Sign Kansas Banking Medical History Secure

Industry sign banking kansas medical history secure

okay good morning everyone on this sunny or otherwise depending where you are Wednesday morning this is their new time of 8 o'clock much mr. sharps Cora and this morning we are with John who is talking to us about project community now as always if you could pop your questions into the Q&A facility in the bottom toolbar and then John will address these at the end of his presentation and answer as many questions and queries as possible for you again as usual if any of you want to contact John with specific issues his contact details are presentation or slideshow so without any further ado John I shall hand over to you take it away mr. sharp oh thank you very much Julie good morning ladies and gentlemen I trust you're well not quite sure I like this new start time of 8 o'clock we are project security really contract your relationships and how to get paid as a result of them it's really what this talks about so without further ado there's me all the details in terms of what they're going to have a look at today is the need for security in construction contracts his eyen liabilities standard form contracts key provisions and mechanisms well look at some common problems some issues with third party rights the lateral warranties and then bonds you the need for security in construction projects shortly a contract is as a contract in essence sets out the terms of the business relationship between two parties it carries with it burdens so obligations that a contracting party has to carry out but and this is the good part it will also contain provisions as to how you get paid for your work so who is it in relation to any contract and shortly it is only the parties to the contract it is not Joe glog three livable streets down it has not got any privity and the primitive rule in contract law is fundamental and is explained to the House of Lords in Dunlop pneumatic tires and Selfridge & Co limited it is a fundamental principle of English law it has been established for hundreds of years and the principle is that only a party that is a contract to it to him who is a party to a contract can sue on it now this doctrine obviously protects parties against claims from strangers in most circumstances but there are commonly times when the parties to a contract expressly agree that some other entity is to benefit that's not unusual for example unto the JCT DMV 2016 it is stated that other than such rights of any purchases tenants and or Thunder has take effect Assunta towards its 7a and or 7b nothing in this contract in first or is intended to confer any right to enforce any of its terms on any party who is not a party to it so that's the clause and is giving purchases tenants and thunders some rights under the contract but that's it nobody else can take action under the contract now here are three slides which show you the contractual relationship between various parties to a contract sorry too a construction project here they are the lines link them all together and that's all well and good so you have the employer who clearly has a contract with the contractor who in turn has contracts with his subcontractors and that's all fine mm-hmm but the employer for example does not have a direct relationship with the subcontractors so that he has no rights of action under those contracts only the contractor has rights with the subcontractors and vice-versa now this is all well and good because as I've said in most of these contracts there are burdens that are attached to it so things you have to do in order to make sure that you get paid so on the one hand you've got burdens in the contract things you've seen for not doing them but equally once you've done them you get paid for them all well and good but look at this situation say the employer has set up a special purpose vehicle for this particular construction project so effectively a limited company with few or no assets and say for whatever reason that company goes insolvent so suddenly the employer is now insolvent so the contractual relationships between the first purchaser the design one design to qsca ei fund are all running into difficulty because how are these people going to get themselves paid the employers don't bust so the whole thing though it's lovely and neatly set out there starts to very slowly fall apart and have difficulties there is just another example of sometimes how contracting parties can allow others to have rights under their contract and there's another one as well but the fundamental purpose of these diagrams is to explain that there are direct contractual rights there are sometimes indirect contractual rights as some parties do have some rights under the terms of a contract that they are not a party to which I think you can all see the difficulty if one of these parties suddenly becomes insolvent which regrettably happened a reasonable amount of time before over nineteen but I have a sneaking suspicion it's going to happen a lot more now that we gradually come out a lot so let's have a look at design liabilities it's bear with me one second colleges JCT standard building contract 2016 intermediate contract with design 2016 and minor works with design 2016 are not design and build contracts they are only suitable when the contractor is to be responsible for a discrete element of the design so a tiny bit not the full shebang but some very tiny design element je CT SBC ICD and mwd 2013 in completing the design who works the contractor is not required to take responsibility either for the contents of the employer's requirements or for verifying the accuracy of any design contained in the employers requirements JCT sb sequels 2.13 that's important for everyone to the note JCT s bc IC d @ m WD 2016 well above provision the one I just referred to on the previous slide appears to have been intended to counter the possible indications of a 2002 case between the co-operative Insurance