CDM Regulations
As a potential client we are obliged to make you aware of the new Construction, (Design and Management) or CDM Regulations that came into force in April 2015 and what your responsibilities are in your role as client – these are more substantial than those previously expected of domestic clients.
Please ensure you have a read through the summary details on the HSE site confirming the role of all parties – http://www.hse.gov.uk/construction/cdm/2015/domestic-clients.htm to also be fully aware of your duties as a domestic client to ensure all health and safety matters are addressed and the competence of each party are fully satisfactory.
Terms of Agreement
Definitions and general interpretations
1.1 Collaborate means to co-operate with and to provide to or receive from. Other Persons, as and when requested, information necessary for performing work or services and, where the Principal Contractor considers itself competent to do so, to comment of such information.
Construction Acts means the Housing Grants Construction & Regeneration Act 1996 and the Local Democracy Economic Development and Construction Act 2009.
Letter of Appointment means the Letter of Appointment to which these Conditions are annexed.
Project is defined in the Letter of Appointment
Services means the services to be provided by the Principal Contractor in the Schedule of Services, which may be varied by agreement.
1.2 Where under this Agreement an action is required within a specified period of days from a specified date, that period commences immediately after that date. The period includes Saturdays and Sundays but excludes and day that is a public holiday.
1.3 The provisions of this agreement continue to bind the Client and the Company as long as necessary to give effect to their respective rights and obligations.
1.4 This Agreement is subject to the law and the parties submit to the exclusive jurisdiction of the courts of England and Wales
Construction Company Services
2.1 The Company shall exercise reasonable skill, care and diligence in accordance with the normal standards of the Builders profession in performing the Services and discharging all the obligations under this clause 2.
2.2 The Builder shall:
– 2.2.1 perform the services with due regard to the Clients requirements
– 2.2.2 advise on progress in the performance of the services, of any information, decision or action required or of any issue that may materially affect the delivery, the cost or quality of the project
– 2.2.3 (a) act on behalf of the Client in matters set out or implied in this agreement; (b) if acting as contract administrator of a building contract exercise impartial and independent judgement when dealing between the Client and contractor;
Client’s responsibilities
3.1 The Client:
– 3.1.1 shall advise the Principal Contractor of the requirements and of any subsequent changes required;
– 3.1.2 shall provide, free of charge, the information in the Clients possession, or which is reasonably obtainable, and which is necessary for the proper and timely performance of the services and the Contractor shall be entitled to rely on such information;
– 3.1.3 shall give decisions and approvals necessary for the performance of the Services;
– 3.1.4 may issue reasonable instructions to the Principal Contractor
3.2 The Client shall:
– 3.2.1 appoint or otherwise engage any Other Person required to perform work or services under separate agreement and shall require them to collaborate with the Contractor;
– 3.2.2 hold the contractor or contractors for the proper carrying out and completion of construction works
– 3.2.3 not deal with the contractor or contractors directly or interfere with the Principal Contractor Duties or actions under the building contract.
3.3 The Client acknowledges that the Principal Contractor does not warrant for external Contractors outside of PC Scope:
– 3.3.1 that planning permission and other approvals from third parties will be granted at all or. If granted, will be granted in accordance with any anticipated time-scale;
– 3.3.2compliance with any program and/or target cost for building work, which may need to be reviewed for, but not limited to:
(a) variations requested by the Client:
(b) variation in market prices;
(c) delays caused by any Other Persons or any other factors beyond the control of the Principal Contractor;
(d) the discovery at any time of previously unknown conditions
– 3.3.3 the competence, performance, work, services, products or solvency of any Other Persons.
Assignment
4.1 Neither the Principal Contractor nor the Client shall at any time assign the benefit of this Agreement or any rights arising under it without prior written consent of the other, which consent shall not be unreasonably withheld or delayed.
4.2 The Principal Contractor shall not sub-contract performance of any part of the services without the prior consent of the Client, which consent shall not be unreasonably withheld or delayed
Fees and Expenses
5.1 The fees for performance of services and/or any additional services shall be calculated in accordance with this clause and as specified in the Letter of Appointment.
