IOPSA Tech Talk: Two wrongs don’t make a right’ Part 3

By Eamonn Ryan, based on an IOPSA Tech Talk presentation hosted by Brad Boertje BSc QS F A Arb

This is Part 3 of a three-part series.

“I am an adjudicator and arbitrator servicing the needs of the construction industry. I’m not an attorney, and my content does not constitute legal advice. It’s my interpretation of the subject matter only.

“I’m often asked the question, what is the difference between a patent and a latent defect in a construction job. This occurs in my business when people come to me, with disputes on snag lists, and items on a building/plumbing project, where there’s a difference of opinion, and more,” says Boertje.

 The discussion in the full three-part series covers:

• the difference between patent and latent defects
• the common defect liability period
• how the common law works
• vicarious liability, which is a big word, but it’s a simple principle
• the legal doctrine of prescription
• and something on ‘two rights don’t make a wrong’ in law, which basically means that when one party is a default, it’s not a good idea to go into default yourself in order to address that default

“For those who are familiar with the JBCC (Joint Building Contracts Committee), it is the most common building contract in South Africa, especially for larger contracts. The JBCC describes a defect as ‘any aspects of materials and workmanship, forming part of the works, that does not conform to the agreement and/or construction information’. The contractor or subcontractor has the obligation to deliver a product meeting a certain quality standard. Now, the JBCC definition is generally the definition that applies on any contract. The first thing that comes to mind is that you – the builder – often don’t design the work. Somebody else does the design – wet services or a civil engineer, etc.

Two wrongs don’t make a right

“So there’s a ‘two wrongs don’t make a right’ rule. What often happens is that somebody phones me and says they haven’t been paid by the contractor so they’re leaving site. Now, you can’t do that. If one person breaches a contract, the remedy is not to breach it yourself to try and make it right. Two wrongs don’t make a right. Each party has an obligation to do something, you have an obligation to deliver construction works, and your client has an obligation to pay. If your client doesn’t pay, then there is normally a remedy or process that you have to follow to get them to pay. This is contained in the JBCC contract – though there’s no reason why you can’t do this on your own terms and conditions. It goes like ‘If you don’t pay by the agreed payment date, I will put you on notice to pay. And after three days, if you haven’t paid, I will then lawfully stop working and I will then only resume once you make payment’.

“By doing that, and following the process, you keep yourself out of breach of contract. So it’s perfectly possible for both parties to get breached at the same time. It’s not a good idea because if you are working under the JBCC, or any of the alternatives, then you will find yourself in a position where you can’t, for example, cancel the contract for their breach – because you are also in breach. Therefore, make sure that you always keep yourself out of breach when you are addressing somebody else’s breach.

“As a final point, all work has to be entirely complete. In the common law, your client has no obligation to pay you until you have finished everything to 100% completion. That’s why (in a contract) it’s important for you to define milestones for payment.

“As a final word of advice to everybody: regardless of whether you’re a contractor or working for a contractor, make sure that you have a contract in place. You can’t just work off the back of the cigarette box. Even if it’s a one page contract you must define the payment terms, you must define the defects period and there’s certain mandatory things you have to have. My recommendation is that you have a signed contract to protect you,” concludes Boertje.