Construction Professionals. Always conclude your terms of Contract

As we always emphasise to our clients it is always important to properly conclude the terms of the contract under which you undertake work. Not only is it common sense but it makes any claims or disputes easier to resolve. You don’t recover what you are entitled to but only what you can prove.

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Architect Employment Terminated before Final Certificate

In an interesting case recently we acted for a contractor against an Employer under a JCT standard contract when the Architect’s employment was terminated by the Employer – who then in breach of contract failed to replace the Architect. Consequently there was no extension of time granted, no issue of the Certificate of Practical Completion, no list of defects, no Certificate of Making Good Defects and no Final Certificate.

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Construction Adjudication

Adjudication has been called the saviour of the construction industry as far as construction disputes or construction claims is concerned. But what exactly is adjudication and why does it have to be used.

Following the introduction of the Housing Grants, Construction and Regeneration Act 1996, otherwise known as the ‘Construction Act’, every construction contract must contain a provision allowing either party to refer any dispute under the contract to adjudication. A construction contract is defined within the Construction Act and we will return to that definition in another article.

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Cheques tendered in full and final settlement

What is the position when you send (or receive) a cheque in full and final settlement of a sum of money you owe or are entitled to. This issue can lead to a dispute ending in a construction adjudication.

The first point to make is that if there is no dispute as to the sum of money involved then there has to be some consideration for a smaller sum offered or the matter will not settled in full and final settlement. That is because both sides have to ‘give’ something and there is no benefit to the receiving partying in accepting a smaller amount where there is no dispute as to the sum involved.

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Should I insist on a Formal Building Contract for a small project?

I often get asked what size does a project need to be before the use of a formal contract. And my advice particularly, for working with private clients, is basically any size needs a formal contract if you want to avoid the headaches. Likewise when friends have having building work done I give them exactly the same advice that they should not employ a builder without any standard form of contract in place.

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Letters of Intent

A Letter of Intent can take many forms but all attempt to express an intention to enter into a contract and a request for work to commence before the contract is concluded. It may be the letter states there is an intention to enter into a contract but without obligation or liability at the time of issue. Therefore anything done on the strength of such wording by a contractor may well be at its risk or the letter may perhaps require some work to be commenced (perhaps to meet a tight programme) e.g. design, placing orders, mobilisation etc. This type of letter can create obligations in that the contractor may recover monies for work carried out even of the contract is not finalised or even if the works do not proceed.

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Construction Contracts and the Final Account

Construction contracts and construction law can be a minefield. However final accounts (including for the purposes of this article final certificates) draw a line of sorts under the contractual obligations owed by the parties to a contract to each other. As always the answer depends on what the sub contract actually says. However, frequently under standard forms, and particularly JCT forms, final accounts also finalise (subject to formal proceedings) disputes under the contract – normally those arising from valuations, quality of work and decisions on extensions of time and loss and/or expense. That is why clauses dealing with final accounts often impose on the parties’ conclusivity unless objection is made within a prescribed period. If you do not dispute the areas you disagree with it may well be too late to argue these points. Disputing elements of the final account means in effect either adjudication or arbitration.

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