Legal Practice Notes

Principal documents The key papers required when establishing a corporate joint venture are as follows: the articles of association (the 'articles') of the joint venture company ( JVC); and the joint venture agreement ( JVA) (often, and sometimes also, called a 'shareholders' agreement'). A shareholders' agreement operates under English common law as a commercial contract in nature and is not governed by any distinctive or special legal rules. The expression 'shareholders' agreement' may denote an informal—indeed, even an implied—arrangement between only certain shareholders in a company, as well as a highly detailed agreement regulating, for instance, the formation of a JVC. For a discussion of what is typically covered in the JVA and also in the JVC's articles, see Practice Note: Documenting the corporate joint venture......

This Practice Note considers the torts of: trespass to land tort of conversion and trespass to goods trespass to the person (assault, battery and false imprisonment) privacy and defamation tortious product liability tortious liability for animals For guidance on other torts, see Practice Notes: Procedural abuse torts and similar Vicarious liability and multi-party torts For guidance on negligence claims, see Practice Note: Negligence—key elements to establish a negligence claim and related content. For practical guidance on negligence, nuisance and breach of statutory duty claims, see: Tort and negligence claims—overview. For guidance on bringing and defending claims against professionals, see: Professional negligence claims—overview. The tort of trespass to land This tort is committed where an individual ( D) carries out an act that brings about entry onto another’s land ( C) without consent or lawful...

Establishing who holds intellectual property in the designs, drawings and specifications for a construction project is crucial to all participants. The copyright owner will seek to safeguard those works, limit how and to what extent others may use them, and retain avenues of redress if infringement occurs. Conversely, those who must copy or rely on the designs need sufficient rights to do so. Architect Civil and M& E engineers Other specialist engineers and designers The contractor and its sub-contractors Accordingly, clauses allocating copyright are commonplace in professional appointments, building contracts and collateral warranties. This Practice Note concentrates on such clauses within construction contracts. See also Practice Note: Copyright in a consultant’s appointment. Copyright in designs Copyright arises automatically in any original artistic work; the author need not register or apply to obtain that protection. The definition of artistic work is set out in the...

By their very nature, construction schemes are susceptible to turbulent economic shifts or incidents that influence the cost and availability of the goods, materials and labour required to perform the works. Consequently, delay or disruption may follow, and budget blowouts are common, especially on major schemes. For instance, in 2021 the UK construction sector grappled with scarcities and surging prices of essential goods and materials, which negatively affected productivity across multiple areas. A rebound in worldwide demand for construction products after the worst phases of the coronavirus ( COVID-19) pandemic in 2020—when manufacturing capacity was harmed across the globe—together with reduced distribution capability and other pressures, disrupted supply chains end to end, producing price inflation, extended lead times and shortages. Materials hit included timber, steel, cement, roof tiles, paints and electrical components. In 2022, matters were compounded by the outbreak of war...

This Practice Note This Practice Note sets out a hands-on framework for dealing with disagreements about the proper construction of a contract. It draws on the principles of contractual construction contained in the following Practice Notes and should be considered alongside that guidance: Contract interpretation—the guiding principles Contract interpretation—rules of contract interpretation The situations in which such disagreements emerge are endlessly diverse. Yet, whether it surfaces as a client approaching you about an unforeseen demand from a contracting counterparty, or as the reply from a third party on whom you have served such a demand, the core refrain is the same—‘that’s not what was agreed’. Once that contention is made, practitioners will typically seek to conclude the dispute promptly and without resort to costly proceedings. A firm understanding of how a court would tackle the construction of the disputed term(s) will allow you to make...

This Practice Note reviews termination by the Contractor under the FIDIC Red, Yellow and Silver Books 1999, the Gold Book 2008 and the Pink Book 2010. It does not consider any general right to terminate at law. In addition, the governing law of the Contract may influence how certain provisions operate. For discussion of the 2017 editions of the Red, Yellow and Silver Books, see Practice Note: FIDIC contracts 2017—termination by the Contractor... Who can terminate? Both the Employer and the Contractor may bring the Contract to an end. Clause 15 sets out the process for Employer termination, and Clause 16 sets out the process for Contractor termination. Termination is also addressed in the following: Sub- Clauses 9.4, 11.4 and 19.6 Sub- Clause 10.7 of the FIDIC Gold Book For guidance on termination by the Employer, see Practice Note: FIDIC contracts (pre-2017...

