Most Read Contributor in New Zealand, February 2017
From 1 September 2016 the Construction Contracts Act will extend
to new categories of construction professionals. This article
provides information as to the changes and how they might affect
The Construction Contracts Act was changed significantly in 2015
but some of the reforms were staggered to come into effect over
2016 and 2017.
Previously, the Act generally only applied to physical
construction work, however from 1 September 2016 design,
engineering and quantity surveying will now fall within the
definition of "construction work" under the Act.
This is significant as designers, engineers and quantity
surveyors will now be subject to the provisions of the Act,
including the prohibition on conditional payment provisions, the
payment claim/payment schedule regime, and the fast track dispute
resolution process, known as adjudication.
So what does this mean for you?
If you are a designer, engineer or quantity surveyor (or are
contracting with these sorts of consultants) then it is critical
that you are familiar with the payment provisions in the
Construction Contracts Act, including the implications of the
payment claim/payment schedule regime.
It is also important that your terms of engagement are updated
to reflect the application of the Act.
If a dispute arises on a project then the adjudication process
will be available to resolve the issues. Given the fast track
nature of adjudication, it is important to be familiar with its
operation and how it can be used effectively.
The sorts of matters that could be subject to adjudication
include allegations of breaches of contract or disputes about
whether a consultant has exercised all due care and skill, which
can be very complex. We would therefore recommend seeking advice at
an early stage if a dispute appears likely.
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.
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