This week, I was delivering a full-day workshop for a specialist subcontractor to give them confidence with subcontracts – particularly when negotiating the one-sided and complex contracts they are often asked to sign by main contractors. We went deep into specific issues that bothered them, including those surrounding completion.
Tricky Legal Chapter
A decade ago we got a supplier in to replace the doors in our house. At one point, Darryl – over 2m tall, burly and holding my housekeys – insisted I write a cheque there and then as final payment. I was too scared to refuse, even though he had not completed all the work we’d agreed, and some of it was to a shocking standard. I dearly wished we’d had a clear contract to refer back to. I knew that once he’d been paid, he would hand back my keys (phew), but it’d be very unlikely that he’d fix the faults and minor outstanding items… it was so stressful.
Of course, this is a microcosm of what happens on projects big and small every single day, either when sections are completed, subcontract works are finished or the whole project is done and dusted. Back in September, I asked you to consider the typical consequences for the parties when a project is noted as complete. These are some of the things you could have listed:
- the supplier’s principal obligations are completed
- title, risk and insurance obligations pass to the client
- project security documents, such as bonds or guarantees, expire; product insurances and guarantees start
- further payments are due – a stage/interim payment, other sums and half the retention
- project mechanisms end ie the right to change the scope, or to reject goods and a get a refund
- liabilities crystallise such as any compensation for delayed completion
- design details, documents and/or training need to be provided to the client
- new remedies start, such as a defects period – when the client can ask the supplier to sort out problems – or a new phase of testing
- the limitation period begins ie the legal period during which any claims must be brought.
Everyone wants the project to be over – either to celebrate their successes or to chalk it down to experience and move on!
Completion is a tricky legal chapter in a project. You must be clear before you start what it means to you to complete your scope. Who should decide this and on what basis? Is it one person’s opinion (like the client) or it is based on specific tests to ensure your client can use the goods/works as intended?