On February 28, 2020, Warsaw hosted the “Construction Contract Adjustment – Theory vs. reality.” seminar on construction contract adjustment. CCM Construction & Claims Management would like to thank all participants for their participation in the event!
This event, organized together with the “BARYLSKI T., OLSZEWSKI A., BRZOZOWSKI A. Law Firm, confirmed its organizers in the belief that the issue of construction contract adjustment is still relevant and requires broad debate. The event addressed a wide spectrum of issues concerning construction contract “adjustment”.
Prof. dr hab. Adama Brzozowskiego, PhD, “BARYLSKI T., OLSZEWSKI A., BRZOZOWSKI A.” Law Firm, began his speech with a general remark structuring the theme of the event, underlining that the term “adjustment”, although commonly used, does not really reflect the essence of the matter. In civil law, the term “adjustment” is used primarily as the opposite of the principle of nominalism, pursuant to which the liability object is, from the moment the liability arises, a certain sum of money, and benefit performance is effected by payment of the face amount. However, “adjustment”, whether judicial, statutory or contractual, is an exception to this principle. The main premise for the application of exceptions to the principle of nominalism, i.e., the so-called “adjustment”, is, first and foremost, a decrease in purchasing power.
During his “Contractual Adaptation Clauses” speech, Prof. dr hab. Wojciech Kocot, PhD, “BARYLSKI T., OLSZEWSKI A., BRZOZOWSKI A.” Law Firm, drew close attention to the primary purpose of contractual adaptation clauses designed to make the contract more flexible and thus not to be seen as a threat to the Employer. Contractual adaptation clauses should also ensure that the Employer may adapt to changing circumstances. If they are not included in the contract or if significant restrictions are imposed on the mechanisms of their application, they will only lead to higher future costs incurred by the Employer, as foreign experts have long pointed out.
During his “What’s Adjustment and What Should It Be Used for?” speech, Eng. Andrzej Michałowski, MSc., CCM Team Contract Consulting Expert, emphasized that the mechanisms of contractual adjustment applied nowadays require further improvement and, as a rule, prove reliable only in stable economic conditions, thus when the level of inflation is relatively low. The mechanisms introduced are usually also inconsistent with other ToR provisions that often contain provisions indicating that the future Contractor – the present Tenderer – must take into account “all” risks, thus also those related to the variation of project implementation costs.
At the beginning of his “Practical Approach to Construction Contract Adjustment” speech, Eng. Michał Lempkowski, MSc., CCM Team Delay and Quantum Analyses Expert, At the beginning of his speech entitled “Practical Approach to Construction Contract Adjustment” he discussed the basic elements of technical economic analysis with regard to particular premises of court adjustment. Later in his speech, Michał Lempkowski made a note of the most recent rulings of common courts relying on the methodology of calculating the Contractors’ claims for shaping the legal relationship pursuant to the rebus sic stantibus clause, prepared with the participation of the CCM Experts. The said rulings unequivocally confirm that a reliably prepared adjustment claim calculation, taking into account such elements as a backward-looking analysis of prices from the reference period to determine the level of the so-called contractual risk, may result in compensation for the Contractor at a level very close to the amount of the claim being filed.
All participants of the event, as well as companies and individuals interested in the issue of construction contract adjustment, are welcome to contact us and submit questions to our Experts.