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APSS Contract for Construction Services

1. General

1.1 - This Contract sets out all the rights and obligations of the parties and no other terms or conditions shall be incorporated or implied save by statute.

1.2 - No amendment or modification of this Contract shall be valid or binding unless it is made in writing and signed by the parties or their authorised representatives.

1.3 - All rights under the Contracts (Rights of Third Parties) Act 1999 are excluded.

1.4 - This Contract shall be construed in accordance with the laws of England and the parties submit to the non-exclusive jurisdiction of the English Courts.

2. Contractor’s Obligations

2.1 -  The Contractor shall:

  1. carry out and complete the Works with reasonable skill and care and in accordance with the Contract Documents;
  2. use goods and materials as specified in the Contract Documents or which are new and are of satisfactory quality;
  3. provide all necessary tools, plant and equipment to carry out the Works;
  4. commence the Works by the Start Date;
  5. complete the Works (subject to any extension of time granted under clause 5 or clause 7) by the Completion Date;
  6. take out and maintain the Contractor’s Insurances until the end of the Rectification Period (save that the Contractor shall, where applicable, maintain professional indemnity insurance for a period of 6 years from the date of practical completion);
  7. comply with its duties under the Construction (Design and Management) Regulations 2015; and
  8. following practical completion of the Works use reasonable endeavours to assign to the Employer any manufacturer’s guarantees or warranties.

2.2 - Where the Contractor undertakes any design in relation to the Works, the Contractor shall exercise the reasonable skill and care to be expected of a design and build contractor experienced in designing works of a similar nature, scope and complexity.

2.3 - Unless expressly acknowledged in the Contract Documents, the Contractor does not assume any risk in relation to prevailing ground or site conditions.

3. Employer’s Obligations

3.1 -  The Employer shall:

  1. provide clear and unhindered access to the Site;
  2. provide suitable and adequate access and egress to and from the Site;
  3. provide a safe place for the storage of materials required for the Works;
  4. provide all necessary information to the Contractor in relation to the Works including the determination of any levels or other documents to allow the Contractor set out the Works;
  5. take out and maintain the Employer’s Insurances until practical completion of the Works;
  6. appoint the Employer’s Representative who will be authorised to issue instructions and give and/or receive notices on behalf of the Employer;
  7. pay the Contract Sum in accordance with clause 6;
  8. obtain all necessary permits, licences and permissions necessary for the carrying out of the Works;
  9. comply with its duties under the Construction (Design and Management) Regulations 2015; and
  10. comply with the Contractor’s or any manufacturer’s instructions or guidance in relation to the care and maintenance of the Works.

4. Sub-Contracting

4.1 - The Contractor may sub-contract all or part of the Works.

5. Variations

5.1 - The Employer or Employer’s Representative may issue instructions to the Contractor requiring additional or varied work to be carried out (a “Variation”).

5.2 - Within 5 working days of receipt of a Variation instruction the Contractor will submit to the Employer a quotation for the Variation and an indication of any additional time the Contractor requires to complete the Works.

5.3 - Within 5 working days of receipt of the Contractor’s quotation, the Employer will accept or reject the Contractor’s proposals. Where the Contractor’s quotation is accepted, the Contract Sum and Completion Date shall be adjusted accordingly.

5.4 - Where the Employer instructs the Contractor to proceed with a Variation but no adjustment to the Contract Sum or Completion Date is agreed:

  1. the Contract Sum will be adjusted by reference to any rates and/or prices set out in the Contract Documents or in the absence of such rates and/or prices the Contract Price will be adjusted by a fair and reasonable sum; and
  2. the Completion Date will be adjusted by a reasonable period.

6. Payment

6.1 - Where no Payment Terms are stated in the Contract Data, the following terms shall apply.

6.2 - Where the Works are stated to last for less than 45 days:

  1. The Contractor shall submit a “deposit” invoice for 60% of the Contract Sum (the “Initial Sum”) upon entering into this Contract. The final date for payment of the Initial Sum shall be not later than 7 days prior to the Works commencing on Site.
  2. The Contractor shall submit an invoice for the remaining 40% of the Contract Sum (the “Balancing Sum”) (including the value of Variations under clause 5) upon practical completion. The final date for payment of the Balancing Sum shall be 28 days from the date of the invoice.

