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International Construction Law Review

ALLIANCE CONTRACTS AND FIDUCIARY DUTIES: TRUST AND CONFIDENCE IN RELATIONSHIP CONTRACTING

TREVOR THOMAS1

B Eng, M Eng, LL B, LL M Clayton Utz, Melbourne
“The higher the building, the lower the morals.”2

1. Introduction

Major construction projects are bedevilled with complexity. Innovations in building materials, design methodologies, construction techniques and procurement schemes have contributed to the extraordinary level of sophistication facing the contemporary construction industry in Australia and around the world.
An inevitable consequence of such complexity is a proliferation of disputes in major projects. As a means of redressing such friction, alternative procurement methods have become increasingly prevalent. This has seen the rise of “relationship contracting”—a broad term encompassing a range of non-traditional procurement schemes. This article is concerned with one such method of relationship contracting, being “project alliances”.
While alliancing has often been described as a form of relationship contracting, that title may, inadvertently, be more pertinent than the parties had originally intended. Its supporters declare that one of the key benefits of alliancing is that it encourages the parties to act jointly on a “best for project” basis. That is, the parties make a commitment to act in the best interests of the venture and are duly rewarded where the undertaking is successful. Can it then be claimed that the logical extension of such a commitment means that the parties mutually undertake to act in each other’s best interests? If so, does this change the nature of the relationship from a purely commercial association to a fiduciary one? Does equity then have a role in shaping the parties’ rights and obligations to each other and the project and, if so, what boundaries are likely to be imposed under the auspices of fiduciary duties?
This article explores these questions in detail. Initially, it reviews the meaning of fiduciary relations and, in particular, considers the essential traits of fiduciaries. Next, it considers whether it is possible to characterise


Pt 3] Alliance Contracts and Fiduciary Duties

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