#WiseUpWednesday: Christmas Construction Concerns…
I’ve been taking a quick look around the news sites to see if there is any cheery Christmas news for Specialist Contractors, and frankly I can’t see much.
Indeed what strikes me is that no-one really has a clue about what the future holds for the economy and the construction industry.
And my concern is that irrespective of whether the economic news is good or bad, Specialist Contractors need to be ever more vigilant if your business is to survive and prosper.
Important Tips This Christmas
So, here are some important tips to ensure you avoid as many of my Christmas Construction Concerns as you can, and make sure your business prospers in the New Year ahead.
1 Who Are You Actually Contracting With?
Even in good times Contractors will still become insolvent.
If the Contractor you’re working for goes bust you will get nothing…
Watch out for contracts that allow the Contractor not to pay you if the Employer becomes insolvent, because you are then taking the risk of not getting paid if they go bust too.
2 Scope of the Works
It’s a chore but you should carefully check that the scope of works in the contract matches what you have priced.
At best Contractors don’t care if you get it wrong – their terms will protect them.
At worst some Contractors will deliberately manipulate the scope of works to increase their profits.
Make sure the contract period is agreed and properly documented before you start the works.
Don’t agree to work “in accordance with the Contractor’s programme” or “in accordance with his directions.”
Failing to protect your interests in respect to time can prove extremely costly.
4 Qualifications and Discounts
If you have made important qualifications in your tender make sure they are not lost when the contract is formed.
Make sure you know the fundamental basis of the contract (e.g. lump sum, re-measurable, cost plus) and therefore who is taking the risk of quantifying the scope of the works.
Don’t allow one off discounts to be applied to variations.
5 Payment Terms
Make sure the payment terms are clear and unambiguous, and that you understand how they will work in practice.
Watch out for abuses of the Construction Act, and make sure you know what has to be done to ensure you get paid on time.
If the payment process is linked to valuation dates make sure these are agreed and recorded and go beyond the end of the anticipated contract period.
6 Design Liability
It is very easy to acquire design liability even when you think you haven’t got any responsibility for design.
If the contract does not expressly limit your design liability to “reasonable skill and care” you will get the more onerous liability of “fitness for purpose.”
Fitness for purpose obligations will void your professional indemnity or product liability insurance cover!
7 Non Payment And Dispute Resolution!
Being able to suspend performance for non-payment is a very effective remedy.
Adjudication (used correctly) is a very effective legal solution.
Neither remedy is automatically available if the Act doesn’t apply, and even if it does, these rights can effectively taken away by onerous drafting.
Advice And Information
If you want to know more, our unique web site has lots of useful information exclusively for Specialist Contractors.
Our expert team of professionals provide all the expertise and support you need to resolve your problems and grow your business. Our goal is your wealth and security, not just at Christmas, but now and always.
We look forward to keeping you up to date and helping you to resolve all your business problems.
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