Welcome to the July edition of Kensington Swan’s Construction newsletter. In this issue you wil
find insight into latent conditions claims and a reminder of why it’s important to get those
contracts signed.
Contracts
Latent conditions claims
Thecontract’s the thing
‘Few can foresee whither their road wil lead
them, til they come to its end’J R R Tolkien
Ever had a contract that you’ve never quite got
around to signing up? What can happen when you
don’t
.
A recent decision in Australia has some
interesting observations on latent conditions
(unforeseeable physical conditions) claims.
Start a conversation with us….
If you need more information on Construction law and how it affects your business or would like to talk
to one of our experts please contact us.
JULY | 2008
The contract’s the thing
Ever had a contract that you’ve never quite got around to signing up? A recent
UK case,Haden Young Limited v Laing O’Rourke Midlands Limited, is a
reminder of what can happen.
In 2003, Laing O’Rourke entered into a
contract with Coventry North Regeneration
Limited to build a large multi-purpose arena
complex which could hold sports events, trade
exhibitions, and concerts, and which also
encompassed a hotel, casino, leisure centre,
and gym. Laing engaged Haden Young to
carry out the design and installation of the
mechanical and electrical services. The
complex was required to be ready in time for
the local football team to play an opening
match in August 2005.
Laing and Haden agreed on most of the terms
of their proposed subcontract, but the limit
of indemnity in certain warranties to be
provided by Haden proved to be a sticking
point. Despite a good deal of negotiation,
the parties couldn’t agree. As a result, no
subcontract agreement was ever signed, but
Haden commenced work and continued for 18
months until handover—in time for the football
match.
However, a dispute arose over Haden’s final
claim, and the claim ended up in court. Haden
maintained that the parties had never entered
into a subcontract, and that it was e