feature
Rights and remedies in
pool building contracts
SPASA has put together an article to help ensure pool building businesses know their rights and obligations in contract arrangements. SPLASH! published some of this information as an addenda to a story on fixed price contracts in Edition 149, but now presents the full article. By Spiros Dassakis
S
PASA recommends that all pool building businesses and associated contractors take the time to review their contractual agreements, specifically what rights and remedies are available to them during the life of a project. SPASA contracts outline processes that allow for delays, extensions of time and circumstances that are outside the control of the builder. The contracts are designed to ensure that the builder is better protected and understands what they are building; and the homeowner fully understands what to expect, and what they are getting.
Managing the contract
Correctly managing a construction contract can save a pool builder thousands of dollars on every job. Managing the contract process ensures the smooth flow of a project and helps control costs. It also provides a mechanism to resolve disputes between parties if they arise. Construction contract management also provides processes that provide clear resolution of all matters regarding the project including scope, cost, time frame, and risk allocation. Contractual process: Parties to a contract must understand what processes they are required to follow in certain situations. It is critical that pool builders take time to read and understand their contract and the processes they must follow for matters relating to delays, notices, variations and breaches. Failing to properly observe and manage your contractual obligation may place you at unnecessary risk as well as add significant costs and exposure to loss of profit.
Contracts clauses and notices
Exercising contract clauses and servicing notices under a building contract is crucial for maintaining clear communication, managing risks, resolving disputes and ensuring the successful completion of a construction project. These actions help to establish a structured framework for the parties involved to fulfill their obligations and deal with potential issues that may arise during the project’s lifecycle. Below are some key reasons why exercising contract clauses and servicing notices is important. Clarity and communication: Contract clauses outline the rights, responsibilities, and expectations of each party. By exercising these clauses and serving notices, parties ensure that all stakeholders are on the same page and understand their obligations. This helps prevent misunderstandings and misinterpretations that can lead to disputes. Risk management: Building contracts often include provisions that allocate risks among the parties. Exercising relevant clauses and issuing notices, when necessary, allows 16
SPLASH!
December 2023/January 2024
ABOVE: A selection of SPASA contracts
parties to address potential risks and take appropriate actions to mitigate them. For instance, if there are delays due to unforeseen circumstances, proper notices can trigger discussions on how to manage the impact on the project schedule and costs. Dispute resolution: Building contracts typically include mechanisms for resolving disputes, such as mediation, arbitration or litigation. Properly exercising contract clauses and serving notices can be a prerequisite for triggering these dispute resolution processes. By following the prescribed procedures, parties enhance their ability to resolve conflicts in a structured manner. Contractual compliance: Exercising contract clauses and serving notices is often a contractual obligation. Failing to adhere to these requirements can lead to claims of breach of contract, potentially resulting in financial penalties, delays or even termination of the contract. Preservation of rights: Some contract clauses may require parties to take specific actions within a certain timeframe to preserve their rights. For example, if a contractor encounters unforeseen site conditions that impact the project’s scope or cost, they may need to provide a notice within a specified period to claim additional compensation or time. Project control and management: Contract clauses and notices help maintain control over the project by providing a mechanism to track progress, changes and issues. This allows parties to proactively address any deviations from the original plan, ensuring that the project stays on track and within the agreed-upon parameters. Documentation: Exercising contract clauses and serving notices creates a paper trail that documents the project’s evolution, changes and challenges. This documentation can be invaluable in the event of disputes or claims, providing evidence of each party’s actions and intentions. Exercising contract clauses and servicing notices under a building contract is a fundamental aspect of effective contract management. It establishes a structured framework for communication, risk management, dispute resolution and overall project success.