A Quick Guide to the Legal Structure of Construction Projects
If you are new to working with construction contractors, haven’t built before, or are starting out with engineering, then you need to make sure that you are up to scratch with all of the legal frameworks that come with that. If you’re not prepared or informed, then it could lead to a number of issues, including the contract, the procurement of tools and materials, insurance, and also any regulations. You don’t want something to go wrong and not know that you’ve been covered. So here are some things to be thinking about, if you’re new to construction, and need to get your build legally in order.
What is the legal structure of a construction project?
Construction projects are something that needs to be covered legally, as they are a legal transaction, and there are a number of ‘pillars’ to that. The parties that are involved, the procurement, the contracts, and insurance, as well as legislation and regulations. The parties are the people like the employer, who has requested the construction work, as well as the contractor who will undertake the build. There can also be other parties involved like architects, project managers, or engineers, depending on the kind of project that you have, as well as what comes with the contractors. There can also be subcontractors too, coming in after the main build, such as plumbers, for instance.
Procurement in the sense of construction is all about getting the goods or services that are needed from having the idea, to seeing the project be completed. It is something that is vital to the whole construction process. Normally the procurement goes to the contractors to deal with, but often there are contracts where the contractor will design the build, as well as construct.
As the undertaking will be one that is expensive, it is important for all parties to have a contract. It protects the employer as they will get what they want for the price stated, but it also helps the contractor as it will help them to make sure they’re clear with what the terms are, what the plan is, and to ensure payment. Employers can ask for some changes to a standard building contract, as they can vary. However, many employers will often use bespoke contracts with legal professionals like Cliff Schneider to draw up a contract. A typical project will also need to cover bonds and deeds of assignment, as well as deeds of novation.
Some precise and detailed arrangements with insurance are really important, as it is such a vital part of any project in construction. As such, employers need to understand that any insurance requirements do need to be imposed on them. As a result, an employer should ensure the construction project in its own name, as well as in those of the contractors and subcontractors of the project. Disputes in construction can often be expensive because they tend to involve detailed analysis and expert opinion, so it is best to make sure that all parties are covered before a project begins.