5.2 The Basic Fee for performance of Services shall be:
– 5.2.1 the specified percentage applied to the actual cost of building work; or
– 5.2.2 the separate percentages specified for each work stage applied to the approved cost of the building work at the end of the previous stage; or
– 5.2.3 the specified fixed lump sum or sums; or
– 5.2.4 time charges ascertained by multiplying the time reasonably spent in the performance of the Services by the specified hourly (£70+VAT /hr) or daily rate for the relevant personnel. Time ‘reasonably spent” includes the time spent in connection with performance of the Services in travelling from and returning to the Principal Contractors office; or
– 5.2.5 any combination of these; and/or
– 5.2.6 any other agreed method.
Where a percentage fee applies and until the actual cost of building work is known, the percentages are applied to the current approved estimate of the building works or the contract sum. The cost shall exclude VAT, fees and any claims made by or against the contractor or contractors
5.3 Lump sums, rates for time charges, mileage and printing shall be revised every 12 months in accordance with changes in the Consumer Price Index. Each 12-month period commences on the anniversary of the date on which the Principal Contractor commenced performance of the Services.
5.4 The Basic Fee shall be adjusted:
– 5.4.1 including due allowance for any loss and/or expense, if material changes are made to the Brief and/or the latest approved estimate of the cost of the building works and/or the Services are varied by agreement;
– 5.4.2 where percentage fees in accordance with clauses 5.2.1 or 5.2.2 apply, to compensate for any reduction of the Construction Cost arising solely from the deflationary market conditions not prevailing at the date of this Agreement.
5.5 If the Principal Contractor is involved in extra work or incurs extra expense beyond the Principal Contractor reasonable control. Additional fees shall be calculated on a time basis in accordance with clause 5.2.4 where:
– 5.5.1 the cost of any work, installation or equipment, for which the Principal Contractor performs Services, is not included in the cost for the building work; and/or
– 5.5.2 the Principal contractor is required to vary any item of work commenced or completed or to provide a new design after the Client has authorized development of an approved design; and/or
– 5.5.3 performance of the Services is delayed, disrupted or prolonged.
The Principal Contractor shall inform the Client on becoming aware that this clause 5.5 will apply. This clause
5.5 shall not apply to the extent that any change or extra work or expense arises from a breach of this Agreement by the Principal Contractor
5.6 The Client shall reimburse the Client for expenses in the manner specified in the Letter of Appointment.
5.7 The PC shall maintain records of time spent on Services performed on a time basis and for any expenses and disbursements to be reimbursed at net cost. The PC shall make such records available to the Client on reasonable request.
Payment notices
5.8 The Principal Contractor shall issue payment notices at the intervals specified in the Letter of Appointment
Each notice shall comprise the Principal Contractor account setting out any accrued instalments of the fee and other amounts due, less any amounts previously paid and stating the basis of calculation of the amount specified, which shall be ‘the notified sum’. The payment due date shall be the date of the PC Payment Notice. Instalments of fees shall be calculated on the PC reasonable estimate of the percentage of completion of the Services or stages or other services or any other specified method.
The Client shall pay the notified sum within 14 days of the date of issue of the relevant Notice (which shall be ‘final date for payment’ unless
(a) The PC has become insolvent (as defined in the Construction Acts at any time between the last date on which the Client could have issued the Notice under 5.9 and the final date for payment).
(b) The Client issues a notice under 5.9
Otherwise the amount due and payable shall be the notified sum. The Client shall not delay payment of any undisputed part of the notified sum.
The Principal contractor shall submit the final account for fees and any other amounts due when the PC/Architect reasonably considers the Services have been completed.
Notice of intention to pay less
5.9 If the Client intends to pay less than the notified sum the Client shall give a written notice to the Principal Contractor not later than five days before the final payment specifying the amount that the Client considers to be due on the date the Notice is served, the basis on which that sum is calculated and, if any sum is intended to be withheld, the ground for doing so or, if there is more than one ground, each ground and the amount attributable to it. The Client shall on or before the final date for payment make payment to the Principal Contractor of the amount if any specified in the written notice.
