UK: UK Construction Contracts Round-up - December 2018

Last Updated: 11 December 2018
Article by Mark Macaulay, Jane Miles, Shaun Tame and Tracey Summerell

New and updated standard form contracts

A number of the contracts bodies have issued new / new editions of contracts.

  • The NEC has published a free practice note explaining "how the NEC4 suite of contracts can be used to support the use of offsite modular construction". Noting how this method of construction can increase efficiency and cut costs, the guidance highlights the importance of the client starting with a procurement and contract strategy and engaging its supply chain. It explains how the NEC4 suite has a variety of contracts to suit a range of project needs and covers single point responsibility for onsite and offsite construction, design, quality, multiparty contracts, payment, title and information modelling. Click here to access the guidance.
  • The Crown Commercial Service has also been working with the Infrastructure and Procurement Authority and BuildUK to produce a set of standard "boilerplate" amendments for use on UK public-sector NEC contracts. The aim is to improve public sector client contract management and risk transfer behaviours with BuildUK's promotion of fair contract terms. (Source: NEC news)
  • The Royal Institute of British Architects (RIBA) has published 2018 editions of its Professional Services Contracts and Building Contracts. Click here to view the full suite of 2018 RIBA Professional Services Contracts.
  • The Association for Consultancy and Engineering (ACE) and the Civil Engineering Contractors' Association (CECA) have issued new versions of the Infrastructure Conditions of Contract (ICC) as follows: the ICC Design and Construct Version, June 2018 (which revises the 2011 Design and Construct Version); the ICC Target Cost Version, June 2018; and the ICC Target Cost Version Guidance Notes, June 2018. New Guidance Notes have also been published to help with contract preparation and administration.
  • The Construction Industry Council (CIC) has published a new suite of standard form collateral warranties, along with a new "ab initio" novation agreement. (Source: CIC news)

Payment issues

Progress of the Construction (Retention Deposit Schemes) Bill has been further delayed. Introduced into Parliament by MP Peter Aldous in January 2018, it was scheduled to receive its second reading in the House of Commons on 23 November 2018, but has been postponed again – to 25 January 2018.

For the background to the bill, click here: " Aldous Bill" sets out proposed new legislation to protect retentions".

Contract law: case reviews

The courts have dealt with a number of interesting issues in the last few months. Click on the links below to read our case reviews on the following:

Court of Appeal ruling: the prevention principle cannot override expressly agreed terms

The Court of Appeal (CA) has confirmed that parties to a construction contract may allocate the risk of concurrent delay contractually without being in contravention of the common law doctrine of prevention.

The CA's decision (in North Midland Building Limited v. Cyden Homes Limited [2018] EWCA Civ 1744) upheld Mr Justice Fraser's Technology and Construction Court (TCC) decision (which we reviewed in 2017: " Contracting parties can agree up front who will take the risk of concurrent delay").

In summary:

  • The parties agreed a contractual term in their building contract which stated that in the event of a concurrent delay then the delay event for which the contractor was not responsible did not cancel out the effects of the delay event for which it was responsible. This reversed a usual and common law position.
  • The term "concurrent delay" is used to describe the situation where delay to the contract completion date is caused by two or more different events of equal causative potency, one of the two events being the responsibility of the employer and the other the contractor's (the John Marrin QC definition).
  • There is no rule of law or statutory restriction which stops the parties agreeing on how to deal with concurrent delay. (The decision in Multiplex v. Honeywell (which set out propositions for the prevention doctrine) and the doctrine of prevention were simply not relevant.)
  • Contracting parties are free to agree whatever terms they wish to agree. There is no rule of law that prevents the parties from agreeing that concurrent delay be dealt with in any particular way.
  • Parties might now consider more carefully the degree to which each party undertakes responsibility for concurrent delay. Contract drafting might become more complex and parties will need to take care that their drafting is clear and unambiguous. Employers should note that contractors will be more reluctant to accept clauses under which they accept the risk of concurrent delays.

Guidance on economic torts

In Palmer Birch (A Partnership) v. Lloyd [2018] EWHC 2316 (TCC), the TCC found two individuals directing the affairs of a building contractor to be liable for the economic tort of unlawful means conspiracy. They had colluded in causing the liquidation of the building contractor to avoid it having to meet its duties under the building contract, including payment obligations. Economic torts are hard to establish and this decision provides useful guidance on three torts: inducing a breach of contract, unlawful interference and unlawful means conspiracy.

