Construction Law Asia

June 2014

In this edition:

Finally, some security for payment in Hong Kong

The long-awaited legislation proposed for security of payment will shortly see the light of day. It has been the subject of a decade-long debate since the Tang Report was first published in 2001, which highlighted the problems associated with payment disputes in the construction industry in Hong Kong and recommended that ‘consideration should be given to…enacting security of payment legislation'. The public consultation process for the proposed legislation was originally due to take place some months ago, but signs suggest this will commence very soon, and the much anticipated legislation will hopefully come into effect as early as 2016. This article considers some of the key provisions of the proposed legislation.

Contracts (Rights of Third Parties) Bill: Implications for the construction industry

The Legislative Council is currently debating the Contracts (Rights of Third Parties) Bill, and the bill may be passed as early as in the second half of this year. The main purpose of the proposed legislation is to reform the doctrine of privity by granting statutory rights to a person to acquire and enforce rights under a contract to which he is not a party. This article considers the potential impact of these statutory third party rights on the construction industry. 

Are some things better left unsaid? A discussion on implied terms

The legal principles governing the implication of terms in a contract are probably among the most settled. This, however, does not put an end to unsuccessful attempts by litigants to imply terms. In this article, we will briefly review the law on implied terms, see how the law was applied in a fairly recent English case involving a building contract, and finally consider its relevance to us.

Termination for convenience: Does it mean what it says?

Until recently, clauses permitting termination for convenience were a rarity in standard form construction and engineering contracts. It remains the case that the Hong Kong forms contain no such provisions. Increasingly, however, other standard forms now enable the employer - and less often the contractor - to bring the contract to an end without default, breach or even a specified reason.

Author(s) Steven Yip, Samuel Cho, Sonia Ng, Henry Sherman