If no such Notice is given the amount due and payable shall be the notified sum stated as due in the Principal Contractor’s account. The Client shall not delay payment of any undisputed part of the account. If the Client issues such a Notice and the matter is referred to an Adjudicator who decides that an additional sum greater than the amount stated in the notice of intention to payless is due, the Client shall pay that sum within seven days of the date of the decision or the date which apart from the Notice would have been the final date for payment.
5.10 The Client shall not withhold any amount due to the Principal Contractor under this Agreement unless the amount has been agreed with the Principal Contractor or has been decided by any tribunal to which the matter is referred as not being due to the Principal Contractor.
All rights of set-off at common law or in equity which the Client would otherwise be entitled to exercise are expressly excluded
5.11 If performance of any or all of the Services and/or obligations is suspended or ended, the Principal Contractor shall be entitled:
– 5.11.1 to payment of any part of the fee and other amounts properly due to the date of the last instalment and a fair and reasonable amount up to the date of termination or suspension, payment of any license fee due under clause 6; together with
– 5.11.2 reimbursement of any loss and/or damages caused to the Principal Contractor by reason of the suspension or the termination, except where the Principal Contractor is in material or persistent breach of the obligations under the Agreement.
5.12 In the event that any amounts are not paid when properly due, the Principal Contractor shall be entitled to simple interest on such amounts until the date that payment is received at 8% per year over the dealing rate of the Bank of England Rate current at the date that payment becomes overdue, together with such cost reasonably incurred by the Principal Contractor (including costs of time spent by principals, employees and advisors) in obtaining payment of any sums due under this Agreement.
5.13 The Client or the Principal Contractor shall pay to the other party who successfully pursues, resists or defends any claim or part of a claim brought by the other:
– 5.13.1 such costs reasonably incurred (including costs of time spent by principles, employees and advisors) where the matter is resolved by negotiation or mediation; or
– 5.13.2 such costs as may be determined by any tribunal to which the matter is referred.
5.14 In addition to the fees and expenses, the Client shall pay any Value Added Tax chargeable on the Principal Contractor fees and expenses.
Copyright Licence
6.1 The Principal Contractor shall own all intellectual property rights including the copyright in the drawings and documents produced in performing the Services and generally asserts the Principal Contractors moral rights to be identified as the author of such work.
No part of any design by the Principal Contractor may be registered by the Client without the written consent of the PC.
Providing that all fees and/or other amounts properly due are paid, the Client shall have a license to copy and use the drawings and documents only for purposes related to construction of the Project or its subsequent use or sale but may not be used for reproduction of the design for any part of any extension of the Project or any other project
Copying or use of the drawings and documents by an Other Person providing services to the Project shall be deemed to be permitted under a sub-licence granted by the Client, whether such drawings and documents were issued by the Client or on the Client’s behalf.
The Principal Contractor shall not be liable for any use of the drawings and documents other than for the purpose for which they were prepared.
Liability and Insurance
7.1 No action or proceedings arising from the failure of the Principal Contractor to keep to this Agreement shall be commenced after the expiry of six years from the date of the last Services performed under this Agreement or, if earlier, practical completion of construction of the Project or such earlier date as prescribed by law.
7.2 In any such action or proceedings
– 7.2.1 the Principal Contractor liability for loss or damage shall not exceed the amount of the Principal Contractor professional indemnity insurance available specified in the Letter of Appointment, providing the Principal Contractor has notified the insurers of the relevant claims as required by the terms of such insurance.
– 7.2.2 No employee of the Principal Contractor or any agent of the Principal Contractor shall be personally liable to the Client for any negligence, default or any other liability whatsoever arising from performance of the Services.
