A single copy of this document is licensed to On This is an uncontrolled copy. Ensure use of the most current version of the document by searching the Construction Information Service. Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. Construction Contracts Construction professionals of all kinds frequently need legal advice that is straightforward as well as authoritative and legally rigorous. Building on the success of two previous editions, David Chappell returns to provide answers to 225 FAQs from his experience as Specialist Advisor to the RIBA. With 50 new questions, and thor- ough updates to address changes to the law and contracts, this is an invaluable first port of call for any construction law problem. Questions range in content from extensions of time, liquidated damages and loss and/or expense to issues of practical completion, defects, valuation, certificates and payment, architects’ instructions, adjudication and fees. Among the new questions are: x Is the contractor bound by its price even if there is an error? x How do terms about working in a spirit of trust affect other clauses? x Can architects lose their rights to certify under JCT 2011 contracts? Every question included has been asked of David Chappell during his career, and he uses his vast experience to provide clear, easy to follow advice in this book. Most were originally asked by archi- tects, but the answers will be of wide interest to everyone involved in construction. David Chappell is director of David Chappell Consultancy Limited and one-time Professor and Senior Research Fellow in Architectural Practice and Management Research at the Queen’s University Belfast and Visiting Professor of Practice Management and Law at the University of Central England in Birmingham. He has written many articles and books for the construction industry, including Routledge’s Understanding JCT Standard Building Contracts, now in its 9th edition. He frequently acts as an adjudicator. Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. This page intentionally left bank Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. Construction Contracts Questions and Answers Third edition David Chappell Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. First edition published 2006 by Spon Press This edition published 2015 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2015 David Chappell The right of David Chappell to be identified as author of this work has been asserted by him/her in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Chappell, David (David M.) author. Construction contracts: questions and answers/ David Chappell. — Third edition. p.cm. Includes bibliographical references and index. 1. Construction contracts—Great Britain. I. Title. KD1641.C479’2015 343.4107’869—dc23 2014035237 ISBN: 978-1-138-79551-8 (pbk) ISBN: 978-1-315-75839-8 (ebk) Typeset in Sabon by Swales and Willis Ltd, Exeter, Devon, UK Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. Contents Preface to the Third Edition xxiii Abbreviations used in the text xxv 1 Tendering 1 1 Can the lowest tenderer legally do anything if its tender is not accepted? 1 2 The contractor’s tender states that it is open for acceptance for six weeks from the date of tender, but the contractor withdraws it after three weeks citing a suddenly increased workload. Is the contractor liable to the employer for the additional costs of a replacement contractor? 3 3 Is a contractor bound by its price even if there is an error in tendering? 4 4 Does the architect have any particular duty to draw the attention of the contractor to onerous terms or amendments in the contract at the time of tender? 5 5 Does the architect have a duty of care to the contractor when issuing tendering information? 7 2 Pre-contract issues 9 6 The employer is in a hurry to start work. Is there a problem in the issue of a letter of intent? 9 7 If a letter of intent is issued with a limit of £20,000, is the employer obliged to pay a higher sum after allowing a contractor to exceed the limit? 13 8 Can an architect be negligent for suggesting a letter of intent? 14 Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. vi Contents 9 Can pre-contract minutes form a binding contract? 16 10 Has the contractor any remedy if the employer has said during the tender period that the contractor can freely use certain facilities on site but subsequently refuses to allow it? 17 11 What date should be put on a building contract? 18 12 Can there be two employers on one contract? 19 13 The employer rejected a contractor’s tender and accepted a different tender, but that tenderer went into liquidation before starting on site. The employer then accepted the first tender, but the contractor said it would have to increase the price. Is the contractor allowed to do that? 21 3 Possession of the site 22 14 If the employer cannot give possession on the due date, can the matter be resolved by the architect giving an instruction to postpone the Works? 22 15 In a refurbishment contract for 120 houses under SBC, the bills of quantities say that the contractor can take possession of 8 houses at a time, taking possession of another house every time a completed house is handed over. Is the contractor entitled to possession of all 120 houses at once? 23 4 General contractual matters 27 16 So-called partnering and many other contracts contain terms to the effect that the parties will work together in the spirit of trust, fairness and mutual co-operation. How far does that affect other clauses? 27 17 What does ‘time-barred’ mean? 28 18 If a contractor does not have a proper contract but has carried out work for the same company before on a written contract, will the terms of that written contract apply again? 29 19 The contractor has no written contract with the employer (A). (A) instructed the contractor to do work and Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. Contents vii asked it to invoice their ‘sister company’ (B). The contractor did so and (B) have not paid despite reminders. 30 20 Is the contractor bound to stick to its price if it was described as an ‘estimate’? 32 21 If a clause is deleted from a contract, is it just the same as if it had never been there? 33 22 If the employer wishes to bring directly engaged contractors onto the site to carry out special work, can the contractor refuse admittance? 34 23 If the employer has paid for materials on site which are subsequently stolen, who is liable? 35 24 Is there a contract under SBC if everyone acts as though there is? 35 25 What if an employer tells the architect he or she does not want a building contract? 37 26 If a contract is described as Guaranteed Maximum Price (GMP), is this the most the contractor can receive no matter what changes there are in the project? 38 27 Can a contractor avoid a contract entered into under economic duress? 38 28 In DB, if the employer provides a site investigation report and the ground conditions are found to be different, who pays any extra cost? 40 29 The contractor failed to take out insurance against its liabilities in regard to injury or damage to persons or other property. Does that mean that the employer cannot claim against the contractor if injury or damage occurs? 43 30 What are the dangers for employer and contractor in entering into a supplementary agreement? 44 31 If a contractor must do something ‘forthwith’, how quickly is that? 45 32 What is a reasonable time? 45 5 Warranties, bonds and novation 47 33 Can a warranty be effective before it is signed? 47 34 What are ‘step in rights’? 48 Licensed copy from CIS: heriotwatt, Heriot Watt University, 24/10/2016, Uncontrolled Copy. viii Contents 35 JCT contracts do not seem to mention performance bonds. What are they? 49 36 Is an architect who fails to secure a performance bond negligent? 50 37 If the architect is novated to a contractor who subsequently goes into liquidation, can the architect be re-novated to the client? 52 38 In the case of design and build, can the contractor claim from the architect for design errors in work done before novation? 54 6 Contractor’s programme 56 39 If an architect approves a contractor’s programme, can the contractor subsequently change the programme without the architect’s knowledge, and, if so, can the architect demand an update? 56 40 Under SBC, the architect has approved the contractor’s programme, which shows completion two months before the contract completion date.