No.

Subject

Traditional contract

Alliance contract

Material difference and trade-off between traditional contract and alliance contract

12

Limits of liability

The liability of the Principal and the Contractor to each other is not limited under the standard form of the contract.

However, limits of liability may be negotiated between the parties.

However the standard form of the contract does set up separate caps imposed on specific liabilities under the contract. For example, the Contractor's liability to the Principal for liquidated damages may be capped.

The liability of the Owner and the NOPs to each other is limited under the alliance contract.

However, there are circumstances in which the limits of liability will not apply, including:

non-compliance with the insurance requirements of the alliance contract (this being covered by the indemnities referred to in Item 11);

any Wilful Default by the Owner or the NOPs (respectively) (this being covered by the indemnities referred to in Item 11); and

non-payment of any amounts due under the Agreement.

Please note that, in some instances, the limit of liability of the NOPs under the alliance contract will also not apply in circumstances where a NOP is subject to an insolvency event.

In addition, the limit of liability under the alliance contract does not apply to any caps on the NOPs' liability to pay a Risk Amount to the Owner under the Risk or Reward* regime.

Under the standard form of traditional contract, there is no general limit of liability of each party.

Under an alliance contract, there is a limit of liability on each of the Owner and the NOPs. However, given that the Participants are jointly responsible for the performance of the Works and the Participants agree to the no litigation principle, the circumstances in which the Owner may make a claim against the NOPs under the alliance contract are limited in any event. Further, many of the circumstances in which the Owner may make a claim against the NOPs under the alliance contract are carved out from the limit of liability. Finally, whilst the NOPs' liability to the Owner is limited under an alliance contract, the Owner's liability to the NOPs is similarly limited.