Valid Cause to Declare Force Majeure? 3

[Ashereng]

Hi Everyone,

Generally speaking, in the casuses for declaring "Force Majeure", is it common to for "shortages of necessary labour" to be included as a valid cause to declare Force Majeur?

 

[Ashereng]

DRC1,

Thanks for your reply. 3% or 4% is still higher than what I have see.

[quote}I would not try to pass the risk for severe labor shortages on to the contractor, because as RDK pointed it out, there is in reality, little good that will come out of it.

Actually, the inclusion of "shortages of necessary labour" as a valid clause to declare Force Majeur is going the other way - we are sharing the risk. We are recognizing that labout shortage may be a problem, and thereby allowing the contractor to declare FM, thereby allowing for relief from costs, penalties and schedule.

If there is no clause to declare FM, then the contractor is subject to the penalties incurred as a result of a shortage of necessary labour.

 

[eyec]

instead of beating FM drum, have you considered milestone/late penalties for not meeting schedules?

if the contractor accepts the contract based on the risks of not meeting schedule they would be more inclined to bid it more conservatively and possibly take the labor pool and material deliveries more seriously.

also, if you (the owner) make changes that cause delays you would share the risk of missing or moving milestones.

afterall, you both have a vested interest in a successful completion of the project.

 

[RDK]

Remember a more conservative bid translates into a higher cost to the owner.

I get back to the question of what is the main objective.

When I worked for government going a nickel over budget was a deadly sin. Increasing a $100,000 budget to $100,001 was harder than getting the $100,000 approved in the first place.

Thus you put all the risk onto the contractor and every failure to meet the due date and cost overrun was a contractor risk item. Naturally the result was high costs and sometimes high profits for the contractor sometimes bankruptcy.

Fighting that mindset was my biggest frustration when I worked for the government.

Real world considerations like labour shortages simply did not enter into the issue. If the contractor bids on the job then he tales all the risk as s normal business practice in this viewpoint.

If your objective is to get the work done first are willing to take back some risk then you would be open to considering these sorts of factors. I have always found that as you take care of those under you in the food chain so shall they take care of you. Thus if you put the screws to a contractor unfairly then he will return the favor. He can simply stand by and watch you screw up and let the complete blame fall on you.

If you work with the contractor on these issues then he will help you out as well and go beyond the contract to help the job jet done.

What is your objective? To pin the alligator in a wrestling match or drain the swamp?


Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[Ashereng]

eyec

Thank you for your suggestions. Yes, we do consider milestone/late penalties, etc.

My OP is

is it common to for "shortages of necessary labour" to be included as a valid cause to declare Force Majeur?

Have you seen a "shortages of necessary labour" force majeur clause in a contract? If yes, how common is it?



RDK,

I get back to the question of what is the main objective.

What is your objective? To pin the alligator in a wrestling match or drain the swamp?

I am trying to gauge how common it is to include a "shortage of necessary labour" clause in a contract.

 

[Ashereng]

Thank you everyone for your postings and contribution of experiences.

In case anyone else is wondering about shortages of labour in force majeur clauses, you can add one more contract that contains it.

Once again, thanks.

 

[norzul]

In our contract we use this:

The events falling within ‘Force Majeure’ include but are not limited to occurrences of and consequences arising out of acts of God or force of nature, unusually severe
weather, lightning, earthquakes, tidal waves, acts of war or public enemy, riots, strikes, sabotage or similar unforeseeable events beyond the control of the parties or any one of them.

 

[Ashereng]

Thanks norzul.

What you are saying is that you guys do not include "shortages of necessary labour" in your force majeure clauses?

 

[Chris0164]

Hi,

somewhere in your contact you should include a paragraph that labourers cannot claim more than two times 4 or 8 hours per labourer when they run out of work. This helps you to limit your costs in case of idle time (possibly caused by force majeur or not enough work for that moment).

Success !!


Kind Regard,

Chris