| Commentary

36 Vesting clauses

| Commentary

36 Vesting clauses

Construction contracts frequently make provision for materials1 to vest in the employer before they are incorporated into the building, with the object of providing security to the employer for money advanced and of enabling the employer to continue easily with the contract in the event of the contractor’s default2. Such provisions may be expressed to operate automatically on the occurrence of a specified event3 or on notice from the employer (for example under a seizure or forfeiture clause4).

A true vesting clause is not a bill of sale, because it operates to transfer full ownership of the materials

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