Whole Agreement Clause Determines Payment Schedule

Construction projects inevitably lead to a large number of contracts being created between the various contractors, subcontractors, suppliers and developers involved.

This in turn can produce problems in the event of a dispute, as it can be difficult to know in some circumstances which contract applies.

In general, where a term in a contract has been drafted specifically for the contract, that term will take precedence over any conflicting standard term in the contract, unless it is expressly overridden by a term in the standard contract.

In a recent case, a dispute arose under a contract for a mixed residential and commercial development in Camden. It concerned the payment dates under the agreement and whether the developer had issued a valid withholding notice against the contractor’s application for payment. However, the terms in the contract were not compatible with those contained in the standard JCT agreement that governed the development as this contained a ‘whole agreement’ clause, which specifically stated that it was not to be overridden or modified in a number of areas, which included the payment mechanism.

Accordingly, ruled the court, the standard JCT terms applied, notwithstanding the specific payment clauses in the contract.

Disputes such as this can have a major impact on a business, especially when cash flow is tight and additional finance facilities are difficult to obtain. Wolferstans can help you make sure your contracts do not result in any unpleasant surprises.

Contact Bill Duncan for advice.

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