Fewer Legal Headaches for builders?

New Year, new start! Builders can take much of the headache out of working on new building projects by signing up to a new pre-construction services agreement.

That’s the advice from Sussex solicitors, Adams & Remers, who say that the agreement could prove a helpful alternative to letters of intent.

“Traditionally,” says Albie Passmore, solicitor at Adams & Remers, “developers and contractors have used a letter of intent to establish a framework to get a project ‘off the ground’ before formal contracts are ready to be signed.

“But, while the parties may not intend their letter of intent to create a binding contract between them, several court cases have concluded that the letters represent a contractual relationship – causing problems and ambiguity for builders and clients alike.”

The launch of a new pre-construction services agreement will, according to Adams & Remers, help ease many of these concerns. The two new forms of service agreement, allow developers to employ contactors or other specialists to provide consulting services in advance of a formal contract.

The two forms of agreement anticipate that the developer has identified the contractor or specialist it intends to engage and that there will be a two-stage tender process. The first stage is the issue of outline information and invitation for proposals. The developer then selects the contractor or specialist and moves to the second, pre-construction stage by either entering into a Pre-Construction Services Agreement (General Contractor) (PCSA) or a Pre-Contract Services Agreement (Specialist).

“Once the PCSA or PCSA/SP agreement has been drawn up,” says Albie Passmore, “the parties can work together with the certainty of contractual protection before entering into a fully specified and priced contract.”

He adds: “The new agreements mean that developers and contractors now have the choice of relying on a letter of intent or entering into a more formal pre-construction arrangement. This choice, which should be made with the help of a professional adviser, will take much of the headache out of building works in advance of formal contracts.”

For further information, contact Albie Passmore by email Albie.Passmore@adams-remers.co.uk or telephone 01273 480616.