Commentary

37 Insolvency of the contractor

BUILDING AND ENGINEERING vol 5
| Commentary

37 Insolvency of the contractor

| Commentary

37 Insolvency of the contractor

A contract term which purports to transfer property in materials to the employer, or to empower the employer to seize and use them, in the event of the contractor’s insolvency, is void against the contractor’s trustee in bankruptcy or liquidator1. However, a clause which vests property in the employer before the contractor’s insolvency is valid, even if the employer only seizes the property after the insolvency2. Moreover, a right of seizure on grounds independent of the contractor’s insolvency may be validly exercised after that event, because the employer’s right dates from

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