7.3 Without prejudice to the provisions of clause 7.2.1, the liability of the Principal Contractor t shall not exceed such sum as it is just and equitable for the Principal Contractor to pay having regard to the extent of the Principal Contractors’ responsibility for the loss and/or damage in question and on the assumptions that:
– 7.3.1 all other consultants, contractors and other persons providing work or services for the Project have provided the Client contractual undertakings on terms no less onerous than those of the Principal designer under this Agreement;
– 7.3.2 there are no exclusions of or limitations of liability nor joint insurance or co-insurance provisions between the Client and any other persons referred to in this condition; and
– 7.3.3 all the persons referred to in this clause have paid to the Client such sums as it would be just and equitable for them to pay having regard to the extent of their responsibility for that loss and/or damage.
7.4 The Principal Designer shall maintain until at least the expiry of the period specified in clause 7.1 professional indemnity insurance with a limit of indemnity not less than the amount or amounts specified in the Letter of Appointment, provided such insurance continues to be offered on commercially reasonable terms to the Principal Contractor at the time when the insurance is taken out or renewed.
The Principal Contractor, when reasonably requested by the Client, shall produce for inspection a broker’s letter or certificate confirming that such insurance has been obtained and/or is being maintained.
7.5 Except for the rights conferred by clause 7.2, nothing in this Agreement confers or is intended to confer any right to enforce any of its terms on any person who is not a party to it, other than lawful assignees.
Suspension or termination
8.1 The Client may suspend or end performance of any or all of the Services and other obligations by giving at least seven days’ written notice and stating the reason for doing so.
The Principal Contractor may suspend or end performance of any or all of the Services and other obligations by giving at least seven days’ written notice and stating the grounds on which it is intended to do so. Such ground or grounds include, but are not limited to the Client’s failure to any fees or other amounts due by the final date of payment, unless, where applicable, the Client has given effective notice under clause 5.9 of the intention to pay less than the amount stated in an Principal Contractor account.
If the reason for a notice of suspension arises from a default;
-8.1.1 which is remedied, the Principal Contractor shall resume performance of the Services and other obligations within a reasonable period; or
-8.1.2 which is not remedied by the defaulting party the Agreement will end by giving at least seven days’ further written notice.
Where Services are suspended by either party and resumed within three months, the Principal Contractor has the right to treat performance of the Services affected as ended on giving at least seven days’ further written notice to the Client.
Dispute resolution
9.1 In the event of any dispute or difference arising under the Agreement, the parties may attempt to settle the matter by negotiation or as specified in the Letter of Appointment.
Adjudication
9.2 Either party may give notice at any time of the intention to refer a dispute or difference to an adjudicator;
-9.2.1 Referral of the dispute to such adjudicator shall be made within seven days of such notice
-9.2.2 The appointment of the adjudicator shall be made in accordance with the procedures identified in the letter of Appointment
-9.2.3 The parties may agree who shall act as adjudicator or, the adjudicator shall be a person nominated at the request of either party by the nominator specified in the Letter of Appointment.
-9.2.4 The adjudicator may allocate between the parties the costs relating to the adjudication, including the fees and expenses of the adjudicator, in accordance with the provisions of clause5.13
Arbitration
9.3 The provisions for arbitration are:
-9.3.1 Without prejudice to any right of adjudication where in the Letter of Appointment and arbitration agreement is made and either party requires a dispute or difference (except in connection with the enforcement of any decision of an adjudicator) to be referred to arbitration then that party shall serve on the party a notice of arbitration to that effect and the dispute or difference shall be referred to a person to be agreed between the parties or, failing agreement within 14 days of the date on which the notice is served, a person appointed by the appointer specified in the Letter of Appointment on the application of either party.
-9.3.2 Where the law of England and Wales or Northern Ireland is the applicable law;
(a) the Client or the Principal Contractor may litigate any claim for a pecuniary remedy which does not exceed £5,000 or such other sum as is provided by order made under section 91 of the Arbitration Act 1998;
(b) in such arbitration the Construction Industry Model Arbitration Rules (CIMAR) current at the date of the reference shall apply;
(c) the arbitrator shall not have the power referred to in Section 38(3) of the Arbitration Act 1996.
-9.3.3 Where the Law of Scotland is the applicable law such arbitration shall be conducted in accordance with the provisions of the Arbitration (Scotland) Act 2
