This article was published in Construction News on 1 December 2016.
Stepping down relevant clauses to subcontractors is rarely quick and easy when done properly – but it’s worth taking the time to do so.
Let’s take a familiar scenario: an employer engages a contractor to carry out works, but the finished works are already subject to agreements for lease between the employer and future tenants of the finished project.
The terms of the agreements for lease are likely to contain duties relating to the performance of the works. Some common examples include:
- practical completion conditions;
- the provision of collateral warranties or third party rights;
- liquidated damages;
- deadlines for practical completion and access prior to completion (e.g. to fit out a retail unit); and
- maximum and minimum area limits which, if not adhered to, allow the tenant to terminate the agreement for lease or entitle the tenant to a reduction in rent and/or liquidated damages.