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[ Questions answered: Legal advice ]

accordance with JCT rules, the defects liability period ran out last November. The main contractor agreed his final account with the employer without any retention. However, under the terms of our subcontract, retention was held for 12 months, in the usual way. The main contractor has yet to receive the certificate of Making Good Defects, but he has no incentive to obtain it as this will then require him to pay our retention. Can the main contractor withhold our retention indefinitely?

The JCT contract says the architect ‘shall issue a certificate” stating that, in his opinion, all defects

have been made good. Failure to do so is not only a breach of contract with the employer, it also falls short of the professional conduct that is expected of him as a registered architect. You must read your agreement; this will

clarify how long the main contractor can withhold your retention. Pay when certified has yet to be outlawed. We suggest you write to the contractor, possibly using one of the ECA model letters, stating that failure to identify when retention is finally due infringes the Construction Act, and that you will seek a decision that the Scheme for Construction Contracts applies and, therefore, payment is now due. Ensure you have invoiced the agreed amount before embarking on such a course.

My contract states, before I am entitled to make a claim, I must first have notified the contractor of the circumstances relating to the

event. And that this notification must happen within seven days of me potentially becoming aware of it. Now he is refusing to even consider my application. Can he just ignore it?

Condition precedent clauses often state that before an entitlement is achieved, some other term or stipulation must have been met. These terms can be onerous. Where the hurdles are unreasonable, in either time to perform or extent of the foresightedness required, then the courts are unlikely to enforce them. In a similar set of circumstances, a court ruled that a two-month period was reasonable. The clauses are becoming more commonplace and are intended to trap the unwary, so the advice is, list an order’s condition precedent clauses and abide by the rules of the agreement.

Bribery and construction

With work, or lack of it, being what it is, we thought of going around all our local contractors giving cases of whiskey – we could call it ‘Whiskey for Work’. These gifts would be above board, what do you think?

Attractive as it sounds, we would advise against it. The Bribery Act 2010 comes into force in April 2011, and the advice coming from government is to start the change in culture now. The act compels businesses to become self-policing. The

only mountable defence, against a bribery claim, is to show the business has satisfactory procedures in place to prevent bribery occurring. A bribe is something that is intended to induce improper performance in the recipient. At what level a gift or hospitality is construed to be a bribe is the subject of industry concern. If the whiskey is intended for a named individual, then there is a risk the gift will be seen as an inducement. If the gift disappears into a large organisation, for later redistribution or charitable donation, then proving a case may be difficult. It is all a question of degree. The act is intended to create a culture change where, rather than paying a bribe, in either the UK or abroad, the organisation foregoes the business opportunity.

Winter 2010 ECA Today 53

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