6.3 -  Where the Works are stated to last 45 days or more:

  1. The Contractor shall submit a “deposit” invoice for 60% of the Contract Sum upon entering into this Contract, the final date for payment for which shall be not later than 7 days prior to the Works commencing on Site.
  2. The Contractor shall submit invoices for 35% of the Contract Sum (including the value of Variations under clause 5) on a valuation basis at 4 weekly intervals following the Works Commencing on Site.
  3. The Contractor shall submit an invoice for the remaining 5% of the Contract Sum upon practical completion being achieved.
  4. The due date for payment shall be the date of the relevant invoice.
  5. Not later than 5 days after the due date, the Employer shall issue a notice stating the amount the Employer considers to be due and the basis upon which the amount has been calculated (a “Payment Notice”).
  6. The final date for payment shall be 28 days after the due date.
  7. If the Employer intends to pay less than the amount stated in the Contractor’s invoice or the Payment Notice (as the case may be) not later than 7 days prior to the final date for payment, the Employer shall issue a notice stating the amount the Employer considers to be due as at the date of the notice and the basis upon which the amount has been calculated (a “Pay Less Notice”).
  8. In the absence of a valid Payment Notice or a Pay Less Notice, the Employer shall pay the amount stated in the relevant invoice by the final date for payment.

6.4 - Any sum due which is not paid by the final date for payment shall attract interest in accordance with the Late Payment of Commercial debts (Interest) Act 1998.

  1. Without affecting the Contractor’s other rights and remedies, where any sum due is not paid by the final date for payment the Contractor may give not less than 7 days’ notice of its intention to suspend any or all of its obligations under the Contract.
  2. If the Employer fails to make payment of the sum due by the end of the 7 day period of notice, the Contractor may suspend any or all of its obligations under the Contract until such time as payment is made in full.
  3. The Completion Date shall be extended by the period of suspension (together with a reasonable period for remobilisation).
  4. The Contractor shall be entitled to any costs and/or expenses reasonably incurred as a result of exercising its right of suspension.

7. Adjustment of the Completion Date

7.1 - The Contractor will use reasonable endeavours to prevent any delay in the carrying out of the Works.

7.2 - If it becomes apparent that the Works will not be completed by the Completion Date (or any adjusted Completion Date), the Contractor will notify the Employer setting out the cause and likely effect of the delay.

7.3 - If the cause of the delay is a Relevant Event, the Employer or Employer’s Representative will adjust the Completion Date by a fair and reasonable period.

7.4 - Where a Relevant Event causes the Contractor to suffer or incur additional loss and/or expense, the Employer or Employer’s Representative Agent will adjust the Contract Sum by that amount, subject to the Contractor providing reasonable substantiation.

7.5 -  For the purposes of this clause 7 the following are Relevant Events:

  1. any Variation instructed under clause 5;
  2. a failure by the Employer to provide access to the Site;
  3. suspension by the Contractor under clause 6.5;
  4. any impediment, prevention or default of the Employer (whether by act or omission);
  5. the carrying out (or failure to carry out) of works by any statutory undertaker in connection with the Works or the Site;
  6. adverse weather conditions;
  7. unforeseen ground or site conditions;
  8. loss or damage caused by fire, lightening, explosion, storm, flood, escape of water, earthquake, riot or civil commotion;
  9. industrial action (providing such industrial action is not limited to the Works or the Site);
  10. any default of any sub-contractor which is beyond the control of the Contractor; and
  11. force majeure.

7.6 - The Completion Date may be adjusted retrospectively.

8. Completion and Defects

8.1 -  Practical Completion

  1. When the Works are practically complete, the Employer (or its authorised representative) will sign and issue to the Contractor a certificate to that effect (a “Practical Completion Certificate”).
  2. Practical completion means that the Works are free from any apparent defects and there are no incomplete works which would prevent the Employer taking beneficial occupation and use of the Works.
  3. In the absence of a Practical Completion Certificate, where the Employer takes beneficial occupation of the Works, practical completion will be deemed to have been achieved.

