On 25 July 2016, the provisions of the Construction Contracts Act 2013 (the “Act”) became operative in Ireland. The Act applies to certain construction contracts entered into after that date and introduces provisions in respect of payment, suspension and statutory adjudication.
A number of construction activities are not caught by the provisions of the Act, such as work which holds a value of less than €10,000.00 and certain works relating to private dwellings.
The Act also excludes from its remit contracts for the manufacture or delivery of components for systems of power supply to a construction site provided that the contract does not also provide for the installation of such components.
A similar exclusion is included in the UK’s equivalent legislation called the Housing Grants and Construction Regeneration Act 1996 (as amended) (the “Housing Grants Act”). However, the Housing Grants Act goes one step further than the Act and it contains an additional carve-out with respect to contracts for the installation of plant or machinery on a site where the primary activity is power generation.
A similar carve-out was not included in the Act. As a result, turbine supply agreements that require a contractor to install and not just deliver the turbines’ components will be caught by section 1(4) of the Act. The provisions of the Act will apply to turbine supply agreements entered into from 26 July 2016 irrespective of whether the parties to the agreement attempt to limit or exclude its application.
There are a number of amendments that can be made to a turbine supply agreement (or other construction contracts caught by the provisions of the Act) in order to align it with the requirements of the Act. If you wish to discuss these amendments, or the Act generally, with us please feel free to contact a member of our Energy and Construction team on the details below.