Liquidated damages on the other hand are intended as a genuine pre- estimate of damage which is not easily capable of precise estimation, and a clause providing for liquidated damages is enforceable as such. The way in which the clause describes the matter is not conclusive either way.
Thus the provisions of Clause 17 providing for the payment of what are called liquidated or ascertained damages might well be construed as imposing an unenforceable penalty if the rate stated in the appendix were shown to be disproportionately high having regard to the actual damage to the owner in contemplation of the parties at the time when the contract was made.
It follows that the architect should not select an abitrary sum, but one which bears a real relation to the loss which may be anticipated. If this is done, there is the advantage that the sum specified may be recovered as such, without proof of the actual damage suffered, subject only to legal argument (which would only succeed if a
bad miscalculation had been made) that the damages were so dis- proportionate as to amount to a penalty.
It should not be thought, however, that no remedy exists even if the provisions should turn out to be what the law regards as a penalty. In such circumstances, the owner may still sue for such damage as he can show himself to have suffered, and this even if it should turn out to be grea- ter than the amount stipulated for in the clause imposing the penalty.
This may be an appropriate place also to mention a common miscon- ception that a provision for liquidat- ed damages is invalid unless there is a matching provision for the payment of a bonus upon earlier completion. Whatever basis there may be for this conception in commercial morality, there is no basis for it in law.
POSITION OF CONSULTANTS
A consultant is usually, although not necessarily, employed by the architects, and generally speaking there is no privity of contract, as we say, between a consultant on the one hand and the contractor ог sub- contractors on the other.
It follows that when a consultant communicates directly with a contrac- tor or sub-contractor he must be regarded in law as speaking on behalf of the owner, or the architect as agent for the owner.
Similarly, as there is no privity of contract between a sub-contractor and the owner or his architect or engineer, it follows that conversations between the sub-contractor and such persons have no legal significance unless the sub-contractor happens to be acting as agent for the contractor in making or receiving the communi- cation in question.
No doubts it is often convenient to short-circuit the normal channels of communication in the ways sug- gested above, but having regard to the legal relationship between the parties it is obviously essential that the builder and the architect should be kept informed of everything said or written by or to a consultant, any sub-contractor, insofar as the communication relates to the actual working out of the contract.
RESPONSIBILITY OF MAIN CONTRACTOR
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Despite the practice of causing more and more of the work to be done by sub-contractors, whether nominated or otherwise, the builder alone remains responsible to the owner, in the absence of some special agreement. There is privity between him and the owner and no privity between the owner and the sub- contractor.
It follows that the builder cannot disassociate himself from responsi- bility for what is done by a sub- contractor, whether nominated by the architect or otherwise, except for the fact that, under what some people believe to be the unwise and unfor- tunate provisions of Clause 18 of the standard form, he is relieved from responsibility for relay on the part of nominated sub-contractors and nom- inated suppliers. Even if all, or substantially all, the work is done by sub-contractors, the builder still has a key role, to co-ordinate, to plan proper continuity, to ensure adequate preparation for following trades and operations, to keep the job moving to schedule, and so on. This is work requiring high managerial skill, quite apart from the necessary expertise in building and engineering techniques.
RIGHTS OF BUILDER
I have adverted to possible claims by the builder under Clauses 1(e), 2, 18, 21(g) and 22(1)(d) of the standard form. Clause 1(e) refers to loss or expense involved in complying with architect's instructions. A question as yet unresolved is whether this gives the builder a right to claim where the architect's instruction is otherwise unobjectionable, but comes too late.
THE HONG KỌNG & FAR EAST BUILDER—VOLUME 19, NUMBER 2
This is important, because the obliga- tion imposed by Clause 2 to provide further drawings within a reasonable time, does not extend to other instructions
It may well be that if neither Clause 1(e) nor Clause 2 is broad enough to cover a delay in providing an instruction other than a drawing, one could imply an obliga- tion to provide all necessary instruc- tions within a reasonable time in any event, without any specific clause in the contract.
There may be a temptation on the the part of owners, architects and engineers to attempt, either by amend- ment of the contract itself, or by provisions inserted in the specification, to abrogate the sights conferred upon the builder by these clauses, as well as clause 21(g) and 22(1)(d).
Yet the rights conferred by these clauses seem reasonable enough; indeed they might even be said to be essential to ensure proper building practice. In my opinion the remedy may lie not so much in any attempt to cut down the rights, but rather in the taking of steps to ensure that the builder has no occasion to complain and that any complaint is identified and remedied at its inception, before the builder has suffered substantial loss or injury through it.
For example, many of these com- plaints could be avoided if proper provision were made by the contract for the joint preparation, and joint revision of a proper progress schedule, indicating the time at which the builder must have the instructions, the drawings and details, the nomina- tions of sub-contractors and sup- pliers, which he needs in order to get
work his building or planned time.
up in the
The overall planning of the building work, to which such а schedule is the indispensable hand- maiden, is after all the essential managerial task of the builder, but one which he cannot perform without the constant co-operation of the architect. A clause ensuring that this is seen from the outset as the joint and overriding responsibility would do much to avoid the friction and threats of legal action which other- wise eventuate.
For the rest, it should be sufficient to provide that the builder shall give written notice whenever he claims that the time has arrived when he should have received such an instruc- tion, drawing or nomination, and that he will be currently suffering damage if it is not forthcoming. Taken in conjunction with the pro- gress schedule, this would serve to
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