Numerous agreements are entered into throughout an
Infrastructure Ontario project. This blog provides a brief overview
of different types of agreements you may see.
The Project Agreement is the primary document governing
completion of the project by the project company. Attached to the
Project Agreement as schedules are a number of other documents
relating to the project and its completion. The project agreement
and its schedules effectively provide the "blueprint" for
completion of the project. The following are some of the important
agreements that are attached as schedules to the project
A Construction Contract is the agreement between the project
company and the contractor regarding how construction will be
completed. It usually incorporates by reference many of the terms
of the Project Agreement. The Construction Contract will also deal
with additional matters such as payments and application for
The Lender's Direct Agreement
The Lender's Direct Agreement is a contract between
Infrastructure Ontario, the lender and the project company which
establishes the contractual relationship between the lender and
Infrastructure Ontario. This Agreement deals with the lender's
right to take security over the project company's interest in
specific contracts, enforcement of that security by the lender and
notification of same to Infrastructure Ontario, what constitutes an
"event of default" and the lender's right to
"step in" in the event of default, the remedies available
to the lender including the right to enter into a replacement
Construction Contract with a replacement contractor, and the
requirement for Infrastructure Ontario to pay the substantial
completion payment directly to the lender.
Assignable Agreement for Construction Contract
This Agreement is an Agreement between the project company, the
contractor and Infrastructure Ontario. It assigns the project
company's interest in the Construction Contract to
Infrastructure Ontario as security for the obligations of the
project company to Infrastructure Ontario in the Project Agreement.
This Agreement provides that if there is a default, Infrastructure
Ontario can step in and compel the contractor to complete the work
in accordance with the Construction Contract.
Assignable Subcontract Agreements
These Agreements are agreements between the project company,
Infrastructure Ontario, the contractor and a subcontractor. It is
expected that each subcontractor will sign a separate Assignable
Subcontract Agreement. These agreements assign to Infrastructure
Ontario all rights of the contractor so that in the event of a
default, Infrastructure Ontario can compel the subcontractor to
continue to perform.
Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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