This Checklist should be read in conjunction with Practice Note: Arbitration and the Contracts (Rights of Third Parties) Act 1999. It lists points to think about when considering whether arbitration agreements in contracts also bind the third party under the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999): • does the contract in question exclude C(RTP)A? Many contracts exclude C(RTP)A 1999 • is the contract governed by English law? If it is not governed by English law, then C(RTP)A 1999 may not apply to the contract • if the contract is not governed by English law, but the arbitration agreement is, then C(RTP)A 1999 might still apply to the arbitration agreement (see eg AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC) • check the date of the contract. The C(RTP)A 1999 does not apply to contracts entered into before 11 May 2000 (C(RTP)A 1999, s 10(2) and Mulchrone v Swiss Life (UK) plc • does

Consultant appointments and the HGCRA 1996 ‘Construction contracts’ as defined in the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) are subject to the provisions of Part II of the HGCRA 1996 (subject to some exceptions). See Practice Note: Introduction to the HGCRA 1996. HGCRA 1996, s 104(1) provides that construction contracts include agreements for: • the carrying out of construction operations • arranging for the carrying out of construction operations by others, whether under sub-contract or otherwise • providing labour, or the labour of others, for the carrying out of construction operations HGCRA 1996, s 104(2) clarifies that this includes agreements to carry out architectural, design, or surveying work, to provide advice on building, engineering, interior or exterior decoration or on the laying-out of landscape in relation to construction operations. Consultant appointments can therefore be caught by the definition of a ‘construction contract’ where the appointment relates to ‘construction operations’ as defined in the HGCRA 1996. Under section 105, ‘construction operations’ is widely defined and includes works that you would expect in construction and

Construction analysis: The Technology and Construction Court held, in a trial of preliminary issues, that the general rule against recovery of pure economic loss in tort is not qualified where there is potential liability to third parties on adjoining properties and the highway. The court also held that damage to retaining walls in the properties’ back gardens was not covered under an NHBC policy, and that the Building Regulations did not apply.

Construction analysis: The Scottish court dismissed a contractor’s claim against a third party for delay and disruption caused by an escape of foul water onto the site, as the contractor did not have sufficient proprietary interest in the site to bring the claim.

Practical completion marks the end of the construction period of a project, when the works are ‘finished’ and the employer can occupy and/or use them. The Court of Appeal has held that practical completion is a state of affairs in which the relevant works have been completed free from patent defects, other than ones to be ignored as trifling, and can be achieved notwithstanding the existence of latent defects. See generally Practice Note: What is practical completion? Once practical completion has been achieved and certified by the relevant person, ordinarily the contract administrator, this would typically mark the start of the defects liability period (also known as the rectification period or defects notification period). Usually in a construction contract, the contractor will retain an express right for the contractor to have access to site to carry out the work to remedy any

Variation of contracts and deeds An existing contract or deed may be varied in writing, provided that the variation satisfies the usual requirements for the creation of a binding agreement—ie offer, acceptance, certainty, consideration and contractual intention of the parties (although if a variation is documented as a deed, there is no need for the parties to provide consideration). If the variation is executed as a deed, further formalities are required (see Practice Note: Deeds). For more guidance, see also: • Forming enforceable contracts—overview • Practice Note: Forming enforceable

What is force majeure? Force majeure is used to describe an event that occurs which is beyond the control of the parties, and which prevents them from fulfilling their contractual obligations. The courts have previously held that force majeure is an event which goes beyond what the courts understand by the terms 'act of God' or 'vis major'. There is, however, no precise legal definition of force majeure, and so the question of what constitutes a force majeure event will turn on interpretation of the contract. Standard form building contracts deal with force majeure in different ways (see below: Force majeure in standard form building contracts). Parties may, or may not, choose to incorporate a definition of what constitutes force majeure into their contract. It can be difficult therefore to predict with certainty what will constitute force majeure in any context—and the wording of any force majeure clause and the particular circumstances will have to be examined in every case. This Practice Note considers force majeure in the context of construction contracts. For consideration of force

