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Warrington Contractors Pty Ltd (Warrington) submits a tender in the lump sum amount of $65.15 million for the construction of an upmarket 25-storey apartment building
Warrington Contractors Pty Ltd (Warrington) submits a tender in the lump sum amount of $65.15 million for the construction of an upmarket 25-storey apartment building called *Coronation Apartments' in Parramatta, NSW. Coronation Apartments is designed to contain 120 apartments which are each estimated to be worth an average rental value of around $600 per week. Warrington's tender is accepted on 12 February 2019 by the principal, Bush Developments Ltd (Bush). The contract is formed using the AS 4000 - 1997 General Conditions of Contract with amendments. Relevant items in Annexure Part A of the contract are as follows: Item 7 a): 20 March 2020 Item 22: 14 days Item 24: $10,000 per day Item 31: 14 days The following amendments have been made to the contract conditions: Event B B. Under the contract, the principal agreed to supply the heating, ventilation and air conditioning (HVAC) equipment to site by 11 November 2019 for installation by Warrington. On 6 November, the superintendent notifies Warrington by email that due to a manufacturing issue, the HVAC equipment may be delivered later than expected to site. The HVAC equipment ends up being delivered to site on the afternoon of 20 November 2019. The delay in the delivery of the HVAC equipment to site causes a nine-day delay (from 12 to 20 November 2019 inclusive) to the start of the HVAC installation activity which is on the critical path of the construction program. On 5 November 2019, Mech Install Pty Ltd, the subcontractor engaged by Warrington to install the HVAC equipment, goes into voluntary liquidation. Warrington has difficulty finding another HVAC installer who can start work at short notice, but eventually appoints Jennings Services Pty Ltd Jennings) to install the HVAC equipment. Jennings starts work on site on the morning of 20 November 2019. Warrington believes that it is entitled to a nine-day EOT due to the late delivery of the HVAC equipment. Task 4: In relation to event B, if the superintendent rejected the EOT claims, advise on the dispute resolution mechanism which the parties must follow under clause 42. Arbitration is the most widely used method of settling building contract disputes. However, alternatives such as mediation, conciliation and adjudication are rapidly gaining recognition; they are collectively referred to as Alternative Dispute Resolution (ADR). Please discuss a. The sources or scopes of construction disputes b. The advantages and disadvantages of arbitration c. The strengths and weaknesses of Alternative Dispute Resolution (ADR)
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