Business Law, Ethics and Regulatory Compliance
This domain tests whether you can apply contract and regulatory rules to construction transactions, respect notice and time-bar requirements, and recognise ethical duties that go beyond mere legality.
Core rules and concepts
- A binding contract needs offer, acceptance, consideration, intention to create legal relations, capacity and legality. Terms must be distinguished from pre-contractual representations.
- Standard forms allocate risk: FIDIC and the Sri Lankan ICTAD/SBD suites define the engineer's or employer's representative's role, variation procedures, extension of time, liquidated damages and payment timing.
- An instruction is not automatically a variation. Entitlement depends on the variation clause, the written-confirmation period and timely notice. Time bars can extinguish an otherwise valid claim.
- Negligence requires duty of care, breach, causation and loss. Professional advisers owe a duty to those they should foresee relying on their work.
- Disputes normally escalate through the contractual decision, then amicable settlement, then arbitration under the Arbitration Act No. 11 of 1995. Statutory and regulatory duties include CIDA registration, environmental clearance under the National Environmental Act, and health and safety obligations.
- Ethics pillars: integrity, objectivity, confidentiality, competence and professional behaviour. Conflicts of interest must be disclosed and managed; bribery and facilitation payments are prohibited, not merely discouraged.
Worked example
A site engineer verbally instructs a quantity surveyor's client to upgrade a concrete mix; the work is done and payment is later refused. Analysis: first establish whether the instruction was within the instructor's authority. Second, check the variation clause, confirmation period and notice requirements. Third, rely on contemporaneous records, not memory, for measurement and cost. Ethically, the quantity surveyor must not backdate a record or certify unmeasured work to help a friendly contractor, even if the outcome feels fair.
Traps that cost marks
Treating every instruction as a variation; missing the written-confirmation deadline; equating ethical conduct with technical legality; certifying without verification; and failing to disclose a conflict because "nothing was asked".