CONTRACT OF AGREEMENT

One of the most important documents that should be discussed with any builder or contractor is the contract of agreement. Whether it is a formal contract or one which has been mutually agreed upon, it may become a vital document in the event of any financial or contractual discrepancies.

Some contractors may ask you to enter into a contract with them, which would generally indicate a professional set-up. However, the domestic sector does not usually work with such safeguards.

The advantage of entering into a contract – especially when large sums of money are involved – is that you have a legal document which relates to the written quote from the contractor.

What the contract should cover

The contract should include the terms of payment and any bonus/incentive clause as discussed in Chapter 7. However, as clearly spelled out, these types of arrangement can only work when there are no changes to the specification, and when there are sufficient information and drawings to minimise any additional work or changes.

Included in this guidebook is a sample contract of agreement, which will give you an idea of what you need to cover. Alternatively, there are ‘off-the-shelf’ contracts available such as the JCT (Joint Contracts Tribunal) Building Contract for a home owner/occupier, as detailed below.

Financial agreements

Always have any financial agreement confirmed in writing, no matter how small the amount. It is the first thing that any legal representative will ask you for in the case of any form of dispute.

Formal contracts

A formal contract of agreement is meant to protect the interests of both parties, so if the contractor refuses to enter into such an agreement it may be best to choose one who does.

Formal contracts do not have to be sanctioned by a solicitor, but it is advisable to have a third party witness the agreement.

‘Off-the-shelf’ contracts

Alternatively, ‘off-the-shelf’ contracts are available such as the JCT (Joint Contracts Tribunal) Building Contract for a home owner/occupier which covers the areas outlined in Figure 6.1.

The type of contract shown in Figure 6.1 would normally be used in a situation which involves larger amounts of money but it is down to the discretion of the individual whether or not this contract is used.

In any case it is worthwhile obtaining a copy of the JCT contract so that you understand the responsibilities placed upon both the builder/contractor and yourself.

Writing your own contract

You may decide to write your own contract but I do advise you to seek legal advice if you are in any doubt.

METHOD STATEMENT

What is a method statement?

This is not a document that the general public will necessarily be familiar with, and in fact most domestic builders will not have been required to produce one.

A method statement is a descriptive account of the way in which a particular operation will be carried out, for example what precautions the builder will be taking to ensure the security of your property, and how he will ensure the safety of all the people involved in the project.

Requesting a method statement

It is not unreasonable for you to request a method statement, for example, for any work that may cause a

security risk or safety issue, or where the sequence of work is important to minimise inconvenience.

A contractor may put up resistance to providing method statements. However, he only needs to discuss these elements with you, although the discussion should be recorded.

You may also be required to produce the information for your insurance company.

Example of a method statement

Figure 6.2 provides an example of the type of information that would be covered in a method statement: details of the work or works, the location of the work or works, the plant to be used, the method to be adopted for each element of the works, and where and how precautions will be taken.

Other documentation

Further information associated with the method statement may also be issued, such as a short-term bar chart showing, for example, how long certain areas will be out of action (see Figure 6.3). This shows how such documents can assist in the smooth running of the work, as they enable you to make allowances and change any arrangements that may be affected by it.

Such short-term bar charts are easy to prepare and do not need to be produced by computer. However, they are much more practical when they are computer-generated as the formatted documents can be used in several useful ways.

INSPECTION PROCEDURE

It is very important to establish a procedure for inspecting all works on a regular basis. Ensure that you inform the contractor in writing of anything that is giving you cause for concern. For example, short-term bar charts can be used to highlight areas of high activity and when there will be factors which affect incoming services such as electricity and gas. These charts can also be used to update the main timescale programme. By leaving spare lines, any additional or extra work can also be inserted.

It would not be unreasonable to ask the builder/contractor to accompany you on these inspections as it is much easier to explain your dissatisfaction with or indeed your approval of the work as it proceeds. This will also give the builder/contractor the opportunity to give explanations. For example, it may be that the work is not ready to be offered as complete.

It is always advisable to inspect the works as items progress or as they are completed. Not only will this

give the contractor the impression that you are taking an active interest in the quality of the work, but it will also provide an opportunity to discuss and correct items before it is too late.

Problems with subcontractors

Builders and contractors rely on subcontractors and sometimes have difficulty in getting them on site when required, particularly in boom times. Let the main contractor’s staff know if there is a problem before they leave the site, as it may be difficult to get the subcontractor back to rectify any defects once they have started another contract elsewhere.

Always put your concerns in writing and remember to inform the main contractor as the first point of contact.

Although we have stated that a contract of agreement should be in place together with any financial agreement, if there are ever serious concerns or disputes, it is always advisable to try and sort out any problems amicably before having to implement any contractual/legal obligations.

SITE SET-UP

This is an area that needs some discussion before the builder/contractor starts on your project, as facilities such as a canteen, toilet and office may be on site from start to finish. Some site facilities may need to be dropped into position by crane, depending on the size of the project.

There is a number of issues relevant to your project that you may need to clarify. It is worth making a list of those that you can think of. A sample site consideration checklist of some of the many issues that can form part of one single project is included in Figure 6.4.

As you can see from Figure 6.4, there are issues that need to be discussed prior to the project starting as they have the potential to create difficulties between the client and the builder/contractor.

Getting through the red tape

There are some elements that the builder/contractor may be better equipped to deal with. For example, they may have connections within some organisations/service providers who can speed up some of the red tape that can slow the project down.

Most of these types of issue will require you to make extra payments that would not normally be included in the contractor’s quote, such as payment for crossovers from the road or the cost of increasing the size of electricity intake cables or water feeds if required.

While most incoming domestic service supplies will normally be adequate to take the extra loading, it is worth keeping in mind that additional costs may occur if heavier loading is necessary.

Site instruction for additional work

When you do have to instruct the builder/contractor to carry out additional work, it is worth using a preformatted sheet such as the site instruction form illustrated in Figure 9.1. This includes particular information such as dates, a description of the work and sketches where possible. This will help to avoid misunderstandings and can include approximate costs and timing.