The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Under most construction contracts, the contractor takes on the ground conditions risk.
The most regularly used standard form construction contracts reflect this; for example, the unamended Joint Contracts Tribunal (JCT) Design and Build Contract 2016 does not name adverse ground conditions as something that entitles a contractor to extra money or extra time. Well-drafted Schedules of Amendments specifically name the contractor as the party that takes the risk.
However, a recent case¹ has demonstrated that technical documents appended to a contract, such as a scope of works, can tip the risk back over to the employer.
In the case, E.ON had engaged Clancy Docwra Limited (CDL) to install some pipework. The scope of works, which was contained within the tender documents and appended to the contract², showed a clear pathway on the site through which the pipes could be installed. It later transpired that some underground brick rubble blocked the pathway.
CDL argued that the scope of works did require them to remove the rubble and that it was entitled to extra money to complete this task. E.ON argued that the contract (as amended by a Schedule of Amendments) contained clauses that specifically put the ground conditions risk on to CDL. E.ON also pointed to a priorities clause within the contract which stated that, in the event of inconsistencies between the Schedule of Amendments and other appended documents (including the scope of works), the Schedule of Amendments would prevail.
The Court decided that the ground conditions clauses in the contract only applied to CDL’s agreed scope of works but were not worded to extend the scope of works. As the scope document had expressly displayed a clear pathway for the pipework, the Court held that removing rubble from the pathway fell outside the scope and that CDL were entitled to extra money as a consequence.
The case highlights the importance of ensuring that all contract documents are consistent in terms of how they allocate the ground conditions risk.
Employer’s Requirements should be carefully drafted to ensure as far as possible that the scope of works includes dealing with adverse site conditions and that nothing negates or weakens the contractor’s obligation to do so without extra money or time.
For more information
1. Clancy Docwra Limited v E.ON Energy Solutions Limited
2. JCT Standard Building Sub-contract with sub-contractor’s design, 2011
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
Not only has the possession stay been extended until 20 September, the notice periods to be given to tenants has been extended in certain circumstances with some important exceptions.
The Court has confirmed that a party cannot withhold its consent in order to re-write the original bargain.
Following the Grenfell Tower tragedy, building safety continues to be a key concern for social housing providers and their residents.
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