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With construction methods evolving and moving away from the tradition of projects being constructed entirely (or largely) on site, what additional risks do the parties need to consider and how can these be conquered?
One of the biggest risks is the fact that a modular build will usually mean that an Employer is spending 75% (or more) of the contract’s value without actually having much work carried out on site beyond the normal early site preparation and foundations. The products of this spending are usually sitting in a third party’s factory or storage and herein lies the risk. What happens if the Contractor, or if applicable the Sub-contractor, goes insolvent or a dispute arises? The best way of protecting the Employer, or indeed the Contractor in the lower tier relationship, is through the use of appropriately worded documents.
Amongst these documents are vesting agreements, or vesting certificates as they are also called, which contain specific clauses dealing with the transfer of ownership upon payment i.e. before delivery to site, and the storage and identification of a party’s assembled products prior to delivery to site.
If you would like to know more about modern methods of construction, please book you place on our webinar here.
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