Society limited and Henry boot Scotland Limited where it was held that a contraction required to complete design work was under a duty of care to examine an employer's pre-existing design and to satisfy himself with this research that will produced a complete design that could be built the previous side was seems to have been brought in to an overrule that Henry boot Scotland however unto the JCT under SBC 2016 DB 2016 and ittc 2016 but not mwd 2016 the contractor is obliged to notify any inadequacies in the employers requirements on becoming aware of them and to seek reimbursement by way of a variation to the contract so you realize his something's not right he's got to put it right but he says to the employer look I'm gonna put this right but we're gonna have to bury the contract because for me to put it right is gonna cause that plus it is incumbent on the contractor to ensure the employers design complies with any statutory requirements except in DB 2016 where the ER state they are so compliant so again the contractor finds out the employers design does not comply with the relevant requirement car complete the build without doing so he incurs additional costs he applies to vary there are under the JCT it is open to the employers to delete amend the above provision also a common amendment that employers make a player employers will commonly seek to make a claim of amendment to the referrals and the above provisions to reverse the allocation of risk they need to make the contractor responsible entirely for the design contained in the employers requires this is very common it's often done and care needs to be taken when entering into contracts if the employer wishes to make these amendments this will make the contractor he is required to undertake any design work to the standard expected of an appropriate professional consultant such as an architect or consulting engineer appointed directly by the employer and not undertaking any construction were JTP SBC 2016 contractors design document these are defined in the contract as the drawings details and specifications of materials goods and workmanship and other related documents prepared by or for the contractor in relation to the contractors design portion the contractor is designed submission procedures set out in the schedule one is sets out a submission approval and communication system in relation with the practice design documents this procedure and the employers involvement in it does not affect the contractors liability before design so it's not going to be a defense to say will you the employer you knew all about this no doesn't work the contractor is still liable for standard form contracts key provisions and mechanisms let's have a quick look at these we really we need to look at how the courts will look at or indeed how an adjudicator will look at interpreting provisions of the contract the general principle is that common law a contract will generally be construed as a whole ie all the conditions and all the documents and all the schedules will all be read together when the court or the adjudicate it comes to interpret but no matter how carefully a contract is drafted there is always going to be some ambiguity and it's the courts or the adjudicators job with the use of common law and case law and they have developed certain principles which they apply as an aid to interpretation of a contract so there is a rule of construction that greater weight should be given to conditions that have been specific are of a standard nature quite correct so if you have a standard JCT form contract and that's fine but if you have made specific amendments to it and the court give those greater weight because the courts primary concern at all times is to make sure the contract complies with the intention of the parties at the time that they contracted and if they put a specific clause in there then the courts will give that additional weight now of course that rule is fairly well known to those that draft contracts on a regular basis and very often in the contract itself that rule of construction will be excluded and there will be a clause that says all of the terms of this contract are to be read together and no one Clause should be given any more weight than any other you but Jen will rule then when it comes to looking at documents well handwritten goes over tight written which goes over a standard printed document but the hierarchy of documents including common amendments to standard form so if you have a standard form document that's fine that will be read no problem at all but if you have made handwritten amendments to it so both parties have sat down both made handwritten amendments to a contract both then signed it that will be normally given precedence however and here's a little plea from all construction lawyers of all firms everywhere if you are going to make handwritten amendments to JCT contracts please please please make sure that I can actually read them it's always good if you can read people's handwriting and the number of times that we have seen amendments JCT contract with frankly illegible handwriting will probably mean that if the court can't read it it will be ignored anyway but of course the best way to do it is to tight write your amendments excuse me on to H a CT contract and then it's clear for everyone to see now common problems well we have errors and inadequacy in the contract bills and the CPD there's sometimes conflicts in and between the documents generally and also in in between the documents relating to the Oh things often go wrong so you have two versions of a to two versions of drawing divisions and the wrong version is sign assistant that are good what you need to make sure when you're formulating the contract and getting into site for final signing form is that all these chef chores attachments and drawers referred to are all there so that you have one set of the complete documentation now in circumstance one they're wearing to go to court it's unlikely