Construction

Identifying whether a contract is a “construction contract” is extremely important yet can be complicated since the law specifies what types of contracts are, and are not, considered “construction contracts”. Whilst it will be clear in many cases, there are of course grey areas and legal advice should always be sought. They are defined by the Construction Act as a contract “for the carrying out of construction operations” and it is the wording in this definition which can cause confusion. Since certain statutory provisions apply to construction contracts, the parties should be clear as to whether the agreement in question constitutes one – it may be problematic for parties to assume that they have a construction contract and that these statutory provisions apply, when they do not. Please do get in touch if you would like further information on this.

Yes. A contract can be executed either as a ‘simple contract’ or as a deed. There are differences between both, including whether consideration (i.e., money paid in exchange for goods and services) is required, but an advantage to executing a contract as a deed is that the limitation period for starting legal proceedings for a breach of contract will be 12 years instead of six years. It is important to execute a contract properly since a failure to do, particularly a deed, can result in an unenforceable contract.

Yes. If you have a construction contract, there are a number of specific clauses you need to have in your contract, failing which the law will imply terms to fill the relevant gaps. These relate to crucial terms such as payment provisions and therefore it is imperative you get these correct in your contract or the law may imply them for you. Similarly, there are a number of clauses which are not allowed within construction contracts and therefore the law will effectively strike them out if they are included. Please do get in touch if you would like further information on these.

Whilst the standard form contracts do contain a number of important provisions and are generally considered to be drafted in a reasonably balanced way, there are a number of areas which can be updated to provide enhanced protections or improve your position. In addition, the contracts in their existing formats may not deal with certain areas sufficiently and therefore for most projects, some form of amendment to the standard form contracts is desirable. As each project will be different and involve its own complexities, a “one-size-fits-all” standard form contract may not always be the correct approach, but it can on some occasions provide adequate protection.

There are a range of legal payment protections which contractors can seek under a build contract, such as how the payment milestones or intervals are set up, effective use of provisional sums, payment bonds and other protections such as personal or parent company guarantees.

It depends. There are many different standard forms of subcontract which are recognised in the construction industry. Standard forms can be useful as they avoid the need to draft the sub-contract from scratch, therefore saving time and costs. However, they will not be tailored to the specific project and therefore may not be directly relevant to the sub-contractor. We would recommend seeking legal advice as generally with standard form contracts some form of amendment is desirable to provide enhanced protections or improve your position.

A development agreement is a contract between the landowner and the developer that specifies the obligations, responsibilities, and requirements of the parties involved in a development project. It typically includes details about land use, timelines, financial considerations including how the developer will be paid, whether that will be based on profit from sale of units or other use. The agreement would also include (amongst other things) key provisions around duties of the developer, intellectual property and termination rights.

It depends. There are many different standard terms which are recognised in the construction industry. Standard forms can be useful as they avoid the need to draft the document from scratch, therefore saving time and costs. However, they will not be tailored to the specific project and therefore may not be directly relevant to the consultants or designer. We would recommend seeking legal advice as generally with standard form contracts some form of amendment is desirable to provide enhanced protections or improve your position.

We would advise you to speak to a lawyer about the particular situation, as it will depend on the facts and the provisions of the agreement they are party to, however we would recommend that the contract includes provision for how to seek recovery of your added costs in engaging a replacement, and how you will deal with previously paid sums for unfinished work.

Collateral warranties are often required by lenders, tenants, or purchasers as a form of protection. They provide an additional layer of security and recourse if issues arise. If you have a funding agreement in place, we would recommend checking your funding agreement to see whether your funder requires a collateral warranty. In addition, if you are the employer, it is recommended that you obtain collateral warranties from any designers or design subcontractors with whom you don’t have a direct contractual relationship as they are not always mandatory.

It depends. There are many different standard form appointment documents which are recognised in the construction industry. These can be a useful starting point, however, there are many provisions which frequently need updating and amending to ensure a suitable level of protection. In addition, the specific and nuances of each project need to be taken into account and factored into the drafting of each contract. We would recommend seeking legal advice as generally with standard form documents some form of amendment is desirable to provide enhanced protections or improve your position.