The courts enjoy a fairly regular diet of cases concerning the validity of calls on performance bonds and similar securities. I have blogged on this before, in early 2017. Bond issuers who are reluctant to pay out on a bond will raise either: A formal defence, for example that the demand is invalid because it … Continue reading Assignment and performance bonds: Sumitomo Mitsui v Euler Hermes
What is the reverse charge? Coming into effect on 1 October 2019, the reverse charge in relation to building and construction services is set to bring about a major change in how VAT is handled in the construction sector. All those involved – including developers – need to be aware of when it will apply … Continue reading VAT reverse charge
The Court of Appeal recently considered the application of, and relationship between, no oral modification (NOM) and entire agreement clauses. While this was not a construction case (the appeal in question concerned a contract for the provision of dental services), both types of clause are commonly included in construction contracts. The judgment also restates a … Continue reading Biting off more than you can chew: no oral modification and entire agreement clauses
A developer client recently called me for advice on a new residential development project. My client was in the process of negotiating building contract terms, including the contract sum, with its preferred contractor. In the meantime, both parties were keen for the contractor to start the works in order to keep to the project programme. … Continue reading Quantum meruit – how much is too much?
Build UK recently published a set of minimum standards to be applied when using retentions, as well as their roadmap to zero retentions by 2023. This follows on from Build UK’s non-binding recommendations on contract terms, about which my colleague, Adriano Amorese, recently blogged. For those of us involved in drafting and negotiating construction contracts, … Continue reading Retention release?
I read Matt Molloy’s blog, What happens when adjudicators make a mistake? with interest, as he mentioned the case of Willow Corp Sarl v MTD Contractors Ltd. Bryan Cave Leighton Paisner acts for Willow in a dispute with MTD in relation to its role as main contractor in the design and construction of the Nobu … Continue reading Willow v MTD: a successful Part 8 challenge after Hutton v Wilson
The idiom “all duck or no dinner“, if you’re not familiar with it, means “all or nothing“. I once worked for a partner that was quite fond of using it, particularly in the context of limitation periods and time bars: if you’re in time, your clients will usually have a smorgasbord of dispute resolution options … Continue reading Sitol v Finegold: NEC3 adjudication time bar applied
Earlier this year I found myself waiting for the Court of Appeal to bring the next instalment in a series of interesting decisions regarding subrogation claims in insurance disputes (not a contradiction in terms, I promise!), which I and my colleague John have been taking it in turns to blog about (see Joint insurance and … Continue reading A missed opportunity – Haberdashers and subrogation
Anyone who has used a GPS knows that sometimes the shortest route can take a mighty long time. On a trip to Pebbly Beach in New South Wales it took me down a little dirt road with so many potholes it resembled swiss cheese. If that wasn’t bad enough, the road led to a dead … Continue reading Beware the short-cut – are preliminary issue hearings a bad idea?
Build UK, a leading representative organisation for the construction industry, has published a non-binding recommendation on which contract terms its members should (as a minimum) refrain from using. The recommendation “seeks to form a new common ground between clients and the supply chain on contractual practice in the construction sector” with the key objectives being … Continue reading Build UK’s recommendation on contract terms: a step in the right direction
As construction disputes lawyers, we see our fair share of settlement agreements. And not just the traditional full and final settlements, but also one page final account settlements, and “line in the sand” agreements in which the parties seek to renegotiate elements of the contract while it is in progress. These “line in the sand” … Continue reading Re-baselining construction projects: drawing a line in the sand
Imagine the scene: you are the responding party to an adjudication and right at the outset you spot that the adjudicator has been incorrectly appointed and does not have jurisdiction. You try to call a halt to the proceedings. The claimant refuses. Surely you can get an injunction? Why go to all the trouble, expense … Continue reading Injunction not granted in ongoing adjudication: Billingford v SMC Building
A tenant client was recently surprised by a clause in its agreement for lease (AFL). The clause allowed the landlord to defer the target access date and long stop date commensurate with any extension of time granted by the Employer’s Agent (EA) under a JCT Design and Build contract for the landlord’s works. It was … Continue reading Employer’s Agents and agreements for lease: the loyalty only goes so far…
Imagine this: a contractor undertakes to perform certain works by a specified date, and agrees to pay liquidated damages (LDs) if it does not complete by that date (subject to any entitlement to an extension of time). The contractor, through its own fault, is late and does not complete by the specified date. In fact, … Continue reading Can liquidated damages be claimed after termination? Wrong question!
