Topic: Effects of Increase in Quantities in Re-measurement Contracts on the Contractor’s Payment under UAE Law
Introduction: Generally, the construction contract price is calculated on the basis of the procurement method as agreed in the contract, whether the procurement method is re-measurement, lump sum price, cost plus, guaranteed maximum price or target cost…etc.
And in re-measurement construction contract the ultimate cost of the project is determined by the quantities required for completion of works and the contractor is paid for the actual quantities of work executed in consideration of final quantities as the individual rates stated by the contractor in the bid. Since re-measurement construction contracts are well recognized in the construction sector in UAE.
The article no. 886 of civil transaction code obliged the contractor to immediately notify the employer in the case that it’s become apparent to exceed the planned & estimated quantities of the pre-agreed plan during the execution period in the sense that such increase will increase the cost.
On the other hand, in absence of such notice the law virtue to article no. 886 may not entitle the contractor for the payment of the excess quantities.
Furthermore, if the quantities substantially exceeded the planned quantities then the law entitles the employer to terminate the contract.
This study will explore the role of article no.886 in contractor’s payment in re-measurement contracts. And it aims to illustrate the terms of the provisions stated in article no. 886; and will answer the below questions:
• What is impact on the contractor’s entitlement of additional payment in case of increase of the estimated quantities?
• Does this article no. 886 serve the benefit of both the contractor and the employer? If not, then is it considered injustice to the other party?
• the paper will scrutinize the interpretation of the term “Substantially exceeded quantities” in the perspective view of UAE law in practice; the construction professional parties in which such excess entitles the employer to withdraw the contract.
Methodology: The method shall be used in collecting data for this research will be obtained by reviewing the literature of overview of the re-measurement construction contract particularly under UAE law such as books, reports, journals and articles related to the same subject.