The Royal Institute of Architects Ireland (the RIAI) has released a 2017 edition of the blue and yellow forms of the RIAI Construction Contract.
The revised contracts incorporate changes required due to the enactment of the Building Control (Amendment) Regulations 2014 (BCAR) and the Construction Contracts Act 2013 (CCA).
The main changes to the contracts are;
Definition of “the Works”
Condition 1(b) expands on the definition of “Works” contained in the Articles of Agreement. It provides that execution and completion of “Works” are deemed to include compliance by the Contractor with the Building Regulations and Building Control Regulations under the Building Control Acts 1990 - 2007 and the Code of Practice for Inspecting and Certifying Buildings and Works published by the Department of Housing, Planning, Community and Local Government.
Amendments to Condition 38, Avoiding and Resolving Disputes
The title of Condition 38 has been changed and is now headed “Avoiding and Resolving Disputes”.
Condition 38 does not expressly refer to adjudication. The RIAI have stated in their practice note that they do not deem it necessary to amend Condition 38 to refer to adjudication, as adjudication is provided for under Section 6 of the CCA, which applies to construction contracts entered into after 25 July 2016.
Conciliation is the first option for dispute resolution under Condition 38 where the dispute is “not resolved by negotiation”. The RIAI have published Conciliation Guidelines and Procedures 2016 (CGP) which sets out the process for Conciliation. A review of the CGP is planned in light of the Mediation Bill 2017.
Condition 38(b) provides that any dispute may be referred to arbitration. This part of the contract has been simplified to reflect changes under the Arbitration Act 2010 and recent case law.
Amendments to address the CCA
One of the main effects of the CCA is to regulate payments in construction contracts. Section 3(1) of the CCA sets out that a construction contract shall provide for the amount of each interim payment and the final payment to be made or for an adequate mechanism for determining those amounts.
Parties to a construction contract may not limit or exclude the application of the CCA. In light of this a number of amendments have been made to incorporate the terms of the CCA which include:
- Statutory Notices under the CCA –. The CCA provides for the delivery of a number of statutory notices including, payment claim notices, notices of suspension of works and notice of intention to refer a payment dispute to adjudication. A new Article 5 has been included, which provides that all notices arising under the CCA will be delivered by registered post. However, Article 5 also provides that where the Contractor issues a payment claim notice under Section 4 of the CCA, this may be delivered by the Contractor to the Architect by email, these provisions are also now reflected in the Appendix to the contract. A footnote has been included to flag that in order to ensure the effectiveness of a Section 4 CCA payment claim notice and as a matter of good practice, such a notice should clearly state that it is a payment claim notice under Section 4 of the CCA.
- Payment Claim Notices – Adequate Mechanism for determining payment claim dates Condition 35(b) now provides that within one calendar month of the actual date of possession of the site and subsequently at the period of interim certificates, the Contractor is entitled on producing a progress statement (which can include a payment claim notice under Section 4 of the CCA) to receive a certificate from the Architect within 5 working days setting out the amount due to the Contractor from the Employer. Once the certificate is presented to the Employer by the Contractor, the Employer must pay the amount due within seven working days. Where the amount certified by the Architect differs from the amount set out by the Contractor in the progress statement, the Contractor is automatically entitled to an explanation from the Architect specifying the reasons for the difference. Under the 2012 edition, the Contractor was not entitled to this explanation unless he/she requested it.
Future of the RIAI Contracts
Construction contracts are becoming more complicated as are the laws that govern them. The RIAI have highlighted in their guidance note that they have tried to keep changes to the contracts as simple as possible and to a minimum pending further work on the next editions of the RIAI contracts.