I read with interest Paul Bury’s blog, which touched on the case of Zagora Management Ltd v Zurich Insurance plc as it relates to claims against approved inspectors. I’m interested in the case for a different reason: it’s one of the first superior court decisions, post-Grenfell, that deals with the liability consequences of high-rise properties … Continue reading Combustible cladding: early judicial guidance from the TCC
Construction and engineering contracts often contain provisions specifying that, within a particular time, one party (traditionally the contractor) must notify the other (the employer and/or the contract administrator) of a claim or the likelihood that it might advance a claim. Sometimes these “time-bar” notice provisions are elevated beyond being merely an obligation, to the status … Continue reading Time bars under FIDIC 2017 – are more notices the answer?
Summer 2018 will be remembered as a special time by many readers of this blog: whether it was the spectacular weather, the giddy heights hit by the England football team, or Fraser J’s decision in Michael J Lonsdale (Electrical) Ltd v Bresco Electrical Services Ltd (In Liquidation), it was a summer to remember. To recap … Continue reading Adjudication and insolvency – guidance from the Court of Appeal
Many a construction dispute turns on defects. A significant subset of those turn on whether the existence of defects prevents practical completion from taking place. It’s not surprising that these situations are contentious: contractors are keen that practical completion is certified so as to avoid or limit their liability for liquidated damages, trigger the return … Continue reading Practically complete or completely impractical? Navigating the pitfalls of what constitutes practical completion
Whether liquidated damages (LDs) can be claimed after termination is a question which comes up regularly. It is very relevant in the current climate where contracts are often terminated following contractor insolvency. If I were devising a construction law exam paper, this classic question would undoubtedly appear. An unlucky student sitting my imaginary exam paper … Continue reading Do liquidated damages survive termination? (answer in no more than 1000 words)
As we all get into the festive spirit you may well find yourself chatting to family or friends about their latest project. Some may ask for your opinion or advice. But don’t get carried away; remember the cautionary tale of Burgess v Lejonvarn before offering any free advice.
A recent decision from the Chancery court offers some helpful guidance on the interaction between entire agreement clauses and claims for misrepresentation. Many practitioners may be under the impression that an entire agreement clause has the effect of defeating a claim in misrepresentation. However, this case shows that is not necessarily the case. If parties … Continue reading Nottingham Forest 1 – 0 Entire Agreement
With the much-anticipated draft withdrawal agreement being revealed last week, I thought it was an opportune time to reflect on the impact of Brexit on the construction industry, and in particular, what effect it is having on parties entering into construction contracts in the current market.
In North Midland Building Ltd v Cyden Homes, the Court of Appeal held that parties to a construction contract are free to apportion risk in the event of concurrent delay. For more detail on that case, see my colleague, Alexandra Clough’s blog post, Concurrent affairs: North Midland Building Ltd v Cyden Homes. Cyden (as employer) … Continue reading North Midland Building v Cyden: apportioning risk for concurrent delay in the UAE
In the beginning… Happy birthday, Practical Law Construction! A lot has changed in the ten years since the “blog page” came into being. In October 2008 we were living in St Albans, our son was still at school and Labour were in power. Lehman Brothers had recently collapsed and the global financial crisis was in … Continue reading Practical Law Construction: 10 years a blogging
Employers under construction contracts often find themselves under time pressure to get started with construction of their projects prior to concluding negotiations with their preferred contractor and before the building contract is entered into. In such a scenario, employers commonly choose to rely on a letter of intent. This should give the contractor comfort to … Continue reading Saved by silence: Letters of intent and Arcadis v Amec
Some of the world’s most iconic buildings were conceived as a result of architectural competitions. You may be surprised how often such competitions result in controversy. Jorn Utzon submitted his winning concept for the new opera house in Sydney in the mid-1950s. He walked away from the project 11 years later (7 years before its … Continue reading When design competitions go bad
Last year, a developer client raised concerns about the solvency of its main contractor, Carillion. With over 50% of the works still to be completed, the client wanted some advice as to how it could manage the risks (legally and practically) if the contractor did go “pop”. In January this year, the concerns became a reality. … Continue reading Apocalypse Now? Contractor insolvency: an employer’s survival guide
A contract can be a long term commitment. Over the course of a contract, things happen. Circumstances change. Force majeure clauses generally allow parties to allocate contractual risk, by limiting liability, excusing performance or providing for termination, if unusual or unfortunate circumstances arise. However, the recent case of Seadrill v Tullow reminds us that it is … Continue reading Risky business: Offshore drilling and using force majeure as an exit route
A client recently called me in a panic. Their contractor had discovered a protected species of bird had set up home in the exact spot where they needed to carry out the next phase of works at one of their sites. No one on site was entirely confident on what the appropriate next steps should … Continue reading Beware – wildlife on site!
