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This flowchart sets out the process under the FIDIC Red, Yellow and Silver Books, 1999 editions, for defects under: clause 7.5, where Plant, Materials, design or workmanship are discovered to be faulty or otherwise non-compliant with the Contract, and the Employer rejects the relevant Plant, Materials, design or workmanship clause 7.6, when the Employer directs the Contractor to strip out and substitute any non-compliant Plant or Materials, to take out and reperform any other work that does not meet the Contract, or to carry out any work urgently needed to protect the safety of the Works clause 11.1, under which the Contractor must perform all tasks necessary to make good defects or damage, as notified by the Employer on or before the end of the Defects Notification Period clause 12.3, if a Test after Completion is not passed, and clause 11.1(b) concerning the rectification of defects applies (Yellow and Silver Books only) For further details, see Practice Note: FIDIC Contracts (pre–2017...
This flowchart sets out the process under the FIDIC Red, Yellow and Silver Books, 2017 editions, for defects under: clause 7.5, when any Plant, Materials, design or workmanship is defective or otherwise not in accordance with the Contract, the Employer rejects the affected item and the Engineer (or, under the Silver Book, the Employer) instructs remedial works clause 7.6, where the Employer directs the Contractor to remove and replace non-compliant Plant or Materials, remove and re-execute other non-conforming work, or undertake urgent tasks required for the safety of the Works clause 11.1, under which the Contractor must carry out all work needed to rectify defects or damage, as notified by the Employer on or before the expiry of the Defects Notification Period clause 12.3, if a Test after Completion is not passed, with clause 11.1(b) on remedying defects applying (Yellow and Silver Books only) For more information, see Practice Note: FIDIC Contracts 2017—defects...
January 2024’s ruling in Archer Western-De Moya Joint Venture v Ace American Insurance Co, following the 2023 outcome in South Capitol Bridgebuilders v Lexington Insurance Co, is set to draw attention from insurance market participants in other jurisdictions, given the shortage of reported LEG decisions, not least because these disputes frequently arise in arbitrations that remain unreported. When America sneezes, the world can sometimes catch a cold; insurers active in this sphere will be hoping that is not the result here... Background CAR policies typically insure all risks of loss and damage on construction or building projects, yet they commonly exclude, to varying extents, matters such as design faults or workmanship defects. The LEG defects clauses present three alternative exclusion formulations for CAR wordings. The broadest carve-out, and therefore the least cover, is LEG 1, which provides that the insurer 'shall not be liable for: Loss or Damage due to defects of material workmanship design plan or specification'. At the opposite end, LEG 3 contains the narrowest exclusion,...
Introduction Section 32(1)(b) of the Limitation Act 1980 (LA 1980) defers the start of the ordinary limitation period where any fact material to the claimant’s cause of action has been deliberately kept from the claimant by the defendant. Under LA 1980, s 32(2), for the purposes of s 32(1), a deliberate breach of duty carried out in circumstances where it is unlikely to be discovered for a period counts as deliberate concealment of the facts bound up with that breach of duty, for those purposes in question. These rules are plainly pertinent to construction contracts, and defects in particular. The covering up of substandard workmanship and/or defective works arising from poor design in the normal course of construction frequently leads to the much later appearance of defects through physical damage, or to the uncovering of the poor workmanship/design itself before any physical damage occurs. A recent run of case law (including at appeal level) has examined the proper interpretation of the statutory limitation provisions in the context of defects...
The roll-out of the JCT 2024 suite continued with the issue of 2024 editions of the JCT Major Project, Constructing Excellence, and Prime Cost Building contracts (together with their related guides and sub-contracts) on 16 October 2024. The Major Project contract documents comprise the following: Major Project Construction Contract 2024 (MPCC 2024) Major Project Construction Contract Guide 2024 (MP/G 2024) Major Project Sub-Contract 2024 (MP/Sub 2024) Major Project Sub-Contract Guide 2024 (MP/Sub/G 2024) Reference copies of these materials will shortly be available on Lexis+® Construction, under our sub-topic ‘JCT contracts 2024’ (within the main topic ‘Standard form construction contracts’), and via Practice Note: JCT contracts 2024—reference copies. In this article, we outline the principal changes to the MPCC 2024 and MP/Sub 2024 when set against their 2016 equivalents and other forms within the JCT 2024 suite. For details of the other contracts released as part of the JCT 2024 suite, including the key amendments introduced since 2016, see Practice...
The Building Act 1984 (BA 1984) BA 1984 authorises the Secretary of State or Welsh Ministers to create building regulations for multiple aims, among them safeguarding the health and safety of people in or around buildings. It creates criminal liability for contraventions of those regulations. It further allows practical guidance on the requirements of the building regulations to be set out in Approved Documents. The Building Regulations 2010, SI 2010/2214 (Building Regulations), are issued under BA 1984 as its enabling statute...
Common law—implied terms Reasonable care and skill Where a purchaser obtains a house from a builder either: during the course of its construction, or under a contract to build it, the common law implies a term that the builder will perform in a proper, workmanlike manner. It is also implied that the builder will provide sound and suitable materials. Fit for human habitation Common law further implies a term that the property will be reasonably fit for human habitation. Liability covers defective design as well as poor materials or workmanship. The Court of Appeal decided the term applied where a buyer purchased from a builder a house completed save for decorations, certain fittings, and plastering in one room. Subject to the Unfair Contract Terms Act 1977 (UCTA 1977), which permits exclusion only where reasonable, express terms may displace the implied terms. They are not, however, displaced merely because the house is built to agreed plans, specifications and specified...
On construction projects, flaws commonly emerge within the works. Under the majority of building contracts, the contractor must return to site to make good any defects that arise or are identified within a set period after practical completion of the works, and to do so on site. In the industry, this window is usually called the defects liability period (DLP), though JCT contracts call it the rectification period, NEC uses the term defects date, and FIDIC refers to the defects notification period. What is a defect? As the DLP deals with remedying ‘defects’, it is important to consider the scope of that term and to understand what it is taken to cover. ‘Defect’ is not a technical term of art and there is no single ‘standard’ definition of what amounts to a defect in building works. In general terms, however, a defect is work that does not achieve the standard or a specification required by the building contract. This may result from faults in workmanship, materials or design,...