Supreme Court Overrules Parkwood: Collateral Warranties Are Not Construction Contracts

/ Contractual Issues, Legislation

Blog Authors: AIDAN STEENSMA; MATTHEW TAYLOR; CHRIS HALLAM; STEVEN WILLIAMS – CMS CAMERON MCKENNA NABARRO OLSWANG LLP In a decision issued in July, the Supreme Court has found that collateral warranties and other contracts which are merely derivative or reflective of primary building contracts do not fall within the Construction Act. In addition to overturning the Court of Appeal’s decision on this point, the judgment also overrules an earlier decision by the TCC in 2013 which had found collateral warranties to be capable of falling within…

The Terminator Conundrum: Navigating the Abyss – Variations On A Theme

/ Contractual Issues, JCT Povey Lecture

Blog Author: Simon Tolson – senior partner, Fenwick Elliott LLP Termination of a contract is a serious measure that should only be engaged in cases of fundamental breaches, after exhausting all possible preventive measures. When courts interpret termination clauses, they acknowledge the severe consequences, deeming it a draconian remedy that ends the contract with significant repercussions. Over time, legal principles have evolved to prevent accidental terminations. The process requires careful consideration and legal advice, it is often referred to by lawyers as the ‘nuclear option.’…

Retrofitting and Contractual Arrangements

/ Contractual Issues, JCT 2016 Edition

Blog Author: Peter Hibberd This article is primarily concerned with the manner that retrofitting of buildings might impact on the procurement for its delivery, and whether adequate standard form contracts exist. Simply put, retrofitting of buildings is the introduction of new or modified parts or equipment not available at time of build. Contrast this with repair, which is only to restore something broken or damaged to a good condition or working order. Also, contrast it with renovation and renewal, which restores to a new or…

JCT Explains…Interim Payments

/ Contractual Issues, JCT 2016 Edition

In this new feature for JCT News, we break down some of the key sections and clauses within the JCT contract to explain and provide more information about how these elements function in practice. The issue looks in more detail at the process of interim payments. Interim payments Generally, the provisions relating to valuation, certificates, notices and payment (interim and final) are the same or similar for many of the JCT main and sub-contracts. In this article, we refer to the JCT Standard Building Contract,…

Contracting for Modern Methods of Construction (MMC)

/ Contractual Issues

Blog Author: Peter Hibberd Views on MMC range from its adoption being the only proper solution for meeting building needs, to its being old hat, and only able to produce aesthetic mediocrity. Neither view is true; nor is it true that standard construction contracts per se are a barrier to adopting MMC. Our understanding of MMC is often confused, despite the MHCLG Joint Industry Working Group’s 2019 publication ‘Modern Methods of Construction’, which introduces its MMC definition framework. A definition that comprises seven categories and…

The Risk of Volatile Prices on a Building Project

/ Contractual Issues, Fluctuations, JCT Network

Blog author: Peter Hibberd In September 2021, the Bank of England stated that inflation may reach 4% by the end of that year. The talk, by some, that this was alarmist and that we should not overreact to rising prices is now seen to be way off beam. General inflation has increased significantly since then and in September 2022 it had risen to circa 10% according to ONS. How wrong can one be! The construction materials indices are even more variable and reflect price increases…

Managing Construction Price Inflation

/ Contractual Issues, Fluctuations

Blog Authors: Sarah Elliott and Suzanne Reeves  – Wedlake Bell The construction industry has had to mitigate the effects of Brexit and COVID-19 and is now beset with additional inflationary pressures in the wake of the war in Ukraine. Unfortunately, inflation is unlikely to be brought under control in the short term and will be with the industry for some time to come. This means that businesses across the supply chain need to find ways to manage the risks of cost escalation over the life…

UK Construction & Engineering Projects – What Can I Do To Avoid Disputes?

/ Contractual Issues, JCT Young Professionals Group

Blog Author: Tom Hawkins – Director, FTI Consulting   Tom Hawkins is a Chartered Construction Manager and Quantity Surveyor who has over 14 years’ experience in the construction and engineering industry. He initially obtained his experience working for a national UK main contractor prior to moving into consultancy roles where he currently provides Quantum Expert Witness & Dispute Resolution services worldwide for FTI Consulting. He has experience regularly providing commercial management strategies & advice which includes services as part of dispute avoidance and resolution proceedings….

Three Options for Managing Inflation Risk Using JCT Construction Contracts

/ Contractual Issues, JCT 2016 Edition

Blog Author: Nigel Blundell and Hamza Sekkar –  Pinsent Masons The current volatile and unpredictable market conditions pose a risk to the success of major projects. However, there are ways that contractors and clients can manage risks associated with inflation in their contracts. We look at three options available under the JCT suite of standard form contracts that contractors and clients alike should consider at a project’s outset. Current practices Deleting the fluctuation provisions in standard form contracts had been an accepted practice for many years….

Rolling Out PBAs in JCT Contracts

/ Contractual Issues, JCT Product Updates

Blog Author: John Riches – Vice-Chair, JCT Drafting Sub-Committee   Project bank account provisions are now available for all JCT contract suites – improving cash flow through the industry… Lord Denning said in Modern Engineering (Bristol) Ltd vs Gilbert Ash (Northern) Ltd 1973 that “cash flow is the lifeblood” of the construction industry – a sentiment that is particularly apposite where parties feel they are not being paid enough or on time. There have been a plethora of reports on the ills of the industry featuring…