MacRoberts on Scottish building contracts

418 Pages·2008·1.271 MB·English

by  MacRoberts (Firm)

MacRoberts on
Scottish Building Contracts
Second Edition
MacRoberts
Solicitors
Foreword by
The Rt. Hon. Lord Hamilton

MacRoberts on
Scottish Building Contracts
Second Edition
MacRoberts
Solicitors
Foreword by
The Rt. Hon. Lord Hamilton
© 1999, 2008 by Blackwell Publishing Ltd
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First published 2008 by Blackwell Publishing Ltd
ISBN-13: 978-14051-2973-2
Library of Congress Cataloging-in-Publication Data
MacRoberts on Scottish building contracts / MacRoberts Solicitors;
foreword by the Rt. Hon. Lord Hamilton.–2nd ed.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-1-4051-2973-2 (hardback : alk. paper)
1. Construction contracts–Scotland. I. MacRoberts (Firm)
KDC501.M33 2008
343.411′078624–dc22
2007027071
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Contents
Foreword by The Rt. Hon. Lord Hamilton ix
Preface xi
1 Building Contracts in General 1
1.1 Introduction 1
1.2 Defi nition of a building contract 1
1.3 Parties involved in a building project 5
1.4 Types of building contract 10
1.5 SBCC forms of building contract 15
2 Procurement 18
2.1 Introduction 18
2.2 EU public procurement regime and EU economic
and legal principles 19
2.3 Beyond the EU 21
2.4 Conditions for application of the procurement rules 22
2.5 Who must comply with the Regulations 22
2.6 Treatment of a proposed contract as a works contract,
supply contract or a services contract 23
2.7 What are the relevant fi nancial thresholds? 27
2.8 Is there an applicable exclusion? 27
2.9 Types of procurement procedure 28
2.10 The open procedure 28
2.11 The restricted procedure 30
2.12 The negotiated procedure with advertisement 32
2.13 The competitive dialogue procedure 35
2.14 Awarding the contract 40

2.15 The Alcatel mandatory standstill period 41
2.16 Remedies against contracting authorities
(bidder grievances and complaints) 44
2.17 Awarding low-value contracts fairly 46
3 Entering into a Building Contract 48
3.1 Introduction 48
3.2 Essentials of written and oral contracts 48
iv Contents
3.3 Capacity to contract 53
3.4 Implied terms 56
3.5 Letters of intent 59
3.6 Incorporation of terms by reference to
another document 61
3.7 Signing a building contract 63
4 Employers’ Obligations 66
4.1 Introduction 66
4.2 Possession of the site 67
4.3 Administration 70
4.4 Information and instructions 72
4.5 Variations 73
4.6 Other obligations 77
5 Contractors’ Obligations 79
5.1 Introduction 79
5.2 Completing the works 79
5.3 Quality of the work 86
5.4 Defective work 95
5.5 Progress of the works 96
5.6 Insurance and indemnity – the SBC provisions 98
5.7 Joint Fire Code – the SBC provisions 99
5.8 Health and Safety 100
6 Time 101
6.1 Introduction 101
6.2 Commencement of the works 101
6.3 Time of the essence 102
6.4 Progress of the works 102
6.5 Adjustment of Completion Date and extension
of time for completion 103
6.6 Partial possession and sectional completion 112
6.7 Completion of the works 112
6.8 Damages for late completion 114
6.9 Liquidated damages 115

7 Certifi cation 119
7.1 Introduction 119
7.2 Formal requirements of certifi cates 119
7.3 Interim certifi cates 122
7.4 Final certifi cates 127
7.5 Other certifi cates 132
7.6 Roles and duties of certifi ers 134
Contents v
8 Payment 139
8.1 Contractual payment 139
8.2 Adjustment of the contract price 150
8.3 Loss and expense 157
8.4 Quantum meruit 161
8.5 Quantum lucratus 164
8.6 Contractual retention 165
9 Ending a Building Contract 168
9.1 Introduction 168
9.2 Frustration and impossibility 168
9.3 Force majeure 170
9.4 Termination 171
9.5 Repudiation and rescission 177
9.6 Death and illness 179
9.7 Illegality 180
9.8 Insolvency 181
9.9 Prescription 182
10 Remedies 188
10.1 Introduction 188
10.2 Rescission 188
10.3 Specifi c implement 190
10.4 Damages for breach of contract 191
10.5 Finance charges 195
10.6 Interest 197
10.7 Interdict 201
10.8 Withholding payment 201
10.9 Suspending performance 204
10.10 Delictual claims 205
11 Sub-contractors and Suppliers 210
11.1 Introduction 210
11.2 Nominated and domestic sub-contractors 210
11.3 Privity of contract 213
11.4 Relationship between main and sub-contracts 215
11.5 Main contractor’s discount 216
11.6 Suppliers 217

11.7 Retention of title clauses 217
11.8 Supply of goods by sub-contractors 218
12 Assignation, Delegation and Novation 220
12.1 Introduction 220
12.2 Common law 220
12.3 Effect of assignation upon claims 221
12.4 Delectus personae 223
vi Contents
12.5 Assignation under the SBC 223
12.6 Delegation 224
12.7 Novation 224
13 Rights for Third Parties 226
13.1 General 226
13.2 Collateral Warranties 226
13.3 Typical clauses 229
13.4 Effects of the 1996 Act on collateral warranties 235
13.5 Third party rights schedule 235
13.6 Assignation 237
14 Insurance, Guarantees and Bonds 238
14.1 Insurance – general principles 238
14.2 Insurance under the SBC 240
14.3 Professional indemnity insurance 245
14.4 Latent defects insurance 247
14.5 Guarantees 247
14.6 Bonds 249
15 Dispute Resolution 254
15.1 Introduction 254
15.2 Litigation 254
15.3 Mediation 263
15.4 Expert determination 269
15.5 Early neutral evaluation 273
15.6 Dispute boards 274
16 Adjudication 276
16.1 Introduction 276
16.2 The scope of Part II of the 1996 Act 276
16.3 The Notice of Adjudication 278
16.4 Appointment of the adjudicator 279
16.5 The referral notice 280
16.6 Conduct of the adjudication 280
16.7 The decision 285
16.8 Adjudicator’s fees and costs/expenses of the parties 286
16.9 Liability of the adjudicator 288

16.10 Enforcement proceedings 289
16.11 Proceedings following adjudication 300
16.12 Human rights 300
16.13 Changes in the statutory framework 301
17 Arbitration 303
17.1 Introduction 303
17.2 Arbitration proceedings 309
Contents vii
17.3 Arbiter’s powers 313
17.4 Termination of arbitration contracts and proceedings 314
17.5 Decrees arbitral 314
17.6 Awards of interest 318
17.7 Awards of damages 320
17.8 Awards of expenses 320
17.9 The stated case 321
17.10 Judicial review 323
17.11 Reduction 323
18 Tax 328
18.1 Value Added Tax 328
18.2 The Construction Industry Scheme 332
19 Health and Safety 340
19.1 Introduction 340
19.2 Common law 340
19.3 Health and Safety at Work etc. Act 1974 341
19.4 The Construction (Design and Management)
Regulations 2007 347
19.5 The SBC provisions 360
Table of Cases 362
Table of Statutes 383
Table of Statutory Instruments 389
Table of References to the JCT Standard Form of Building Contract
(1998 Edition) and the Standard Building Contract with Quantities
for Use in Scotland SBC/Q/Scot (Revised May 2006 Edition) 395
Table of References to the Design and Build Contract for Use in Scotland,
DB/Scot 2005 (Revised May 2006) 398
Index 399