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Do you have any problems with contracts, disputes with clients or other legal questions you want answered? Our regular legal Q&A can help provide the answers


I have fi tted a large number of emergency light fi ttings and now they are proving defective. Although they work, they are not


performing to specifi cation and my client is asking that they be removed. I’m not getting much joy from the manufacturers even though they accept there are problems.


The Sale of Goods Act governs contracts for the sale of materials as will the law of contract. The fi rst


point to make is that it is the wholesaler who contracted to supply the goods; your contract is with him. The goods must be of ‘satisfactory quality’. Wholesalers’ terms often limit the wholesaler to the cost of replacement, but the contract is always subject to the rigours of the Unfair Contract Terms Act. There must be an expectation that selling goods not ‘fi t for purpose’ will incur outlay over and above the costs of returning the goods and seeking a replacement. The Sale of Goods Act provides for compensation of the sort awarded for breach of contract. As soon as a problem is detected, tell the wholesaler and estimate how many units are likely to be affected. Also, provide a reasoned estimate of loss. It is not enough to say we have 1,000 fi ttings and it is going to cost me £50,000 to replace them. Your claim will need supporting with evidence and substantiation, although the fi rst assessment can be more budgetary.


I fi nished my work on a new build offi ce block and I’m having trouble getting paid. Not only that, they are snagging the works to death.


Is there anything I can do?


If the developer has not managed to let the building, then there is little incentive for them to take


possession and incur the liability for the building and paying retention. This is a vexed


52 ECA Today Winter 2010 Your questions answered:


If you have any legal queries or would like your questions answered in ECA Today, please email us at mail@ecatoday.co.uk. ECA members can receive free advice on commercial contract and legal issues from the ECA Commercial Contract and Legal department by calling 020 7313 4818.


issue, made worse by the number of subcontracts linking payment under the subcontract to the issue of certifi cates under the main contract. This is a situation that is addressed by the revisions to the Construction Act contained in the Local Democracy, Economic Development and Construction Act. Unfortunately, the JCT contracts do not provide a defi nition of when works are practically complete. They resort instead to ‘when in the architect’s opinion practical completion of the works is achieved’. It is for the main contractor to invoke the dispute resolution procedures, get expert


witness to the fact the works are complete, and seek a decision accordingly. A defect is always a defect, and is therefore a breach of contract. There is no duty on the contract administrator or architect to issue a practical completion certifi cate and then undertake a de-snagging inspection on the contractor’s behalf. The only sensible course of action is to instigate a quality management system and address all defects as they arise to counter an overzealous administrator.


I’m looking to expand my business to a new fi eld of planned maintenance. I am going to need some fi nance for some vans – any


ideas where I can get it?


The banks are loath to lend money at the moment, especially to the construction sector. The


government’s response has been to ‘encourage’ banks to review this policy and to introduce several new fi nance schemes. The BIS has recently streamlined their advisory and information support services, which it now provides under their Solutions for Business initiative. Small businesses wishing to access funds could consider using the Enterprise Finance Guarantee scheme, which is intended to support businesses that lack the collateral needed to secure a normal commercial loan. The government provides the lender with a guarantee, for which the borrower pays a premium. Accredited lenders administer the EFG and still make all the decisions on a loan application. The 44 participant banks and fi nance providers are listed on the BIS website (www.bis.gov.uk). You would need to approach the lender referring them to this scheme. The scheme closes at the end of March 2011.


My company completed a subcontract more than two years ago. We cleared all defects to the client’s satisfaction and, in


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