Cavendish v. Makdessi applied

GPP Big Field LLP and another v. Solar EPC Solutions SL (formerly known as Prosolia Siglio XXI) [2018] EWHC 2866 (Comm), involved claims for damages (both liquidated and unliquidated) for late and/or non-completion of the works required under four engineering, procurement and construction (EPC) contracts. The court dismissed arguments that the liquidated damages provision amounted to a penalty and was therefore unenforceable. In reaching that conclusion, the court applied the test in Cavendish Square Holding BV v. El Makdessi and ParkingEye Ltd v. Beavis was referenced (and the summary of that case in ZCCM Investments Holdings plc v. Konkola Copper Mines plc).

We explained the issues in Cavendish in our article: The Supreme Court has reformulated the rule against penalties.

How good is your guarantor? A reminder of the distinction between a guarantee and an indemnity

Our dispute resolution colleagues recently reviewed the decision in Catalyst Business Finance v. Very Tangy Television Limited, Richard Tuckwell, Very Tangy Media Limited [2018] EWHC 1669 (QB) which provides a useful reminder of the differences between a true indemnity and a true guarantee. Click here to read their report: How good is your guarantor? A reminder of the distinction between a guarantee and an indemnity.

Electronic execution of documents: Law Commission consultation

"Electronic signatures can be used to sign formal legal contracts under English Law," announced the Law Commission when publishing its conclusions into this topic back in August 2018. The consultation into its conclusions, which finishes at the end of November 2018, focused on two aspects of the electronic execution of documents: the use of electronic signatures to execute documents where there is a statutory requirement that a document must be "signed"; and the electronic execution of deeds, including the requirements of witnessing and attestation and delivery.

The Law Commission's aims were to make it easier to execute documents electronically and to allow businesses to "speed up transactions by going fully digital". Its suggestions for reform include provision for e-signatures to be witnessed via webcam or video link and for a working group to delve deeper into the ongoing practical issues that e-signatures create.

A separate project to investigate whether the concept of "deeds" and the long-standing formalities deeds demand remain suitable for our age.

Obligations to discuss contract-related changes in good faith

Lord Justice Leggatt discusses the flexibility of English contracts law and poses a challenge for lawyers.

In October 2018, Lord Justice Leggatt spoke about the adaptability of English contract law at the Jill Poole Memorial Lecture at Aston University. With the significant increase in businesses contracting with diverse, international parties, his speech focused on the theme of "keeping commercial law up to date in times of rapid change". Those who enter into longer-term contracts, where relationships have to adapt in order to benefit over the contract period, will find Leggatt LJ's views interesting. He focused on clauses that require the parties to negotiate "in good faith" if circumstances change – and concluded that these clauses will become more common in future.

Leggatt LJ discussed the effect of a requirement to meet to discuss, in good faith, the effect of changed circumstances and what such a clause required the parties to do. Such a provision is historically, and, arguably, still, unenforceable in English law. Either the parties did not intend it to have the force of law or it is too uncertain to be enforceable. The judge reviewed the line of case law starting with Courtney & Fairbairn (that the court will not recognise an agreement to negotiate) as confirmed by the House of Lords in Walford v. Miles (that an agreement to negotiate or to negotiate in good faith, has "no legal content"). Noting that Walford had not been overruled, the judge pointed out that the law has, nevertheless not stood still in the 20 years since that decision. Indeed, developments suggest "there is no reason why the concept of good faith should cause difficulty for English lawyers".

Commenting that the common law doctrine of precedent can act as an obstruction, he nevertheless was of the view that "through the ability to reinterpret and occasionally to depart from past decisions, the common law has the flexibility to overcome or work its way around an obstacle to its development, even where ... the obstacle is a decision [Walford] at the highest level [the House of Lords]. Leggatt LJ called on practitioners "to present the arguments clearly and effectively and sometimes to raise innovative points" and for legal scholars to show judges how the law can be made more coherent".

(Click here for the speech: "Negotiation in Good Faith: Adapting to Changing Circumstances in Contracts and English Contract Law, 19 October 2018.)

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions