MacRoberts on Scottish Construction Contracts (3^rd Ed.)

Provides a guide to the general principles of Scottish law relevant to construction contracts and the main provisions of the standard forms of construction contract used in Scotland including:

• the obligations of employers and contractors
• certification
• payment
• ending a construction contract
• remedies
• subcontracts
• collateral warranties
• insurance
• dispute resolution
• regulatory matters

The new edition has been substantially updated and expanded to take account of the latest editions of the Scottish Standard Building Contracts and recent case law. Specific updates have been driven by the following changes to legislation and standard contracts

• Local Democracy Economic Development and Construction Act 2009 and the relative Scheme for Construction Contracts
• Arbitration (Scotland) Act 2010
• Recognising the significant increase in use of NEC3 standard forms of contract, references to NEC3 provisions have been introduced throughout the relevant chapters so that each now covers the common law, the SBCC provisions and the NEC3 provisions.

It also features new chapters on: litigation; competition; the Bribery Act 2010; and guarantees and bonds.

From reviews of previous editions:

• ?very approachable and readable? I would particularly recommend this book to non-legal construction professionals? ? Construction & Engineering Law
• ?an informative textbook for the practitioner? [a] significant contribution to knowledge? ? Arbitration
• ?a highly competent? textbook which would be of value for industry professionals with no legal background? ? Construction Law

