Valuing variations in the Middle East (2017) 28 5 Cons.Law 27 [Archived]
Valuing variations in the Middle East (2017) 28 5 Cons.Law 27 [Archived]

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Valuing variations in the Middle East (2017) 28 5 Cons.Law 27 [Archived]
  • Key points
  • Lump sum, fixed price—but not as you know it
  • Changing face of the construction market in Qatar
  • Disputes trends in Qatar
  • Common contract terms
  • Further legal considerations
  • Conclusions

ARCHIVED: This Practice Note has been archived and is not maintained.

This article appears as originally published in Construction Law on 1 June 2017 and is not maintained.

Andrew Jones of Dentons warns that contractual rates that overstate the value of contract items can come back to haunt contractors, as some are finding against a background of falling demand in the Middle East.

Key points

  1. The changed economic climate precipitated by the drop in oil and gas prices has resulted in spending cuts manifesting themselves in project descoping

  2. Employers seeking to save money can benefit from contractual rates which overstate the value of items under the contract

  3. Freedom of contract is the cornerstone of Qatari contract law and there is limited scope to step outside contractual obligations

  4. Performance bonds and restricted rights of termination oblige contractors to fulfil contracts which are no longer economically viable

Qatar has significant oil and gas reserves, the exploitation of which has propelled the state to become the richest country in the world and the second largest gas exporter in the world. At the current level of extraction, Qatar's proven gas reserves will last another 135 years.

Qatar has ambitions to capitalise on the income it derives from its natural resources by investing in the state's future. Qatar's National Vision 2030 sets out a strategy to