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Construction Contracts: Build UK sets out recommendation on terms

Build UK, a leading representative organisation for the construction industry, has published a non-binding recommendation on contract terms, which seeks to form a new common ground between clients and the supply chain in the construction sector. It aims to promote collaboration, encourage a fairer allocation of risk through the supply chain and delivery of positive project outcomes.

1. a fitness for purpose standard of care for design (except in the process sector);

2. an extension of time/loss and expense risk where not reasonably ascertainable for dealing with:

  •  asbestos;
  • fossils, antiquities and other objects of interest or value;
  • unexploded ordnances;
  • the carrying out by a statutory undertaker of work in pursuance of its                           statutory obligations or failure to carry out such work;

3. specified perils (as defined in the JCT) that will not give rise to extension of time where caused by the (sub)-contractor;

4. a blanket indemnity for breach of contract;

5. uncapped (sub)-contractor liability (save for certain aggregate cap carve-outs such as fraud, misrepresentation, personal injury/death, wilful default); and,

6. where the following forms of performance security are required, they do not use:

  •  a pure on demand performance bond
  •  a parent company guarantee (PCG) which does include include a “no                  greater liability clause” (save for legal costs) and equivalent rights of  defence;
  • a collateral warranty which does not include a “no greater liability clause”.

This is clearly a step in the right direction so far as allocation of contractual risk is concerned, as well as easing the position of the supply chain and minimising risk allocation.

For further help or advice, please get in touch with Martin Collingwood, head of construction on 01482 325242 or by email martin.collingwood@andrewjackson.co.uk

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