The old saying goes if it looks like a duck, swims like a duck and quacks like a duck, it’s probably a duck.
Unfortunately, when it comes to contraction contracts, sometimes it turns out to be a turkey.
The Housing Grants, Construction and Regeneration Act 1996 (as amended) defines what a construction contract is. The problem with that definition is not with what it says is a construction contract, but with what it says isn’t one – because certain types of contract that at first glance might appear to be a ‘construction contract’ are excluded. One of those exclusions applies to contracts of supply where there is no element of installation.
Why is this important? Only those contracts that meet the 1996 Act’s definition fall under the mandatory adjudication provisions contained in the 1996 Act.
The English courts recently considered whether this ‘supply only’ exclusion applied in relation to the supply of concrete to site. In this case the concrete supplier had (as is standard in the industry) not only delivered the concrete but had, having arrived at site, also poured it in place. The parties were in dispute as to whether the concrete was defective. The question the court had to resolve was “by pouring the concrete, did the supplier ‘install’ it?” If the answer was “yes” then the adjudication provisions in the 1996 Act applied to the dispute between the parties.
The court found that pouring concrete amounted to the same thing as delivering it. It was not the same as installing it which requires doing something extra to or with the concrete once poured. Thus it was an excluded ’supply only’ contract and the 1996 Act’s adjudication provisions did not apply.
To those in the industry this should come as no great surprise – it reflects the contractual norm as ‘supply only’ contracts will often not contain adjudication provisions. But there’s no reason it should be that way. While there can be some fine distinctions, suppliers can, if they wish, take advantage of the benefits adjudication provides for effectively and quickly resolving disputes, by agreeing binding provisions in their contracts.