urning to the specific clauses in the Terms & Conditions:
As indicated above, this refers to the Contractors Quotation and contains some other relevant definitions.
2. CONTRACT FORMATION
This is intended to make it clear how the contract is formed i.e. by the Client accepting the Contractors Quotation. In practice, if the Client produces his own form of contract and/or suggests changes, legal advice may be needed.
3. GENERAL OBLIGATIONS
This clause contains basic obligations on the part of the Contractor to exercise reasonable skill and care, with an obligation on the Client to provide access to premises. Planning permission and other licences are also dealt with here.
This is designed to ensure that if a Client asks for a change, the Contractor will be paid for it at an appropriate rate. Also, a variation can result in a change to the contract period and this is covered by clause 4.2. It is advisable to ensure that all changes are confirmed in writing. We have produced a Change Confirmation Form that you may find useful document B155.
In clause 4.4 the Contractor should be protected if unforeseen problems arise and in 4.5 the Contractor reserves the right not to undertake changes if these exceed a specified value of the Contract price. This can be deleted if it is not required
5. CONTRACT PRICE & PAYMENT
This refers back to the Quotation to a large extent but, in case the Quotation does not cover everything, there is provision for monthly invoicing. The Client must give notice if he has a reason for not paying an invoice. Also the Contractor has the right to give notice to suspend the work for non-payment. These are statutory rights in the UK. The wording of this clause is designed to comply with legislation that regulates the method of making payment under construction contracts in the UK. See our free document Z146 for more details.
The clause also refers to the Contractors right to claim interest on late payment. The statutory interest entitlement under commercial contracts is 8% p.a. above Bank of England base rate. If the client is an individual and not a business, the Act may not apply but the wording covers this situation.
6. INSURANCE AND LIABILITY
This will need to be tailored to the particular circumstances but, except where works are carried out in an existing building (see clause 6.3), the Contractor has primary responsibility for works insurance and public liability insurance.
7. DURATION, HANDOVER & DEFECTS LIABILITY
This refers to the planned commencement and completion dates in clause 7.1 and allows for the Contractor to get an extension of time if he is delayed by reasons beyond his control under clause 7.2.
Under clause 7.3 the Contractor gets the Client to inspect the works before handover and then the Contractor advises the completion date.
In accordance with the usual practice in the UK, under clause 7.4 the Contractor has responsibility for remedying defects in the work and the period is usually 12 months following completion, but it could be less. Problems that are not due to the Contractor, such as fair wear and tear, are specifically excluded.
Under clause 7.6, it is made clear that the Contractors liability is limited to remedying defects during the defects liability period and the clause aims to exclude any other liability of the Contractor to the Client. Legal advice is recommended here as the wording of limitation clauses may need to be adjusted to take account of particular circumstances and there is also legislation designed to protect consumers against unfair terms.
It is quite common for a contract to contain a clause whereby the contractor becomes liable for liquidated damages i.e. a fixed daily or weekly amount if he is late in completing the works. No such clause is included here.
This gives each party the right to terminate the contract if the other party commits a material breach, and either party can terminate if the other becomes bankrupt.
This clause contains a three stage method of resolving disputes first, direct negotiation, second a reference to adjudication and, thirdly, the courts. Adjudication is a legal right to any party to a construction contract in the UK and there is generally a 28 day period within which the adjudicator must reach a decision much quicker and cheaper than court proceedings. If, however, the adjudicators decision is objected to by one of the parties, the dispute will eventually to the courts for a final decision. There is information on adjudication in the Free Information section of our website.
Sometimes the client will make materials or equipment available to the contractor for incorporation in the works and this clause says which of them is responsible for those materials before they are used.
This contains a number of provisions concerning notices, assignment, etc. For more detail on some of these subjects, see Free Information on our website.