MEMBERS of the North West Roof Training Group met on Wednesday 8 November to gain the advantage by hearing an expert talk on contracts.

Partner at Holmes & Hills Solicitors, Sam Bawden is a construction contract and adjudication expert. He provided a host of top tips, advice and information on what to look out for in contracts at the meeting at the Haydock Mercure Hotel.

Entitled Gaining the Advantage, Sam’s talk explained that reading, writing, negotiating and agreeing contracts can make or break construction businesses – and knowing about contracts can provide a competitive advantage.

As specialist subcontractors, roofing firms can sometimes feel there’s an imbalance of power when trying to match fair contract terms with maintaining long term relationships with main contractor and developer clients on whom they depend for work.

Sam explained that going into a contract with your eyes open and knowing where the risks are can ultimately help to maintain client relationships by avoiding disputes and ensuring project profitability.

Sam Bawden said, “It’s a passion of mine to ensure my clients only sign beneficial contracts. I don’t expect you to know the law, but I think it’s useful to know a few tips and tricks when it comes to negotiating the terms of a contract.”

Gain the Advantage

Firstly, Sam cautioned against starting on site without signing a contract or without really knowing what’s in it. He explained that starting on site implies agreement to the contract by your conduct – even if you haven’t signed.

On a mission to educate subcontractors, Sam described the ‘ping-pong’ back and forth process of negotiating contract terms. He made the point that if a final version of a contract isn’t agreed, then the last version of the contract to exist before starting work will be the version that is treated in law as pertaining to the project.

On the premise that prevention is better than cure, Sam encouraged the roofing contractors in the room to have the confidence to reject or re-write terms where necessary.

The training group members were alerted to clauses that commonly trip up specialist contractors, such as an Order of Precedence which dictates which terms will be prioritised if there’s a dispute. Sam suggested that everyone issues their Ts & Cs with every quote or tender and should insist that they are appended as part of the pre-commencement meeting minutes so that they are high up in the Order.

Another common area of contention Sam described is the payment mechanism set out in the contract. Typical pitfalls are the terms ‘due date’ and ‘final payment’ date. The former is tied to the latter term and means in law that final payment must be made within 17 days of the due date. Sometimes contracts will use different language for these terms, but they will not carry equal weight. Other clauses to watch out for are related to payment application dates, and these might demand different processes for different types of payment applications.

Tips and Tricks

One more important tip Sam mentioned was to make sure you issue cumulative applications for payment. If an invalid payment or pay less notice has been issued one month, keep claiming the cumulative total (minus any interim payments) in subsequent invoices or it might be deemed that you have accepted the lesser payment. In any case, Sam stressed that pay less notices can be challenged and should show how they have been calculated to be legal.

Lastly, Sam encouraged the roofing contractors to seek early advice, as soon as they feel that the project or contract negotiation might not be on course. Sam explained that an apparently straightforward action, such as walking off site if you haven’t been paid, can land you in breach and liable if the contract terms dictate that a notice of suspension should have been issued first.

With an impressive breadth of real-world examples Sam Bowden’s talk was a valuable insight into contracts. The North West Roof Training Group members expressed their gratitude to Sue Wharton for organising the talk and their appreciation of how it will benefit them.

Sam Bawden, can be contacted at Holmes & Hills Solicitors.

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