
The 'Chocolate Snowman Appeal' is an amazing initiative that Anthony Collins Solicitors' (ACS) employees take part in every year.
In the fifth part of our series on contract management pitfalls, we look at the risks associated with the final account process under construction contracts.
Most construction contracts will include a mechanism for the final valuation of works. Final accounts are, very much as the name suggests, the final valuation of the works delivered by the contractor, and account for extensions of time or delays. Contracts rarely specify the format in which a final account must be presented, but they frequently set out a timeframe in which the final account must be prepared and issued to the contractor.
While for many contracts, calculating the final account is be a straightforward exercise, we frequently see disputes arising out of the final account process, particularly where the contractual timetable for issuing the final account has not been followed, or where the final account is not clear as to how the valuation has been calculated. A lack of clarity around the valuation of contractor’s claims and the reasons why claims have been valued or rejected is a particular trigger point for final account-related disputes.
In our experience, providing a final account that is not sufficiently clear, or providing it out of time, can have the effect of hardening a contractor’s position in respect of claims they may have otherwise resolved pragmatically, and can also result in contractors submitting their own final account (often showing a much higher value than that assessed by the employer!) and referring the disputed sums to adjudication.
How to manage the risk?
Whilst social housing providers cannot always prevent claims from arising, there are some important steps that can be taken to reduce the risk of a final account dispute, and place providers in a good position to defend a claim should that become necessary:
If you have any questions regarding the issues raised in this briefing or would like to find out more about our bespoke client training programme, please contact Kieran Binnie or Andrew Lancaster.
The 'Chocolate Snowman Appeal' is an amazing initiative that Anthony Collins Solicitors' (ACS) employees take part in every year.
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