though it does happen so lightly the plat would be too much of a problem as the parties would both accept look yes this was the wrong joy it should have been this one and that's fine but if they can't agree and there is a real problem the contracts during list does not correspond with the drawings signed yeah that's fine that's enough of course its difficulty again what the construction industry is not particularly good at and this is not in any way criticism because I understand the pressure to get inside etc and get on with work but they're pretty bad at making sure that we get a contract which is first of all signed by all parties secondly has all the correct appendices drawings etc attached to it very often we will get unsigned documents we will get documents with illegible handwriting we'll get no drawings attached to it at all so please as a plea from all construction lawyers would you please make sure that there isn't just one nice contract but we can all look at it saves everyone money in the end I don't then have to Scrabble around looking at case law etc trying to work out find a case that will interpret this contract appropriate there's a failure often to complete the contractual documents as I've just said that half the time they never side they're not dated they've just had someone rights on them and they say well that was our contract well no it's not a date on the contract and it's always very good to sign and then there's a failure to complete formalities and that in particular relates to executing documents by deed to extend the time limit years that's the primary reason my documents are executed by deed but there are formalities you are just signing it has to be witnessed it has to normally feel etc if you don't execute a document correctly and it's supposed to be under deed it won't be it'll just be a standard contract in which case you'll be stuck with the normal six year contract the contracts right of third parties at $19.99 third parties may achieve entitlement to an enforceable benefit with either of two routes provided by section 1 1 of section 1 2 of the contract rights of third parties Act where the contract expressly states that they may enforce a term in their own right we saw that on the very first slides you might give a tenant some rights under a palm tree yeah all where the terms of the contract purport to confer benefits on them provided under Section 1 2 that it cannot be construed on a proper construction that the parties of the contract did not intend the term to be enforceable by others rarely happens but you can see a situation whereby that some party may have just adopted the standard form and forgotten to take out the part that gave people rights well hmm you can face some difficulties there section 1 3 provides that third parties may be identified by name obviously as a member of a class so all subcontractors or by description they need not be in existence equally when the contract was entered into as well that's unusual but not uncommon so you will have perhaps a second tractor creating a special person purpose vehicle for the purposes of this construction project alone it doesn't exist at the time that the contract was entered into but as long as the contract is referred to as a contractor and that will be fun early the parties enforce such prohibition section 105 gives the qualified third party the same remedies as he would be if he were a party to the contract broadly the remedies under a contract are if you do not perform your obligation to your burdens under the contract then you can be sued for not doing so that's all very common and we all understand that equally if you don't get paid and you haven't done the job you are supposed to be under the term contract then you can sue on it and those rights are also third part that qualifying third party will also have same rights in terms of how he goes about it well he doesn't by way of notice between the parties to the contract that rights will be conferred yeah if you are going to give a third party rights under the contract I would very strongly suggest that you limit about third parties right so that he does not have all of the potential remedies under the contract so you may have to for example join a tenant into it but you wouldn't want to give him every last single right under the contract you may wa t him to have a couple of which case specify those set them out clearly in writing so that there is no issues for the courts to interpret cool clearly read that you intended that tenant to have these rights and no more third party rights for purchase and tenants under JCT these rights and limitations are set out in under schedule five part one the contractor is being works to comply with the contract and good practice the contractors liability no rights to take instructions from the first is intense use of contractors design documents professional indemnity insurance come on to that later assignment giving of notices and enforcement of rights okay they are very often there will be a thunder involved in complicated construction projects under the JCT these rights and indeed limitations are set out is scheduled five part one they are they include rights by the contractor as being works to comply with the contract and good practice the contractors liability under the contract no rights to take instructions unless he steps into the place of the employer so the funder may sometimes if a svv special purpose vehicle goes bust the funder might step into the shoes of the employer stepping rights that's the most significant difference so the use of contractors design documents professional indemnity insurance again assignment giving of notices and enforcement you collateral warranties the employer may want the contractor to grant rights to purchases tenants in the Thunder by way of a collateral warranty and the clauses 7 C and 7 D similarly they may want for the same benefices to benefit from the rights granted by subcontractors under Clause 