Preface xv

1 Construction Contracts in General 1

1.1 Introduction 1

1.2 Definition of a construction contract 1

1.3 Parties involved in a construction project 5

1.4 Types of construction contract 15

1.5 The SBCC forms of building contract 23

1.6 The NEC3 forms of contract 25

1.7 Building Information Modelling (BIM) 27

1.8 Soft Landings 29

2 Procurement 32

2.1 Introduction 32

2.2 The EU public procurement regime and EU economic and legal principles 33

2.3 Beyond the EU 35

2.4 Conditions for application of the procurement rules 36

2.5 Who must comply with the Regulations? 36

2.6 Treatment of a proposed contract as a works contract, supply contract or a services contract 37

2.7 What are the relevant financial thresholds? 40

2.8 Is there an applicable exclusion? 41

2.9 Types of procurement procedure 42

2.10 The open procedure 42

2.11 The restricted procedure 43

2.12 The negotiated procedure with advertisement 46

2.13 The competitive dialogue procedure 49

2.14 Awarding the contract 53

2.15 The Alcatel mandatory standstill period 54

2.16 The use of framework agreements in public procurement 56

2.17 Remedies against contracting authorities (bidder grievances and complaints) 57

2.18 Awarding low-value contracts fairly 61

2.19 Forthcoming changes in the Procurement law landscape 62

3 Entering into a Construction Contract 64

3.1 Introduction 64

3.2 Essentials of written and oral contracts 64

3.3 Capacity to contract 71

3.4 Implied terms 73

3.5 Letters of intent 78

3.6 Incorporation of terms by reference to another document 80

3.7 Contract interpretation 83

3.8 Signing a building contract 84

4 Employers’ Obligations 87

4.1 Introduction 87

4.2 Possession of the site 88

4.3 Administration 92

4.4 Information and instructions 95

4.5 Variations 97

4.6 Other obligations 102

5 Contractors’ Obligations 103

5.1 Introduction 103

5.2 Completing the works 103

5.3 The quality of the work 118

5.4 Defective work 128

5.5 Progress of the works 131

5.6 Insurance and indemnity 138

5.7 The Joint Fire Code 139

5.8 Health and safety 140

6 Time 141

6.1 Introduction 141

6.2 Commencement of the works 141

6.3 Time of the essence 142

6.4 Progress of the works 142

6.5 Adjustment of the Completion Date and extension of time for completion 143

6.6 Partial possession, sectional completion and acceleration 152

6.7 Completion of the works 153

6.8 Damages for late completion 154

6.9 Liquidated damages 155

6.10 The SBC/DB 158

6.11 The NEC3 159

7 Certification 168

7.1 Introduction 168

7.2 Formal requirements of certificates 168

7.3 Interim certificates 171

7.4 Final certificates 176

7.5 Other certificates 180

7.6 Roles and duties of certifiers 183

8 Payment 188

8.1 Contractual payment 188

8.2 Adjustment of the contract price 206

8.3 Loss and expense 215

8.4 Quantum meruit 220

8.5 Quantum lucratus 222

8.6 Contractual retention 224

8.7 Project bank accounts (PBA) 227

9 Ending a Construction Contract 229

9.1 Introduction 229

9.2 Frustration and impossibility 229

9.3 Force majeure 232

9.4 Termination 233

9.5 Repudiation and rescission 242

9.6 Death and illness 243

9.7 Illegality 244

9.8 Insolvency 245

9.9 Prescription 248

10 Remedies 254

10.1 Introduction 254

10.2 Rescission 255

10.3 Specific implement 256

10.4 Damages for breach of contract 257

10.5 Finance charges 261

10.6 Interest 263

10.7 Interdict 267

10.8 Withholding payment 267

10.9 Suspending performance 269

10.10 Delictual claims 271

11 Sub-contractors and Suppliers 275

11.1 Introduction 275

11.2 SBCC Standard Sub-Contracts 275

11.3 NEC3 Standard Sub-Contracts 276

11.4 Nominated and domestic sub-contractors 276

11.5 Named and specialist Sub-Contractors 277

11.6 Direct payments to sub-contractors 279

11.7 Privity of contract 280

11.8 Relationship between main and sub-contracts 282

11.9 Restrictions on sub-contracting 283

11.10 Main contractor’s discount 284

11.11 Suppliers 285

11.12 Retention of title clauses 285

11.13 Supply of goods by sub-contractors 287

11.14 Adequate mechanism for payment 288

12 Assignation, Delegation and Novation 290

12.1 Introduction 290

12.2 Common law 291

12.3 Effect of assignation upon claims 292

12.4 Delectus personae 294

12.5 Assignation under the SBC and the SBC/DB 294

12.6 Assignation under the NEC3 295

12.7 Delegation 295

12.8 Novation 296

13 Rights forThird Parties 300

13.1 General 300

13.2 Collateral warranties 300

13.3 Typical clauses 303

13.4 Effects of the 1996 Act on collateral warranties 310

13.5 Third party rights schedule 311

13.6 Assignation 313

14 Insurance 314

14.1 Insurance: General principles 314

14.2 Insurance under the SBC and the SBC/DB 318

14.3 Insurance under the NEC3 323

14.4 Professional indemnity insurance 325

14.5 Latent defects insurance 327

14.6 Project insurance 327

15 Litigation 329

15.1 Introduction 329

15.2 The litigation process 329

16 Adjudication 338

16.1 Introduction 338

16.2 The scope of Part II of the 1996 Act, as amended by the 2009 Act 338

16.3 The notice of adjudication 340

16.4 Appointment of the adjudicator 341

16.5 The referral notice 342

16.6 Conduct of the adjudication 342

16.7 The decision 347

16.8 Adjudicator’s fees and costs/expenses of the parties 348

16.9 Liability of the adjudicator 351

16.10 Enforcement proceedings 351

16.11 Proceedings following adjudication 373

16.12 Human rights 373

16.13 Adjudication in PPP contracts 375

17 Arbitration 377

17.1 Introduction 377

17.2 The Arbitration (Scotland) Act 2010 380

18 Other Forms of Dispute Resolution 396

18.1 Mediation 396

18.2 Settlement agreements 408

18.3 Expert determination 414

18.4 Early neutral evaluation 418

18.5 Senior management review 419

18.6 Dispute boards 422

19 Tax 426

19.1 Value Added Tax (VAT) 426

19.2 The Construction Industry Scheme 433

20 Health and Safety 437

20.1 Introduction 437

20.2 Common law 437

20.3 Health and Safety atWork etc. Act 1974 438

20.4 The Construction (Design and Management) Regulations 2007 444

20.5 The SBC and the SBC/DB provisions 455

20.6 The NEC3 provisions 456

21 RegulatoryMatters: Competition in Construction 457

21.1 Competition law in the UK: Introduction 457

21.2 Competition law: Overview 457

21.3 Penalties 458

21.4 The Chapter I prohibition 459

21.5 The Roofing and English Construction cases 462

21.6 The cartel offence 464

21.7 Leniency 465

21.8 The Chapter II prohibition 466

21.9 Summary 467

22 RegulatoryMatters: The Bribery Act 2010 468

22.1 Compliance:The Bribery Act 2010 468

22.2 The Bribery Act 2010: The offences 469

22.3 The Bribery Act 2010: The defence 474

22.4 Facilitation payments 477

22.5 Consequences of offences under the Bribery Act 478

22.6 Prosecution under the Bribery Act 482

22.7 Construction industry risk profile 482

22.8 The SBC, the SBC/DB, the NEC3 and the Bribery Act 484

23 Guarantees and Bonds 486

23.1 Guarantees 486

23.2 Bonds 491

Tables of Cases 497

Table of Statutes 522

Table of Statutory Instruments 529

Table of References 538

Index 547

MacRoberts LLP is a full-service commercial law firm, working from offices in Edinburgh, Glasgow and Dundee. The MacRoberts Construction Group is one of the largest in Scotland, with clients including public sector bodies, private developers, contractors, sub-contractors and professionals in all areas of the construction industry. MacRoberts is recognised as leaders in all aspects of Construction law with specialist lawyers able to provide advice covering the full range of construction law issues, across all parts of the construction process, from advice on appropriate forms of procurement, contract assembly and negotiation through to dispute management and resolution, including mediation, adjudication, arbitration and court.