Streetwise Answers

Hi Streetwise
We bought some profiled metal roofing sheets from Phoenix Fabrications for a job carried out some time ago. Interserve have paid us, we have paid Phoenix however phoenix went into administration last week not having paid their coil supplier, Coilcolor.
We are trying to get the product guarantee from Coilcolor however they are saying that they do not issue guarantees until they have received payment, which now looks unlikely. Where does this leave us, Interserve and the Client? Is there any consumer legislation that we can rely on or are Coilcolor within their rights to refuse?
Eddie Ford Rooksby Roofing

Eddie

As you have no direct contract with Coilcolor, you have no direct right or cause of action for the guarantee. If your contract with Phoenix required the guarantee your action is against them but under the circumstances this is unlikely to get you anywhere, unless Pheonix is to be traded in some way.

I am afraid there is no legislation to assist and Coilcolor are almost certainly within their rights to withhold performance of any obligation to pass the guarantee when they have not been paid. If they are not, it would be Phoenix, (through its Administrator) who would have the right to challenge that.

Have Interserve made it a condition of your contract that the guarantee be provided? If it isn't reserved expressly, they may have no right to demand it. If they have then failing to provide it will be a breach of contract on your part. The remedy Interserve could seek would be to be put back into the position they would have been in, but for the breach. This would be the lowest cost of obtaining the guarantee, or an equivalent.

You may wish to check your own product liability insurance/contractors all risk policy, and your broker should be able to advise if you have any cover which would apply in these circumstances. If you have you may consider offering a limited guarantee directly, supported by the product liability insurance. This probably isn't possible, but it may be worth asking the question.

It may also be possible to take out some form of latent defects insurance to cover like for like matters as would be covered under a guarantee. Whilst this would not be cheap, it may be less than paying the full cost of the supply to obtain the guarantee. Again, latent defects insurance may not cover the issue, but it may be worth investigating if Interserve become aggressive over the issue.

Best regards

Streetwise

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