Built Environment Law and Ethics - Mehayla Construction Pty Ltd - Law Assessment Answer

Law Assessment Task

PART A

Opal Projects Pty Ltd (Opal) is a substantial construction company. In 2017, Opal was engaged to design and construct a swim centre (the Centre) at Blacktown, a suburb of Sydney. The Centre was to be a Local Council area venue for use by residents in the Blacktown Local Council area. The Centre was to consist of a 25 metre heated indoor pool, a play pool for children as well as one Olympic-sized swimming pool. In order to comply with Local Council regulations on noise, the Centre needed to contain acoustic works that would reduce the noise emanating from the Centre. Mehayla Construction Pty Ltd (MC) was also a substantial construction company. It was experienced in the design, fabrication and construction of large structures, including swimming venues. It gave assistance to Opal in the preparation of Opal’s tender for the work of designing and constructing the Centre. When Opal invited tenders for various sub-contract works on the development of the Centre, MC tendered for the roof fabrication and construction component of the Centre. Initially Opal sought tenders for a different roof structure without the acoustic elements. MC provided a quotation. The roof component works were revised and fresh tenders were invited. MC submitted a revised tender on 9 March 2017. The revised tender was discussed at a posttender meeting between representatives of Opal and MC on 12 March 2017. Opal requested and received further information from MC by email and telephone calls on 18 March 2017. Following an intimation from a representative of Opal that a reduced price would be likely to secure MC the job, on 19 March 2017 MC reduced its tender price to $4,000,000. The tender was further discussed at a meeting that day. At the end of the discussions on that day, MC was told by the Opal representatives that it was the successful tenderer and was handed a letter of intent by Opal. The letter of intent contained the following wording – ‘SWIMMING CENTRE PROJECT – BLACKTOWN –LETTER OF INTENT FOR THE MAIN ROOF STRUCTURE AND ROOF CLADDING FOR THE CENTRE

1. Opal Projects Pty Ltd hereby accept your offer of $4,000,000 (Four million dollars) to supply, deliver and install all roof structure and roof cladding components to 4 Built Environment Law and Ethics – Autumn 2019 complete the main roof at the Blacktown Swim Centre, all as per the contract drawings, specification and construction schedule as amended from time to time by Opal.

2. Opal’s acceptance is conditional upon the parties entering into a formal subcontract based upon the Project Related Conditions of Contract.

3. Contract Agreement A copy of the standard subcontract agreement has been forwarded to you. We will now proceed to prepare the subcontract agreement and will forward this document to you for signing.

4. Letter of acceptance. This letter of acceptance dated 19 March 2017 will be included in and form part of the contract agreement.

5. Where work commences prior to the execution of the subcontract agreement, no monies will become due and payable until the subcontract agreement has been executed.

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