In 2008 the Ceylon Electricity Board (CEB) awarded a consulting contract for its proposed head office, following government procedure. In 2010, after the Minister in charge was changed, the new management of the CEB decided to terminate the properly awarded contract, and implement a new plan for the head office to make it a ‘green building’. Accordingly, it entered into a new consulting contract, but without following government procedure, and without receiving proper legal advice. The original consultant sued successfully for breach of contract. The government sued the (former) manager, who had terminated the original consulting contract, to recover the damages. To make matters worse, the CEB continued to sink millions into the project, which is beset with problems, and has not been completed.
Independent legal advice is important when entering into a consulting agreement, and equally important when determining whether the agreement can be terminated.
Takeaway:
- Independent legal advice can save $millions.