Fri 22 Oct 2021

When does the employer have to hand over the site to the contractor and what are the consequences if they do not do so?

Welcome to this 15 week blog series covering delays and extensions of time under construction contracts.

For the purposes of this blog series, where we require to refer to the terms of a contract, unless we state otherwise we will refer to the unamended SBCC Design & Build Contract 2016 ("the Contract"). 

The date on which the contractor is to be given access to the site is essential as it starts the clock ticking on the deadline for completion. The employer may give possession of all or part of a site, depending on whether the contract provides for completion in whole or by sections. The Contract should set out the date for handover to the contractors in the Contract Particulars. The Contract Particulars should also set out the date or period for completion.

Even if the contract does not state that the employer will hand over the site, they must still do so. This is an implied term of the contract as the contractor cannot carry out the works unless they have control of the site. Where an express date for handover is not stated, the site must be handed over within a reasonable time which will allow the works to be completed by any completion date.

The Contract says that upon being given possession of the site, the contractor shall begin the works, proceed with these 'regularly and diligently' and complete them before the relevant completion date. It is therefore essential that the handover date is specified or can be ascertained. 

The Contract allows the employer to defer giving the contractor possession of the site (or any section) for up to six weeks from the date stated in the contract. If the employer fails to give possession of the site in accordance with the contract, this is a breach of contract. This is also a Relevant Event under the Contract which will entitle the contractor to additional time.

In some circumstances the contractor will be entitled to recover loss and expense from the employer where the deferment of possession has materially affected the progress of the works. The employer may also lose the right to claim liquidated damages if they have delayed handing over the site. We will discuss liquidated damages later in this blog series. Next week we will look in more detail at Relevant Events.

Should you require assistance with any aspect of a construction contract, we have a large and experienced construction team who would be happy to discuss this with you.

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