CMS Annual Review of English Construction Law Developments 2016: An International Perspective

United Kingdom
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Welcome to the 2016 edition of our internationally focused Annual Review of English
Construction Law Developments.

2015 has been an eventful year for English Construction Law, with a number of important
decisions from the UK’s highest courts, the Supreme Court and Privy Council, as well as the
English Court of Appeal. 2016 shows no sign of slowing, with a number of the cases covered
in this year’s Annual Review presently under appeal, including one to the Supreme Court.

The articles in this year’s edition cover rulings from the Supreme Court and Privy Council as
to the validity of liquidated damages clauses and the meaning of key causes in the FIDIC
suite of contracts, as well as an expansion of the law governing the exercise of contractual
discretions (which are frequently deployed in construction contracts). We also cover an
important decision of the English Court of Appeal, now on appeal to the Supreme Court,
with regard to the interpretation of design obligations in construction contracts and the
interplay between fitness for purpose and reasonable skill and care obligations. New
guidance has also been given by the English Court of Appeal as to the interpretation of
insurance obligations. Particular care is needed to ensure that these obligations do not
inadvertently override the allocations of risk agreed by the parties in other parts of the
contract with regard to defective work or the consequences of each other’s negligence.

Repeating themes from previous editions, we have also included updates in relation to
on-demand securities, good faith obligations under English law, and English law’s approach
to exclusion and limitation clauses. The cases continue to provide a developing picture in
relation to these issues. Finally, and prompted by a number of cases on the topic in 2015,
we take an in depth look at the role of 'entire agreement', 'no amendment' and 'no waiver'
clauses in controlling management risk on construction projects.

We hope you enjoy our analysis of the law and recent cases on the above topics. Should you
wish to receive more frequent updates throughout the coming year, please feel free to sign
up for our Law-Now service at and select 'Construction' as your chosen
area of law.

We look forward to working with you over the coming year and wish you a prosperous
continuance of 2016.