17 7 e the collateral warranty is no more than obligation to enter into a separate agreement upon specified terms this today is the most common and tends to cause the majority of problems so a collateral warranty is normally a separate document while it is triggered within the contract particulars of procurement and delivery of such agreements and lead to difficult processes the promise kill American trapped in the warrant is given as a practical completion so the request can be made up to and following practical completion excuse me most in the industry will understand the difficulty in procurement if the contractor or any other party does not enter into the required warranty and clearly no benefit can be enforced and the most standard forms there are no sanctions in the contract for failure to comply with employers notice so what is the solution well warranties but there are a number of common problems with warranties and we will look at some of them now TPR versus collateral warranties well enforcement these are obtaining them as a reduction of administration and habits including stepping rights for the funder now what we can do about that is we can have bombs which can be based in the show to market or by a bank but you have to be careful whether you have a bond that's conditional or on demand now there are a number of types of bonds there are bid bonds bid bonds guarantees performance at a tender stage so you've tended for a contract and you say you are going to do this this this this and this and this will be the most fabulous construction project the world has ever known and you can put your money where your mouth is and get a big bond which will guarantee your performance I mean what you said you will do at the tender State there are also performance bonds which guarantees performance during the construction period and the dand the defects liability period so you've said in the tender thing that your tender documentation you're going to do this fine during the actual construction progress you get a performance bond which make sure that you do you can get a retention bond which can be provided in lieu of retention there are also things called RPI bonds but they're primarily used by the food sector for food importation etc in case of delay on the vessel and the food goes wrong etc and their HMRC Duty preferment bonds again these are used by buying importers effectively they take out a bond to guarantee that if there isn't he buy ability to HMRC then the bond will pay it's also advanced payment bonds these are provided where goods are ordered but payment is deferred until delivery on-site gang you know a situation where you've ordered the goods you don't get paid until it's delivered to the site but during transit for example all of the goods are destroyed so advance payment bond assists there there's a highways act bond as well that works in relation to public works and section agreements these guarantee roads sua street fighting will be installed to adoption founded so when you built your nice housing estate of by luxury detached properties it will mean than if the row that you put down does not comply we to local forests and and etc then you can have an highways bond to exist there are also wastes operator licenses transplantation based bombs as you can imagine they are specific to the waste industry and there are pension bonds for companies that chupi staff who have a legacy public sector defined benefit pension so that's the bond market let's look at the surety market are certain surest HCC Aviva QBE RSA Zurich Euler arms chopped Liberty Hiscox arg marking on travellers all have a minimum sample rating of a and are capable of providing surety market bonds just one point there the insurance market at the moment is not in a particularly good way there has been a lack of capacity within the insurance market due to Lloyd's of London insisting that underwriters actually now and charge a proper premium for underwriting and contract and that led to a number of insurers pulling out to the market and insurers especially in the construction history are very frightened about the liabilities they would have to pay in relation to a tragic events at Grenfell in addition there has been the aircraft that 737 max which has caused a major market loss and they are all petrified about what the court is going to say in mint you like in relation to their liability for Kovach 19 if they if as most of them put in their policies that notifiable disease would be covered under certain circumstances so due to the hard insurance market the first since 2002 from 2002 only lasted a year or so being triggered by the tragic events of 9/11 and the worst floods in Europe for 250 years there are now fewer insurance providing bombs and in particular they are much more stringent in terms of due diligence so gone are the days where you provided really very basic details she may have done as little as four years ago now they are demanding much more information and not surprisingly with a lack of capacity the cost has increased it's still pretty competitive if they'll get me wrong but it has certainly gone up and in fact is likely to go up more especially here the insurance market is health responders sorry it's forced to pay claims related to Ovid 19 you can also get sureties from banks most of the big banks will do a surety bond however one thing to be aware of these do not please go to the offshore market it is a recipe for disaster there are a number of overseas insurance companies that say they will provide bonds and in the number of overseas banks and also say they will provide bonds the chances realistically of me being able to enforce a a surety if it is placed by an insurance company based in say I don't know Libya is new same with Russia nil so don't go near offshore markets you will not be able to enforce at all and it will leave you considerably out of pocket the attraction with them is that of course they are cheap but they're cheap for a reason