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What The Contract Controls:
The Cost of the Project
The Time it Takes
The Quality of the Works
Payment to the Contractor
The Design
What Approvals are Required
Who Insures the Works
Facility/Access Requirements
What Constitutes Completion
After Completion
Changes to the Works
Safety








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A contract is a legally enforceable agreement between 2 or more parties.  It should stipulate all the actions required during its execution and deal with all reasonably foreseeable events that may occur.

A Home Extension Contract is a 45 clause agreement covering all the basic requirements for domestic building works.  Simply fill in the blank parts and both parties sign it.

The most common issues relating to domestic building work are described below:

Cost

The works have an agreed contract sum which can only be varied by defined means.
  • A change to the extent, quality or method of the works by the client will mean the contractor may require additional money
  • In certain circumstances the contractor may not have been able to have forseen costs of aspects of the works, an example of this is foundations and poor ground conditions.
    • Therefore the contract allows provisional sums for works that an experienced contractor could not have foreseen.

 

Time

  • The duration for the works to be completed in, is just as important to the contractor as it is for the client.  The contractor will have time related costs such as staff, scaffolding, overheads and management.
  • If the contractor runs over the agreed period for the works they are already penalised with their ongoing costs
    • Therefore in the event of an overun the contractor will not be paid anymore stage payments but will collect all outstanding money when the works are complete.  This keeps the contractor incentivised without penalising them more than they already are.
    • The Contractor is still assured of payment by the money deposited in the Project Bank Account.

 

Quality

  • The standards of the work installed have in certain circumstances to meet statutory requirements and the Building Control officer will not pass any work that is not upto the required standard.
  • However certain aspects re not within the remit of the BCO, items such as decoration, security of the premises and workmanship of elements such as plastering and poorly fitted joinery (excepting fire doors and the like)
    • Therefore the contract regulates all works to the requirements of the NHBC and that of suitably qualified and experienced contractors.

 

Payments

The contractor is not expected to fund the whole of the works from start to finish unless a specific agreement is in place.  The contractor would need to borrow the money and therefore pass on the interest payments to the client if this was the case.  Equally the client should not pay for something they don't physically have.
  • Therefore 'stage' payments are to be agreed at the outset and formally recorded in the contract.
  • No upfront payments are permitted.  The contractor is assured of payment via the project bank account.

 

Design

The works will need to be designed by a competent person to ensure adequate standards and compliance with statutory requirements.  Either the contractor or the client can provide the design.
  • Therefore the contract will stipulate which party provides the design and the standard that it should be up to.

 

Approvals

Third party approvals will be required for all but the simplest of works.  Bodies such as the Local Authority Planning and Building Control departments, electricity and gas suppliers etc all need coordinating and inspections carried out.
  • The responsibility for managing these parties is clearly agreed in the contract.

 

Insurance

The client will need insurance for the property as it stands prior to the works.  It would be uneconomical for the contractor to provide further insurance for the works.  However the contractor cannot benefit from his own wrongs.
  • Therefore the client will inform their insurance provider of the impending works and deal with any premium alterations as a consequence.
  • The contractor will ensure that they have public liability insurance.

 

Facilities

The contractor may need certain facilities to undertake the works, items such as running water and electricity.  Temporary toilets and kitchens may be required by the client during the works.
  • The allocation of who provides what is clearly laid out in the contract.

 

Completion

The works are only completed when certain criteria is fullfilled.
  • The contract determines the criteria including testing, defects and approvals.

 

After Completion

Certain elements of the works need to 'bed in' to determine if they are installed correctly.
  • The contract retains the contractor for a period to remedy defects arising from poor installation.

 

Changes

If the client wishes to change anything whether it be installed or planned then the contract needs to permit them to do so otherwise the contractor can refuse.
  • The contract allows the client to change their mind as long as it is within the general scope of the works.

 

Safety

The 'site' may be part of a residential area and as such consideration should be given to neighbours and public.
  • The contract determines the criteria to be used to ensure the area is kept as safe as possible.

 

 

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