JCT Contract cancellation- Help

sauravrc

HI - We hired a project management company and signed a JCT contract for building a large extension ending 22nd Feb 2013. The Project management company had initially hired a builder but fell out on cost terms. Now they have been subcontracting work piece meal with no end in sight. Project plans are not provided or a dummy one provided when threatened but not stuck too.

Two questions
- Do i need to provide notice to cancel seeing that they are in breach of contract as the end date has passed

- The contract we initially signed had my architect to be the contract administrator but he later moved away from this location. We have not amended the contract. Would that cause an issue if i go to JCT adjudication.

Thanks in advance

architectming

Do you have a paper trail to document the resignation of your architect and the appointment of the project management company as your Contract Administrator? You do realise the JCT contract you signed is between yourself as the Client and your Builder/Contractor, the Management Company is merely administering the contract on your behalf, can you tell me a bit more about the appointment of these subcontractors? Why it fell out with the original builder?

You do have a right to cancel the contract with 14 days notice, but it is best to understand all your appointments before making that move.

sauravrc

The project management company was the main company who would do the building works through subcontracting another building company. They provided the cost, end date etc for the project. We did not have anything to do with the builders. The project mgmt company were FMB registered too.

When my architect resigned- we verbally informed the project mgmt company that we would be administering the contract directly as the homeowner

Currently we are 2 months past the project end date.

architectming

So you are the Contractor Administrator, which is not a problem. So who is named as the Contractor in the JCT contract? the Management Company or the sub-contractor?

Have you been signing off work to initiate payment? When you say they are 2 months late, am I right to presumed that is the projected Practical Completion date stated in the contract? Are they really really far behind or nearly there?

What I will say is, if there is still a big hole on the ground, obviously you need to terminate the contract, subject to payment for all the work they have done, but if they are nearly there, you may want to have a meeting with them and maybe negotiate a deal between all parties.

Bear in mind this deals with contractual issues, without knowing all the facts, this is merely a suggestions. If you are really unhappy with your contractor and wants to terminate the contract, best to seek legal advice since you took on the role as Contractor Administrator.

sauravrc

Thanks for your inputs.

Yes- I imitate the payments. My issue is that our project started in Sept and was due to end mid-Feb as the practical end date. I have not been told early June not allowing for any slippages. So another 2 months of work potentially. Hence i want them off the site and cancel the contract. Worried that they will damage things and cause issues in the 14 day notice period. I thought that first notice and second notice is only during the contract. Not if they are in breach

keystone

You need to be very careful. It seems that your problem with them is completion date rather than workmanship. At least with this lot you have a drop dead end date of June. If you sack them, pay them off, find another contractor to finish, negotiate, sign, start work you'll be looking at September/October at the earliest. Is there a penalty clause in the contract?

Think carefully about Ming's question you haven't answered. How much have the actually left to do? If its 90 % get rid. If its 10% do a deal and live with it.

Cheers

sauravrc

75% is complete. I have a liquidation clause of £1000/week.

Why would i have to pay them off. They have not provided any plan or inclination to do things quickly. It is like getting the cheapest contractor to do the work. Hence i was expecting the adjudicator to rule in my favour and actually recover money for unfinished works

keystone

sauravrc wrote: »

75% is complete. I have a liquidation clause of £1000/week.

75% is verging on the "not worth getting someone else in" in time or money area. You mean liquidated damages I presume?

Why would i have to pay them off

For the work they have already done and which might require you to engage the services of a quantity surveyor to measure and value at additionbal cost to yourself.

They have not provided any plan or inclination to do things quickly. It is like getting the cheapest contractor to do the work

In other words they seriously underestimated the cost of the job when bidding for it?

Hence i was expecting the adjudicator to rule in my favour and actually recover money for unfinished works

The adjudicator will rule based on the hard evidence placed before him not on supposition or expectation. It all comes down to how well you present your case. I would not expect you to have paid for stuff that hasn't been done yet either.

I'd say do a deal - a tough one mind.

Cheers

architectming

I agreed with keystone, if you are 75% done, it is almost not worth the hassle to terminate a contract. You will not be able to start again for a couple of months, not to mention all the negotiation of warranty with previous work done by the present contractor.

As much as it is a pain to you, I will suggest you should set up a meeting with all parties and agree a timeframe and the consequence of being 4 months behind (financial or otherwise).

teneighty

I would urge caution.

It would appear that you are administering a contract that you do not understand. What form of JCT is it?

Most contracts are drafted to protect both parties, you and the builder. Delayed completion may not be grounds for determination and that could leave you open to a claim from the contractor for loss and expence. I would suggest a £1000/week ascertained and liquidated damages clause is virtually unenforceable, can you quantify that loss?

I would suggest you seek professional advice, probably a quantity surveyor with contract admin experience, before you do anything rash.

architectming

Nicely said teneighty. Either ask your original Architect to help you out or seek help from a QS.

Good Luck!