Master Builders KwaZulu-Natal continually elaborates how critically important it is for contractors to have a signed agreement in place, before commencing work on a building or construction project.

As part of the Association’s ongoing effort to ensure that members are contractually astute, Master Builders KwaZulu-Natal recently hosted two Contractual and Legal workshops which focused on the JBCC suite of contracts. The first was tailored specifically for sub-contractors while the other, was aimed exclusively at main contractors.

Attorney Bruce Lyle of BuildLaw facilitated the workshops and provided members with keen insights regarding their contractual rights and the circumstances under which they should be applied.

The Association is often approached to settle disputes in circumstances under which the work in question, was performed in the absence of a signed agreement. When it does happen, it usually relates to small works or renovations.

A recent matter reported to the Association involved a project in which the client argued that the end-product was not what the contractor had agreed upon and as such, felt justified in withholding payment. A mediation process ensued which resulted in a settlement.

The fact of the matter was that from the start, the all-important foundation from which to resolve disputes, was never in place. A proper contract would have stipulated payment terms as well as the rights and obligations of both parties. By having commenced work without a signed agreement, the contractor’s position was never recorded and the whole dispute could have been avoided. Whist a verbal agreement is valid, the issue with this is proving the contents of the agreement. Certainty and unambiguity are valuable traits when contracting in the construction industry and it is good practice to record the rights and obligations of each party, including the scopes of works, the pricing basis and the payment terms.

It is common knowledge throughout the industry that there is a wide range of quality contract documents available for purchase, such as the JBCC and the MBSA suites of contract. The contracts are specifically designed to deal with the special relationship between Contractors and Employers and the field of construction. The cost for such agreements is negligible, especially when weighing them against the potential costs of doing business without one.

Buildlaw weighs in on this conversation with a candid response to the following question, posed on their website:

“How should I react to assurances that compliance with formalities are not really necessary and that the contract is to be run on the basis of goodwill? Such assurances are usually the first of many lies to come.”

Ernest Roper