Mortgagee's power of sale A legal mortgagee has a right to sell the property, free from the mortgagor's interest. However, this statutory power can be limited by contract, although most modern mortgages often include an express power which modifies and extends the statutory power. In the absence of the statutory or an express power a court order is needed for sale. However, sale is normally effected without a court order by exercising the mortgagee's statutory power. The statutory power of sale becomes exercisable when the mortgage sum has become payable,

This practice note covers the 2nd Edition of the Burgundy Book published in 2013, focusing in particular on its characteristics as a target cost contract. As with all IChemE contracts, the Burgundy Book has detailed provisions for testing on completion and commissioning making it well suited to the process engineering industries including nuclear, water, petrochemicals, and food. These contracts all follow a virtually identical format in their clauses, layout and schedules. The drafting only departs from a standard text where necessary to capture the mechanism for implementing the risk/reward system covered, in this case payment on a target cost basis. See also Practice Notes: IChemE Conditions 5th Edition—'Red Book' and IChemE Conditions 'Green Book' 4th Edition. Nature of Target Cost Contracts Target cost means that the contractor is paid the ‘actual cost’ it incurs (as defined) in a similar way to a reimbursable contract but subject to a pre-agreed target cost. When the actual cost exceeds the target any further amount paid to the contractor is reduced-often to zero. If the cost is lower

No privity of contract The current owner of the motor car was not in a contract with the repairers, who carried out the work for the previous owner. As there is no privity of contract between the repairers and the current owner, a claim in contract relying on an implied term that the work would be carried out with reasonable care and skill (such as under section 13 of the Supply of Goods and Services Act 1982) will most likely fail. The current owner’s claim against the garage will therefore be limited to an action in negligence. Liability in negligence In order to establish negligence, the claimant will need to prove that the garage owed him a duty

This Deed is made on [insert date] day of [insert month] 20[insert year] Parties 1 [insert name of Sub-contractor] (Company Number [insert company number]) whose registered office is at [insert address] (the ‘Sub-Contractor’); [and] 2 [insert name of Beneficiary] (Company Number [insert company number]) whose registered office is at [insert address] (the ‘Beneficiary’ which expression shall include successors in title and any permitted assignee)[; and OR .] 3 [[insert name of Contractor] (Company Number [insert company number]) whose registered office is at [insert address] (the ‘Contractor’)] Whereas (A) [[[insert Employer’s name]] (Company Number [insert number]) whose registered office is at [insert address] (the ‘Employer')) OR The ‘Beneficiary’]’ has entered into a building contract dated [insert date] with [[where the Contractor is not a party to the warranty, insert name of Contractor] (Company Number [insert number]) whose registered office is at [insert address] (the ‘Contractor’) OR the Contractor ] (the ‘Building Contract’) relating to the[ design and] construction of certain works as defined under the Building Contract (the ‘Works’) in connection with the development known as [insert name] (the ‘Project’).

This Practice Note considers the key issues when drafting a settlement agreement, including correct identification of the parties (including any relevant third parties), setting out the parties’ obligations with sufficient certainty and compulsion (including time of the essence and ‘endeavours’ provisions), drafting the release (the ‘full and final settlement’ estoppel), the inclusion of relevant boilerplate provisions and execution formalities. For guidance on making a settlement offer and determining how to document your settlement, see Practice Notes: • Settling disputes—settlement offers (Calderbank, WPSAC and Part 36) • Settling disputes—how to document a settlement • Settling at a mediation For Precedent draft settlement agreements, see: • Draft Settlement agreement—pre-action settlement • Draft Settlement agreement—for settling disputes post-commencement of proceedings For guidance on resolving disputes resulting from a settlement agreement, see Practice Note: Resolving disputes concerning settlement agreements. Key requirements—drafting the settlement contract As with any contract, the key elements to be considered are: • consideration (unless executing as a deed)—see: Drafting settlement agreements—consideration below • parties to the agreement/deed—see: Drafting settlement agreements—parties and authority below • the effective