because it's very difficult to make them pay in terms of market share approximate well insurance of about thirty percent banks of about sixty five and the offshore is unfortunately for some their accounts for about 5% is that still like it's a bit a case now I think so probably though again I'm slightly nervous about what what's gonna happen in the insurance market given the issues that I just set out so what happens well banks typically require a hundred percent collateral through cash coverage and in addition they will raise a charge to support a bond assure it is start point zero collateral so sureties except that there may be an insolvency risk if a bank issues you with a bond the whirlings are always as is common with just about every bank you ever see is that they can have their money back on demo so certainly during the financial crisis of 2008 9 their banks called in everything because they could because they were all over trial whatever were all on demand and that's what banks do to try and avoid that sureties with a few exceptions for certain types of bond there are conditional bond burnings which you need to clearly draft and probably have reviewed by thanks to some extent have retreated from churches but are still dominant in the UK and Ireland and I suspect at the moment because it's if you like payback time for the banks because we bailed them out two thousand eight nine they will not be retreat in for it retreating further from this at the present time who knows what happened in two or three years sureties normally they'll have stronger credit ratings than the market share is steadily increasing in the UK and the u.s. sureties of ninety percent of the market share and again in until the recent crisis I would have still agreed with that statement but now as I expressed I am concerned about what is the fate of the insurance market going to be after or either they are asked to start paying in relation to Co mid-nineteen bosses so should you have your shorty except your bombs conditional or on demand well conditional contract guarantee bombs follow the underlying contract and are triggered by a breach of the contract including insolvency on demand bank guarantees do not follow the contract and can be triggered on the beneficiary's request it's a certainly for performance bonds avoid this they should be avoided as per the Association of British Insurers and the office of the Deputy Prime Minister so I would always go for surety rather than anything provided by a bank bank documentation is always on demand and that will cause problems Association of British Insurers model bond forms are equi are fair for all parties but you can and negotiate amendments to them but assurity is in my view the best way to solve a number of problems they are not on demand they follow the contract and whilst they might be slightly more expensive they are a much more flexible instrument so what will you need if you want a bond or you'll need the channel company information form you need to fill out application form you have to have a bank information form a bank facility letter a bond wording you only budget and for guest accounts including cash flow forecasts what's your current order bookies and your pipeline of work you'll need obviously audited reports on accounts management accounts and supporting balance sheets and a land and development schedule for developments now that was the information before Cove in nineteen laughter Cove in nineteen I suspect that will have increased whether it's the bond or assurity much more information is going to now be demanded before anyone is going to issue a bond or a surety now you might say John what more can they ask well the answer is probably a great deal I'll start looking into directors personal wealth they'll start looking into the effects the cope in nineteen have had on the business what etcetera so it will be more complicated so that in conclusion ladies and gentlemen it was all that I had to say in terms of the last section I would very much encourage you to go for homes and simply because really anything to do with banks because of their drafting of um demand documentation should really be avoided at all costs Julie that was all I was going to say okay no thank you right we have had one questioning from someone who's had a clause added to six point one five point three on terms that do not require the contractor to discharge any liability before being entitled to recover from the insurers and that would not adversely affect the rights of any person to recover from the insurers under the third parties rights against insurers Act of 2010 he says what does it mean yes that's a good one difficult to answer that question quickly the third the main effect of the third party strikes against insurers Act was if you're asking me now it seems of that a clause is contradicting itself I think it's very poorly drafted but Julie to be fair it may be better the person to email me that question yeah look at that because it's just when you read it out there it doesn't seem to make frankly any sense at all to me and I'm not quite sure what it would mean I could have a stab at it I really don't think me with respect to everybody else listening trying to understand the I interpret it now he's going to really help because frankly I don't think it's an attempt at something but I'm not quite sure what so sorry I can't be more helpful on that extent that I was probably about as useful ISM and ice cream in a sauna but not much I can do about that I'll ask the person concerns and and we'll get that sorted for them directly okay well that appears to be the only questions also you've explained everything else they're pretty very much down that Julie but I've done my best thank you very much all of you for attending this morning and that work whether that's a home or whoever's back John thank you I will wait to share your expertise for this and we will see you all again soon thank you and stay safe thank you everyone