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Due to long lead times for steel supply caused by an increase in global demand, Vivo entered into a $3.35 million lump sum contract with
Due to long lead times for steel supply caused by an increase in global demand, Vivo entered into a $3.35 million lump sum contract with SturdyCon Steel Pty Lid (SturdyCon) for the supply and installation of structural steel components before appointing Kruger as the head contractor for the construction of Vivo Towers. Question Once Kruger is engaged as the head contractor, Vivo wants Kruger to 'step into their shoes' and take over the structural steel contract with SturdyCon. Explain how Vivo may legally obligate Kruger to do this under the contract. During the fourth month of construction, while conducting a routine site inspection, the superintendent notices defects (including cracking and incomplete fusion) in some of the welds in the structural steelwork erected at site by Sturdy Con. This makes the superintendent concerned about the quality and strength of the welding generally in the structural steelwork. As such, pursuant to clause 30.1 of the contract conditions, the superintendent directs that all the welds in the structural steelwork be tested. The testing reveals that approximately 20% of all the welds in the steelwork are defective. The superintendent immediately arranges a meeting with Kruger to discuss the rectification of the defective welds. Kruger, however, refuses to rectify the welds on the basis that it was Vivo who had chosen to use SturdyCon. Question 4 Advise as to the following matters: a) Which party is liable under the contract to pay for the cost of testing all the welds? b) What steps should the superintendent take under the contract to require Kruger to rectify the defective welds? c) If Kruger refuses to rectify the defective welds pursuant to the superintendent's steps you have recommended in Question 5(b), how should the superintendent and Vivo proceed under the contract to have the rectification work carried out and to recover the cost of the rectification work
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