8.2 -  Rectification of Defects

  1. If any defects to the Works appear during the Rectification Period, the Employer or Employer’s Representative will notify the Contractor in writing (a “Defects Notice”) and the Contractor will, at its own cost, remedy the defects as soon as reasonably practicable. The Contractor shall not be responsible for remedying any defects which are due to the act, default or omission of the Employer or any party other than the Contractor, or due to the Employer’s failure to comply with any care and maintenance instructions or guidance in relation to the Works. Any failure by the Employer or any third party to comply with such care and maintenance instructions may invalidate any warranty or guarantee provided in relation to the Works.
  2. The Contractor shall not be liable for any loss and/or damage or be obliged to rectify any defects caused by the Employer’s failure to comply with its obligations set out at clause 3.
  3. A Defects Notice may not be given to the Contractor later than the expiry of the Rectification Period.
  4. When the Contractor has completed its obligations under this clause 8.2 the Employer or Employer’s Agent will issue to the Contractor a certificate to that effect and (if applicable) will release to the Contractor the remaining retention.

9. Copyright

9.1 - The copyright in all drawings, designs, charts, specifications, plans, software and any other documents or materials in any medium which have been created and/or developed by the Contractor in the course of performing its obligations under this Contract (the “Documents”) will remain vested in the Contractor.

9.2 - The Contractor grants to the Beneficiary an irrevocable, royalty-free, non-exclusive licence to use and to reproduce all Documents for any purpose whatsoever connected with the Works.

9.3 - The Contractor will not be liable for any use the Employer may make of the Documents for any purpose other than the purposes for which they were prepared.

10. Termination

10.1 -  Either party may terminate the Contractor’s employment under this Contract if the other party is insolvent. For the purposes of this clause 10 “insolvent” means:

  1. entering into any arrangement or composition with its creditors;
  2. taking the benefit of any statutory provision for the relief of insolvent debtors;
  3. entering into liquidation (whether compulsory or voluntary);
  4. having a receiver and/or manager or administrator appointed;
  5. having court proceedings issued against it relating to insolvency; or
  6. having a bankruptcy order made against it.

10.2 - Either party may terminate the Contractor’s employment under this Contract where the other party is in material breach of this Contract and fails to remedy that breach within 7 days of receiving a written notice requiring it to do so.

10.3 - Where the Contractor’s employment under this Contract is terminated:

  1. for whatever reason, the Contractor shall be entitled to be paid in respect of all Works completed up to the date of termination;
  2. due to a Contractor default, the Employer shall be entitled to recover from the Contractor any additional cost it incurs in completing the Works providing such costs have been incurred reasonably and the Employer has taken reasonable steps to mitigate them;
  3. due to an Employer default, the Contractor shall be entitled to recover any loss and/or expense incurred and/or any loss of profits suffered as a result of the termination.

11. Limitation of Liability

11.1 - Nothing in these Conditions shall limit or exclude the Contractor’s liability for:

  1. death or personal injury caused by its negligence, or the negligence of its employees, agents or subcontractors (as applicable);
  2. fraud or fraudulent misrepresentation;

11.2 - Subject to clause 11.1 (and without prejudice to clause 10.3.2):

  1. the Contractor shall, under no circumstances whatever, be liable to the Employer, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, for any loss of profit, or any indirect or consequential loss arising under or in connection with this Contract; and
  2. the Contractor’s total liability to the Employer in respect of all other losses arising under or in connection with this Contract, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, shall in no circumstances exceed £5,000,000 (five million pounds).

12. Dispute Resolution

12.1 - Mediation

  1. If a dispute or difference cannot be resolved by negotiations between senior representatives of the parties, serious consideration shall be given to referring the dispute or difference to mediation.

12.2 - Adjudication

  1. Where Part 2 of the Housing Grants Construction and Regeneration Act 1996 applies, any dispute or difference may be referred to adjudication in accordance with the Scheme for Construction Contracts (England and Wales) Regulations 1998.
  2. The adjudicator nominating body shall be either the RICS or TeCSA.
  3. The adjudicator shall give reasons for his decision.