The Singapore Court of Appeal has recently held that there was no implied term of due diligence and expedition in a construction contract. This case aligns the Singaporean approach with that of the English courts.

A term of due diligence and expedition imposes an obligation on contractors or sub-contractors to maintain certain levels of progress and performance throughout the life of a project. This obligation is separate and in addition to the obligation to complete the works by a certain date. The issue of whether and when such a term can be implied into a construction contract has not previously been addressed by the courts of Singapore.

CAA Technologies Pte Ltd and Newcon Builders Pte Ltd [2017] SGCA 53 The key facts of the case are as follows:

Newcon Builders Pte Ltd ("Newcon"), the main contractor on a medical technology hub project, entered into a sub-contract with CAA Technologies Pte Ltd ("CAA") to design, produce and install hollow core slabs (the "Sub-Contract"). The Sub-Contract was recorded in a brief Letter of Intent ("LOI") which envisaged the parties subsequently signing a more detailed Letter of Acceptance ("LOA"), but CAA never executed the LOA. CAA repeatedly failed to deliver the hollow core slabs in accordance with the dates prescribed in the construction programme schedule, so Newcon terminated the Sub-Contract. CAA sued Newcon for wrongful termination. Newcon brought a counterclaim against CAA for breach of contract, claiming reliance costs and the liquidated damages that Newcon had to pay to the Employer due to the delay in the overall project.

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Posted in Featured, Construction, Smart Nation on Oct 10, 2017