Unforeseen Ground Conditions In Qatar And Risk Mitigation

Site condition risk is not static. All too often, during the course of construction, contractors encounter subsurface conditions that differ from those set out in information provided by its employer or anticipated in their bids, or come across unforeseeable or undetected site conditions in the field. Such discoveries can cause schedule delays, cost increases and dangerous working, invalidate design assumptions and ultimately pave the way to litigation. One size does not fit all and the site condition risk is unique for each and every project. In the context of site risks, there is no substitute for signing a clear contract which, where possible, identifies such risks, and particularises precisely what the parties should do if they eventuate.

POSITION UNDER LOCAL LAW

As a basic principle of local law, contracts have the force of law subject to a limited number of caveats. In particular, Article 171(1) of Law No 22 of 2004 (the "Civil Code") states: "A contract is the law of the contracting parties and so cannot be revoked or modified except with the agreement of the parties or for such reasons as prescribed by law." Article 172(1) reiterates this principle by stating that: "A contract must be executed in accordance with the contents thereof and in a way that is consistent with the requirements of good faith". The principle enunciated in Articles 171 and 172 of the Civil Code is known as the "General Principle" and is akin to the common law freedom of contract principle. Accordingly, any provisions allocating site condition risk between the parties would likely be upheld in local law unless such provisions are contrary to public order or morals.

Qatari law itself does not contain specific provisions which explicitly govern the allocation of the risk of discovering and dealing with adverse site conditions. This differs from the position in most common law jurisdictions that, without an express provision to the contrary, ground condition risk lies with the contractor like any other physical condition or buildability issue. This potentially leaves a legal void where a construction contract is silent on the allocation of site risk.

In the absence of contractual risk allocation for site condition and in the absence of specific statutory provisions, parties to a construction contract may, in some circumstances, refer to various wider provisions of the Civil Code which deal with, amongst others, concepts of impossibility and force majeure.

For instance, with respect to the concept of impossibility, Article 148 of the Civil Code states: "If the object of the obligation is impossible in itself, the contract is null and void." Similarly, Article 188 of the Civil Code reads: "In contracts that are binding on both sides, if the execution of the obligation of one of the parties to the contract becomes impossible for some external reason in which he played no part, this obligation terminates, and the obligations that correspond to it terminate with it, and the contract is annulled automatically."

The law of force majeure may equally assist. Parties may refer to Article...