Scenario

based assignment question
This is a project to construct a hotel in Auckland, New Zealand. The contract is a
lump sum traditional. Below are the chronology of events in this scenario.
On 15 April 2020, the contractor issued a default notice to the client for two pending
payments with a total amount of $300,000.
Semester 2, 2020
According to clause 14.3.3 of the contract, the client must rectify this default within 10
working days, and failure to rectify this will give the contractor a right
to request the
contract administrator to suspend the progress of the whole works.
Clause 14.3.3 of the contract also provides that following such suspension, the
contractor would be entitled to terminate the contract by giving notice in writing to the
To preclude the contractor from invoking their rights under clause 14.3.3, the client
must make the payments before 30 April 2019. Unfortunately, neither the client nor
the contract administrator responded to the default notice, and no
payment was
made until 30 April 2019.
On 25 April 2020, the contract administrator issued a work suspension order to the
contractor on the basis of site safety breaches. The contractor was not operating on
the site in any event, but the contract administr
ator advised that
all work on site
other than that required to make the site safe is suspended
. The suspension was to
remain in place
until we are satisfied that you can provide a safe working
On 30 April 2020 at 5.00 pm, the contractor w
rote an email to the contract
administrator requesting the work to be suspended following clause 14.3.3.
On 1 May 2020, at 10.30 am, the contractor emailed the contract administrator about
their intention to proceed with contract termination. A terminatio
n notice was attached
to an email shortly after. At 3.45 pm the same day, the client paid the outstanding
amounts of $300,000 to the contractor.
On 15 May 2020, the client challenged the validity of the contractors termination
notice and alleged that the
contractor had abandoned the contract by persistently,
flagrantly or wilfully neglected to carry out their obligations under the contract.
On 30 May 2020, the client terminated the contract on the grounds of breach of
contract by the contractor and sough
t to call on their Performance Bond.
Based on the facts above, discuss the issues in the administration of this contract in
respect of:
1. The effect of the work suspension order by the contract administrator;
2. The validity of actions and
termination by the contractor;
3. The validity of actions and termination by the client.
4. Propose actions or best

practices that could have been
employed by the contract
administrator to handle the situation above better

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