This Practice Note is designed to offer guidance to employers on recognising issues with insolvent contractors and on ways the employer may take precautionary steps to protect itself in advance. For details and information on the steps to follow where the contractor has become insolvent, see: Employer steps to take if contractor becomes insolvent—checklist......

Note: this Practice Note deals solely with the creation of binding legal relations by contract (whether written or oral) and does not address arrangements that must be made by deed to be valid; see Practice Note: Deeds. While many will recognise the usual requirements for a contractually binding agreement—such as offer, acceptance, consideration and certainty (see: Forming enforceable contracts—overview)—it is helpful to grasp the courts’ overall approach and how those elements fit together. The essential ingredients of an enforceable contract offer and acceptance consideration (unless the contract is executed by deed) an intention to create legal relations (that is, an intention to be legally bound) certainty These broad principles have greater depth, as explored in the following Practice Notes: Forming enforceable contracts—offer Forming enforceable contracts—acceptance Forming enforceable...

What is contaminated land? ‘ Contaminated land’ is a precise legal expression set out in Part IIA of the Environmental Protection Act 1990 ( EPA 1990). The contaminated land regime places strict, retrospective liability. It obliges local authorities ( LAs) to find contaminated land within their districts and to apportion responsibility for land contaminated historically. By contrast, ‘land contamination’ is a broad label for any land that might be affected by pollutants, though not necessarily to thresholds that trigger contaminated land liability. When deciding whether land is contaminated, LAs must follow statutory guidance from Defra or the Welsh Government. Updated statutory guidance took effect in April 2012. The default assumption when assessing land with potential contamination is that it is not ‘contaminated land’ unless there is a reason to conclude otherwise at that point in time as such......

Consultants carrying out the role of certifier Consultants including employers’ agents, contract administrators, project managers and architects are frequently called upon to serve as certifier under a building contract. By way of illustration, across several JCT forms, such as the Standard Building Contract and the Intermediate Building Contract, the architect/contract administrator must make a range of determinations, notably issuing the practical completion certificate and the certificate of making good (see also Practice Note: Administration of construction contracts). Under the JCT Design and Build Contract 2011/2016/2024, this function is undertaken by the employer’s agent. Within the NEC3/ NEC4 suites the project manager fulfils the certifier role, and comparable positions exist in other standard forms (see, for instance, Practice Note: FIDIC contracts 2017—the role of the Engineer). Performing as certifier places the consultant in a decision‑making position and imposes duties to act fairly and with...

Agreement for lease An agreement for lease is a commitment between a landlord or property owner and a tenant, under which the tenant promises to take a lease of all or part of a property at a future date, once the landlord has met specified obligations set out in the agreement. In legal terms, an agreement for lease is a contract for the sale or other disposition of an interest in land, and it will be ineffective unless it complies with section 2 of the Law of Property ( Miscellaneous Provisions) Act 1989 ( LP( MP) A 1989). It must: be in writing set out or incorporate all the terms expressly agreed between the parties, and be signed by, or on behalf of, the parties Such an agreement is required where the landlord and tenant cannot enter into the lease...

When funding any development or construction scheme, the lender (or funder) and its advisers will adopt a range of measures to safeguard the lender’s position. These protections are designed to ensure that, at the very least, the lender can recover the monies advanced if the borrower (or developer) becomes insolvent or the project encounters difficulties. A principal document in any development financing is the contract between the lender and the borrower (the ‘facility agreement’), which sets out detailed provisions specific to the development. For guidance on the key construction matters that should be addressed in facility agreements, see Practice Note: Facility agreements—construction provisions. Another significant element of a development financing is the lender’s lawyers reviewing the construction documentation prepared by the borrower and its lawyers to confirm that it is correctly drafted and affords suitable rights to the borrower and any relevant third...

What is a facility agreement? Many construction projects, especially larger developments, often need external finance from banks or other lenders to support them during the build phase. The borrower will usually enter a facility agreement with the lender (or a group of lenders), which sets out the terms and conditions of the deal. It records the financing arrangements reached between the parties. It covers obligations, core pricing and timing requirements mutually agreed between them. Typical structure The precise make-up of a facility agreement varies according to factors such as the form of facility provided and the proposed application of the funds. Nonetheless, its core purpose is to see the lender’s capital repaid on time and to secure the return the lender expects on the loan at the agreed point. Consequently, most facility agreements contain broadly comparable provisions, commonly set out in a similar...

