Michael Seyoum Construction Contract & Law

Assessment number 2:
Assessment on Construction Law and Liability

1. What do you understand by the concept & scope of construction law? Info: for the
discussion as related to scope you may consult relevant clauses of the MDB-FIDIC
(2006);

Construction law is a body of law that deals with the matters related to the construction.
It covers wide range of legal issues including: contract law, bonds and bonding,
guarantees and securities, liens and other security interests, tendering, construction claims
and related consultancy contracts.

The scope of construction related laws comes from and broadly encompass the following
three areas of law;

 The relevant laws of Ethiopia,

 The relevant laws of other countries and

 The relevant aspects of public and/or private international law

2. What do you understand by the statement: “There is no construction law but

construction related laws”? Do you agree with the statement? Discuss by providing
your reasons;

The nature of “construction law” is thus eclectic; viz., it brings all relevant regime of
laws (public & private law regimes) together to regulate the construction process & its
management as illustrated herein below. Therefore, we do have construction related laws
and not construction law as such.

As the above statement concludes there is no construction law but there are construction
related laws. For example: all the laws on construction of building project are drived
from the related laws of the country, of the international related laws and other
international standards. So for any construction project there is no construction law. But
there is construction related laws.
Michael Seyoum Construction Contract & Law

3. Is there any relationship among the following layers of issues: construction

industry; construction program; and construction project? define each concept &
discuss their relationship, if any;

 Construction industry: construction industry is regulated industry. Construction

industry regulations mean the regulations of the industry as a whole, at cross
developmental sector level, to provide leadership to the industry in an holistic and
integrated manner both at federal and regional level.

 Construction Program: is a program of a construction project. Construction

program is made to clear the parties involved on the construction activity how the
construction will be done. It also specifies the start date and the end date of the
project life. On construction program, the parties involved will be aware of the
working days and the public holidays and non working days due to other reasons.

 Construction Project: construction project is a project which is main part of the

project involves construction.

Construction industry is collection of construction projects. Construction industry is the

main regulatory body for the construction projects. Construction program is a program
which shows the detailed plan of the construction project implementation. One
construction project could have different construction program that would be updated
according to the ground situations.

4. Why a construction project being so unique in terms of its legal regulation? Identify
& discuss the construction project phases & the applicable regulatory issues & laws
as related to regulating such respective construction project phases;

Construction is unique because there is no unified construction law or code, rather there
is construction related laws. So construction is regulated by the related laws. That’s the
unique nature of the construction.

Construction project have different phases:

 Project designing phase: for this phase of the construction, it is regulated by the
civil code and the relevant designing codes and principles.

 Project tendering and procurement phase: this phase is regulated by PPA

regulations, other international standards and other local laws.

 Project implementation: During implementation phase the rules are the civil code
and other relavant construction rules and regulations.
Michael Seyoum Construction Contract & Law

5. What do you understand by the concept of liability? Identify the possible types of
legal liability; How do you apply the concept & such identified types of legal liability
in the construction industry? say as related to the employer; as related to the
contractor; as related to the consultant (design vs. supervision)?

Liability means accountability.

Legal liability is the accountability of the party for the things done by them and found to
be defective. According to article 2027(1) of the civil code of Ethiopia, “irrespective of
any undertaking on his part, a person shall be liable for the damage he causes to another
by an offence.” So any of the contracting parties, like the employer, the contractor, or the
consultant are legally liable for their duties mentioned on the contract.

The employer is legally liable for the obligations undertaken. For example the employer
is responsible for the payment related obligation. So for the delay of payments the
employer is legally liable.

The contractor is legally liable to do the works as per the specification. If there is any
failer on the work then the contractor is legally liable, and should correct and compensate
the other party.

The design consultant is legally liable if there is defects on the design of the project
works. The supervision consultant is also legally liable for the things done by him/her.