Ideally, the issuance of a completion certificate after the culmination of a construction contract triggers some issues (Ndekugri and Rycroft, 2009). Firstly, it is the beginning of the Rectification Period. Secondly, the certificate marks the end of the contractor’s obligation to insure against damage or their liability for liquidated damages in the event of late completion. Consequently, it marks the start of the six months period within which the contractor should supply the Quantity surveyor or Architect with necessary documentation.
A defect liability is a duration within, which after a project is completed the contractor is obligated to go back to the site and correct defects (Gaur and Panigrahi, 2015). Practically, there are two types of defects. A latent defect, which is a fault that cannot be easily identified by a reasonable inspection, and a patent defect that is obvious and can be detected by a reasonable inspection.
Types of Risks Encountered by the Employer and Contractor
Virtually, construction work involves risks related to health and safety, which apply to both the employer and the contractor. For instance, as Ndekugri and Rycroft (2009) note, the risk of injury or death on passersby is highly possible in an ongoing construction work. In this case, the contractor is liable and has a responsibility to indemnify the employer against the risk of personal injury or death from the works. Secondly, the contractor is liable for loss or damage to property as identified in the contractor and employer’s agreement. Thirdly, as the construction work is ongoing, there is a risk of causing damage to the properties around apart from the work itself as well as the interference with rights associated ownership of such properties. Importantly noted, while a particular risk can be associated with one of the parties, it does not mean that they caused it or they are to be blamed for its occurrence. In fact, in some cases, both the employer and the contractor may be blameless, but still, have to bear the consequences. Consequently, in construction contracts, the risk is often transferred to the employer and if the contractor incurs a liability due to an occurrence of a risk, then the employer must compensate the contractor.
Gaur, M., and Panigrahi, A. (2015). Contracts & Accounts (WBSCTE). New Delhi: Vikas Publishing House Pvt Ltd.
Ndekugri, I., and Rycroft, M. (2009). JCT 05 standard building contract. [Place of Publication unidentified], Elsevier.
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