Ganesh KumarProgram ManagerBangalore., Karnataka, India
For all the projects that have been shelved/could be shelved, using force majeure clause, what do you think would happen to these projects.
1. you could see the project reviving after a while/ after lock down - BAU 2. project could be shelved completely..
Completed projects would mean something, later it would be meaningless/inconsequential, because such delays could impact several other connecting projects.
Are you facing any such projects, what do you see the outcome as ? Saving Changes...
When claiming COVID-19 as an FM, the claimant needs to be ready for potential litigation or disputes arising from the claim. If both parties are in agreement about the impact of the pandemic on the ability to execute the project, then once things return to normal, if the projects are still relevant then they are likely to be restarted.
However, if either the projects have lost their relevance or the relationship between the parties is not amicable, there may be no resumption of work once things settle down.
Kiron
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1 reply by Rami Kaibni
Apr 12, 2020 11:00 AM
Rami Kaibni
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Kiron
This is true and part of this should be covered by the insurance you carry for your project.
For example, during construction, we carry a Course of Construction and Wrap-Up insurance that covers the client, us and everyone else including the building and soft costs in case of redesign in case a FM occurred.
Thanks for this.
Act Of God=Force Majeure
(If both parties are in agreement) will save the time and cost.
I think the decision will come from higher entity of stakeholders including sponsor after a PM raise to them, Am I right?
BR, Saving Changes...
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Apr 12, 2020 9:24 AM
Replying to Kiron Bondale
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Ganesh -
When claiming COVID-19 as an FM, the claimant needs to be ready for potential litigation or disputes arising from the claim. If both parties are in agreement about the impact of the pandemic on the ability to execute the project, then once things return to normal, if the projects are still relevant then they are likely to be restarted.
However, if either the projects have lost their relevance or the relationship between the parties is not amicable, there may be no resumption of work once things settle down.
Kiron
Kiron
This is true and part of this should be covered by the insurance you carry for your project.
For example, during construction, we carry a Course of Construction and Wrap-Up insurance that covers the client, us and everyone else including the building and soft costs in case of redesign in case a FM occurred.
So far our projects haven’t been affect till now,
RK
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1 reply by Ganesh Kumar
Apr 14, 2020 2:57 AM
Ganesh Kumar
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Thank Kiron,
Hi Rami – I doubt, insurance is covered in such clauses. If you have any such reference, can please share for academic interest.
Saving Changes...
Cinzia PellegrinoTransformation & EPMO Director | PMIHamburg, Germany
While a force majeure clause is a common boilerplate clause to find in many contracts, it is certainly not something that is found in all. If no force majeure clause exists, then the doctrine of frustration may apply where unforeseen events happen and it is important for all businesses to understand how the concept works and when it is appropriate to use it. Contracting parties may seek to rely on frustration to remove themselves from existing onerous contractual arrangements and to reduce their financial exposure. All businesses should be considering the effect the current COVID-19 outbreak may have on their contracts or indeed whether it will provide them with an opportunity to exit a contract without penalty on the grounds of frustration
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1 reply by Ganesh Kumar
Apr 14, 2020 2:57 AM
Ganesh Kumar
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Hi Cinzia, agree. If companies have not incorporated such clauses, am sure going forward they will start incorporating such clauses to avoid frustrations. Are you aware of any such projects and the possible outcome?
Saving Changes...
Ganesh KumarProgram ManagerBangalore., Karnataka, India
Apr 12, 2020 11:00 AM
Replying to Rami Kaibni
...
Kiron
This is true and part of this should be covered by the insurance you carry for your project.
For example, during construction, we carry a Course of Construction and Wrap-Up insurance that covers the client, us and everyone else including the building and soft costs in case of redesign in case a FM occurred.
So far our projects haven’t been affect till now,
RK
Thank Kiron,
Hi Rami – I doubt, insurance is covered in such clauses. If you have any such reference, can please share for academic interest.
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1 reply by Rami Kaibni
Apr 14, 2020 5:06 PM
Rami Kaibni
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Ganesh
Please don't doubt that because I work in Real Estate Development and when we have a development project, we do a COC (Course of Construction) and Wrap-Up Insurance for our projects and one of the things it covers is Force Majeure like floods, fires, crisis which also covers "Delay in Opening".
This is how it works in Canada.
Hope this helps.
RK
Saving Changes...
Ganesh KumarProgram ManagerBangalore., Karnataka, India
Apr 13, 2020 3:16 AM
Replying to Cinzia Pellegrino
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While a force majeure clause is a common boilerplate clause to find in many contracts, it is certainly not something that is found in all. If no force majeure clause exists, then the doctrine of frustration may apply where unforeseen events happen and it is important for all businesses to understand how the concept works and when it is appropriate to use it. Contracting parties may seek to rely on frustration to remove themselves from existing onerous contractual arrangements and to reduce their financial exposure. All businesses should be considering the effect the current COVID-19 outbreak may have on their contracts or indeed whether it will provide them with an opportunity to exit a contract without penalty on the grounds of frustration
Hi Cinzia, agree. If companies have not incorporated such clauses, am sure going forward they will start incorporating such clauses to avoid frustrations. Are you aware of any such projects and the possible outcome? Saving Changes...
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Apr 14, 2020 2:57 AM
Replying to Ganesh Kumar
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Thank Kiron,
Hi Rami – I doubt, insurance is covered in such clauses. If you have any such reference, can please share for academic interest.
Ganesh
Please don't doubt that because I work in Real Estate Development and when we have a development project, we do a COC (Course of Construction) and Wrap-Up Insurance for our projects and one of the things it covers is Force Majeure like floods, fires, crisis which also covers "Delay in Opening".
This is how it works in Canada.
Hope this helps.
RK
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1 reply by Ganesh Kumar
Apr 15, 2020 12:48 AM
Ganesh Kumar
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Thanks Rami, will surely connect again on this matter offline, and quite possible discuss at the org level too.
Saving Changes...
Ganesh KumarProgram ManagerBangalore., Karnataka, India
Apr 14, 2020 5:06 PM
Replying to Rami Kaibni
...
Ganesh
Please don't doubt that because I work in Real Estate Development and when we have a development project, we do a COC (Course of Construction) and Wrap-Up Insurance for our projects and one of the things it covers is Force Majeure like floods, fires, crisis which also covers "Delay in Opening".
This is how it works in Canada.
Hope this helps.
RK
Thanks Rami, will surely connect again on this matter offline, and quite possible discuss at the org level too. Saving Changes...
Anton OosthuizenSenior Business Analyst / Project Manager| Self EmployedPretoria, Gauteng, South Africa
Invoking a force majeure clause should really be a very last resort but unfortunately, it is seen by many as an escape. The impact of cancelling a project due to this clause is more far-reaching than any other reason for shelving a project. Amongst other things, it means that you are off the hook for any vendor commitments i.e. external workstreams that has not direct link to the project are impacted. So while there are certainly times when a project must be shelved we should fo whatever possible to defer, pause or delay a project. Saving Changes...
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