P

The 'Peak' or 'Prevention' Principle derives from the decision in Peak Construction (Liverpool) Ltd v McKinney Foundations Limited (1971) BLR 111. Where a party to a contract has been prevented from fulfilling its contractual obligations as a result of the conduct of the other party then the preventing party cannot insist upon strict contractual times for performance. Where the principle applies, time in the contract is set at large and is replaced by whatever is reasonable in the circumstances. The principle has important limitations. See further Gaymark Investments Pty Ltd v Walter Construction Group Limited (1999) 16 BCL 449; Turner Corporation Limited v Co-Ordinated Industries Pty Ltd (1994) BCL 202 at 212; Peninsula Balmain Pty Ltd v Abigroup Contractors (NSW CA) (2002) 18 BCL 322; and Spiers Earthworks Pty Ltd v Landtec Projects Corp Pty Ltd (No 2) [2012] WASCA 53.

Involves or inflicts punishment. A liquidated damages clause in a contract will be penal if it punishes the contractor for its breach, rather than providing the principal with compensation in the form of a genuine pre-estimate of damages.

A corporation that has a controlling interest in another business or company.

A secondary agreement between a Parent Company and a party to a principal agreement whereby the performance of obligations and/or liabilities of another party (eg the Contractor) arising under the principal agreement are the subject of a Guarantee. (See Performance Guarantee)

A rule of evidence that excludes the use of non-contractual materials (for example, conversations, prior correspondence) in determining the meaning and legal effect of words in a written contract. The rule is relevant to matters being heard in a court of law. There are exceptions to the rule.

A circumstance whereby a party (eg the Principal) retains or assumes rights to possess or occupy a portion of land or premises the subject of an agreement.

See Alliancing.

Two or more persons carrying on a business in common with a view to sharing profits. Generally, partners are jointly and severally liable for debts and obligations incurred in the course of the partnership business. A partnership has no legal personality separate from its members.

Costs incurred by a party to litigation in enforcing or defending their rights.

A defect that exists in project Works that are able to be ascertained or identified by making reasonable enquiries or investigations at the time of Practical Completion. (See Defect and Latent Defect)