Under the Construction ( Design and Management) Regulations 2015 (the ‘ Regulations’), creating the construction phase plan (the ‘ Plan’) is a core obligation of the principal contractor (for details of that role, refer to Practice Note: CDM Regulations 2015—the role of the contractor and principal contractor). A Plan is mandatory on every scheme. On jobs with a single contractor, that contractor must see that the Plan is produced. Together with the ‘health and safety file’ (the ‘ File’), the purpose of the Plan is to secure, so far as is reasonably practicable, the health and safety of those carrying out the works and anyone else impacted by the activity during the construction phase (see Practice Note: CDM Regulations 2015—the health and safety file). Why prepare a Construction Phase Plan? The principal contractor is required to draft, review, revise and put the Plan into effect so that it...

On most building schemes, the main contractor assumes control of the site from the date of possession and keeps that responsibility until practical completion. Under JCT Insurance Option A, for instance, the main contractor must maintain a joint insurance policy right up to the issue of the practical completion certificate (see Practice Note: JCT contracts—insurance)... The importance of CDM The UK construction sector employs over two million people—more than 6% of the national workforce—yet, despite significant advances in culture, procedures and risk management, it remains among the most hazardous industries, with around 40–50 on‑site fatalities each year. The industry has operated under Construction ( Design and Management) Regulations since 1994, with three sets of CDM Regulations introduced in that period. The 2015 version arose partly from a push towards de‑regulation, partly because the 1994 regime did not accurately transpose the EU Temporary or Mobile...

Historic Government initiatives Lengthy contractual payment terms and late payment have long been recognised as a persistent issue within the construction sector. When a customer (for example, a main contractor) fails to pay a supplier (for example, a sub‑contractor) promptly, the consequences for the supplier can be severe—disrupted cash flow may force the supplier to incur borrowing costs to bridge the period of non‑payment, access to affordable finance may become more difficult generally, the supplier may face disputes within its own supply chain if it cannot pay on time, and, in the worst case, insolvency may follow. To tackle these difficulties in the public sector, the Office of Government Commerce ( OGC), as it was then known, issued its ‘ Guide to best “ Fair Payment” practices—construction procurement’ in 2007. The guidance set out recommended fair payment principles and practices and applied to public sector works...

Managing contaminated land liabilities is an important consideration in construction projects Liabilities for land contamination commonly emerge within the planning framework and the contaminated land regime contained in Part IIA of the Environmental Protection Act 1990 ( EPA 1990). Remediation via the planning route: across England and Wales, most contamination matters are addressed through the planning system. To make sure a site is fit for its proposed use, and to avoid unacceptable pollution risk, the effects of contamination on a scheme should be examined through planning so far as they are not dealt with by other regimes, including the EPA 1990, Pt IIA, the Building Regulations and environmental permits (see: Environmental permits and exemptions—overview). Before permission is issued, the developer together with an environmental consultant ought to evaluate the potential contamination risks. Applicants are advised to liaise early with the local planning...

This Practice Note sets out what construction management is, outlines the benefits and drawbacks of this procurement approach, and clarifies the participants’ responsibilities. At present, the traditional route and the design and build route are the predominant procurement choices in the UK construction sector (see Practice Notes: Traditional procurement of construction contracts and Design and build procurement). Management procurement now has a smaller share, though that has not always been so. In the late 1980s and early 1990s, it was the preferred option for many large commercial schemes delivered then. The balance may yet tip back in that direction. Its two chief forms are management contracting and construction management (see also Practice Note Management contracting). These themes are explored throughout this Practice Note for further clarity and context. What is construction management? Under construction management, the client appoints a consultant team to design the scheme in the...

This training pack includes sample Power Point decks with supporting notes, intended for trainers delivering an overview of letters of intent to trainee solicitors and other newcomers to construction. Covered themes include what letters of intent are and the circumstances in which they are used; the legal and commercial risks to watch for when relying on letters of intent; guidance on drafting them; and possible substitutes for a letter of intent. The materials are available in both Power Point and Word formats and are fully customisable in every respect as required by trainers......

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z M& E Abbreviation for mechanical and electrical. Main contractor On a project where some work is sub-contracted, the main contractor (also called the head or lead contractor) is the party that enters into a contract with the employer and is ultimately accountable for delivering the works. The main contractor may then sub-contract part or all of the works to its sub-contractors. Maintenance period The period following practical completion during which the contractor is required to return to site to make good any defects that occur or are identified during that time......