The TCC does not like blocking ongoing adjudications or interfering in their conduct. To date, it has only done so in a few unusual cases. Recently, however, it has found a good reason to prevent an adjudication from proceeding, which could be of very wide application.
Concurrent delay is something that the courts tell us is exceedingly rare. And yet, it is a subject which can occupy much time when parties are in dispute about entitlement to an extension of time. The Court of Appeal has now considered whether parties to a construction contract can decide how to apportion risk in … Continue reading Concurrent affairs: North Midland Building Ltd v Cyden Homes
Recent cases, including the Court of Appeal’s judgment in Bou-Simon v BGC Brokers LP and the (as yet unreported) case of Harrow LBC v Engie Regeneration (Apollo) Ltd (2018) (TCC), provide a useful reminder of the strict constraints on implying terms into a commercial contract. Courts can imply terms into a contract in order to … Continue reading What are you implying? The role of implied terms in contract interpretation
The trouble with collateral warranties (CWs) is that they aren’t very interesting. Construction lawyers typically overdose on them as trainees and have had enough of them by the time they qualify. A brief foray into the world of third party rights and they are ready to move on to higher things, leaving the following cohort … Continue reading Making collateral warranties interesting: the Office Depot case
1 October 2019 will see a significant shake-up of the VAT rules in the construction sector. New rules will come into force on that date which will, in many cases, require the recipient of the supply of construction services, rather than the supplier, to account for VAT on the supply. Large and small businesses making … Continue reading The reverse charge: shaking up VAT on construction services
Valuing a contractor’s work on a complex project is rarely an easy task. During the works, parties to a construction contract commonly devote significant resources to ensuring that the work is properly valued. These valuations are often carried out by people with close knowledge of the project, and under the NEC form of contract certified … Continue reading The costly business of ignoring interim assessments and agreed valuations: ICI v Merit Merrell Technology
Increasingly, the construction industry model that we know so well – based on layers of contractors and sub-contractors – is being called into question. In the last six months various failures (including Grenfell, Scottish PFI-built schools and Carillion’s collapse) have prompted questions about construction industry outsourcing and transfer of risk. Queries have been raised about … Continue reading Payment, retention and risk: shuffling the deck
The NEC contract is built on the spirit of mutual trust and co-operation. One area in which this plays out is in the context of applications for an extension of time or a change in the prices by a contractor. The project manager is required to assess these applications on a prospective or forecasted basis, … Continue reading Prospective analysis of compensation events under NEC: shutting one’s eyes and groping in the dark?
Increasingly, our clients are requesting that we incorporate provisions for modular building techniques into their construction contracts. There seems to be a real trend for including at least some aspects of “modular” into development and other projects. It is open to debate whether this is driven by improvements in design and adaptability of modular building … Continue reading The avalanche effect: key issues in modular building
Last year, I blogged on the first instance decision of the Scottish courts in SSE Generation Ltd v Hochtief Solutions AG and another. That decision has been overturned by the Inner House, Court of Session (the Scottish equivalent of the Court of Appeal) in an important judgment that sheds light on how the English courts might … Continue reading The fine line between design and implementation: scope of NEC Option X15
My colleague, Natalie Wardle, commented on the Supreme Court’s decision in Gard Marine and Energy Ltd v China National Chartering Company Ltd in her May 2017 blog. As she noted, the judgments (and the 3:2 majority verdict) left a number of questions unanswered. Two of these were: What is the strength of the implied term that … Continue reading Co-insurance and subrogation rights revisited (again!)
Recently, in the course of reviewing a proposed building contract for an employer, I had cause to consider how responsibility for obtaining planning consents had been addressed. Or rather, whether it had been addressed at all. Jean-François Clin v Walter Lilly & Co Ltd is a forceful reminder to effectively deal with this issue. The Court … Continue reading An unplanned surprise: Implied planning obligations – Clin v Walter Lilly
Coulson J’s decision in Grove Developments Ltd v S&T (UK) Ltd has triggered a great deal of commentary, including Jonathan Cope’s post, which I read with great interest. It got me thinking about what strategies an employer or contractor might adopt to counter a smash and grab adjudication, either pre-emptively or after the referral has landed.