Reference no: EM133731262

PART A

Prestige Developments has decided to embark upon the construction of a student accommodation block in Leeds city centre. The accommodation block will be 20 storeys high and will house 260 students, complete with a bar and gymnasium located in the basement. The project was awarded, after a competitive tender, to ABC Contractors. The anticipated start date is 1st August 2020. The Date for Completion is 31st August 2022 in readiness for the new academic year.

The contract for the project is an amended JCT Standard Building Contract (with quantities) 2016. Clauses 3.7 to 3.9 have been removed. The Contract Particulars state that liquidated damages are "at a rate of £170,000 per week" and that the Rectification Period is "12 months".

In September 2020, during the excavation phase of works, ABC Contractors discovered large boulders which had the effect of delaying the excavation works for a period of 3 weeks and resulted in additional project costs. These boulders did not feature in any of the documentation supplied by Prestige Developments. In February 2021, during the construction phase of works, heavy rainfall and strong winds caused additional delays of 2 weeks. These problems were further compounded by the requirement to relocate electricity cables which caused a further delay of 1 week while npower, the electricity utility company, relocated the services. Then in November 2021, ABC Contractors, without informing Prestige Developments, employed the services of an electrical contractor to undertake the installation of the electrical works. However, the tradesmen supplied by the electrical contractor were inexperienced and, as a result, the installations were defective. The necessary remedial works caused further delays and additional costs.
On 25th June 2022, Prestige Developments took partial possession of the bar and gymnasium (located in the basement), in addition to the student flats located on the first 4 levels, which in total equated to 25% of the project. In November 2022, with the project still incomplete, Prestige Developments began to levy the agreed liquidated damages sums as set out in the Contract Particulars. ABC Contractors informed Prestige Developments that the liquidated damages are "not a genuine pre-estimate of the loss and are therefore unenforceable". Prestige Developments responded by stating that "the liquidated damages are commercially justified and are therefore enforceable - it is irrelevant whether or not they are a genuine pre-estimate of the loss".
Platinum Developments has decided to embark on the construction of a hotel in the centre of York. The project is put out to tender and Cressington Contractors are the successful tenderers in the sum of £14.8M. The form of contract is the JCT Standard Building Contract (with Quantities) 2016. Cressington Contractors commenced Works on 1 September 2021, and the planned Date for Completion is 10 November 2023.
A redundant 5 storey office building in Leeds city centre is demolished and the cleared site is to be developed for high-quality housing. The demolition and new build project is let under the JCT Standard Building Contract (with Quantities) 2016. The Contract Sum is £9M and the contract period is 15 months. The employer is HC Group and the contractor is Pettit & Small Ltd. Pettit & Small Ltd commenced the Works on 30 November 2021.
A joint government and privately financed venture known as HR7 has commissioned the construction of a high-speed rail link between Leeds and Manchester under the NEC4 Contract Option A. Option W2 and Y(UK)2 apply. The Contract Sum is £62M. The assessment interval is ‘one calendar month' (with the assessment date being the last day of the month). Phase one of the works, which comprised the design and construction of the track and associated earthworks, were awarded to Rapid Rail Ltd. Rapid Rail Ltd commenced construction on 1 March 2022 and are due to complete on 14 September 2025.

ABC Contractors seeks additional time and monies for the above-mentioned issues. However, the A/CA is refusing to consider extending the contract period or making any additional payments to ABC Contractors. Further, Prestige Developments seek to take-action against ABC Contractors for alleged unlawful sub-contracting of the works.

Question: Identify the issues to be addressed and advise ABC Contractors accordingly. Reference must be made to relevant contractual provisions and case law.