ST KITTS & NEVIS Law and Practice Contributed by: Dahlia Joseph Rowe and Daisy Joseph Andall, Joseph Rowe, Attorneys-at-Law
age to the property caused by the tenant or any unpaid utility bills left by the tenant.
of refraining from continuing the remaining unit until the cost of the work done for each unit is paid. Additionally, if, in the development of the various units, an unexpected or unanticipated risk presents itself or if the development of one unit is more challenging than others, then the contractor is able to increase the amount to meet the risk. 7.2 Assigning Responsibility for the Design and Construction of a Project It is standard procedure that a head architect or contractor supervises a development project and allocates tasks to the various persons work - ing on the project. The head contractor operates as a bridge between the owner and the workers. Normally, that contractor is also responsible for paying the persons working on the project. It is the norm for the head contractor to set up an integrated system in which the designers and builders of the project work together to safe - guard against making avoidable changes and unnecessary re-evaluations in relation to the project. This system allows for the construction workers to ascertain the information needed to produce a more accurate representation of the design since the designers and construction workers would be working simultaneously. 7.3 Management of Construction Risk The devices most commonly used to manage construction risk on a project are indemnifica - tions and warranties. Indemnifications An indemnification clause in a construction con - tract is included to ensure that the general con - tractor of the project indemnifies the property owner from any harm caused by its workers.
7. Construction 7.1 Common Structures Used to Price Construction Projects The most common methods used to price con - struction projects are lump sum contracts and unit price contracts. Lump Sum Contracts If there is a lump sum contract, the contractor estimates the total cost of constructing the pro - ject and the fixed lump sum price is included in the contract. Therefore, the owner of the proper - ty will only be responsible for paying that amount in accordance with the terms of the contract. With this type of contract, the owner effectively assigns all the risk of completing the project to the contractor, who can, in turn, request a higher mark-up. However, once the fixed sum is agreed, if the contractor underestimated the cost of the project, the contractor’s profit will be reduced. Likewise, if the contractor overes - timated the cost of the project, then his or her profit will be increased. Unit Price Contracts If there is a unit price contract, then the risk of overestimating or underestimating the cost of the project is relinquished since the contrac - tor would give an estimate for the work to be done on each unit or phase of the development, and the owner would be responsible for paying the contractor periodically for the work done on each unit or in advance of the work on each unit. This method is typically used for large pro - jects, as the contractor would have the option
894 CHAMBERS.COM
Powered by FlippingBook