FAQ's Principal Building Agreement
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Clause 2 |
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Question 1An invitation to tender was advertised and in due course the successful tenderer was informed in writing of the acceptance of his offer and requested to submit the documentation required as stated in the invitation. The contractor failed to provide the Construction Guarantee as elected by him and did not appear on site on the date set for the handover. The contractor later informed the employer that he was unable to raise the guarantee and submitted a letter from his attorney stating that a contract was not, as yet, in existence and therefore the contractor was not in breach. Is this the case and how do we determine if a contract does or does not exist? Ref: P02.001 |
AnswerThe issue of whether a contract does or does not exist can become very complex but a reasonable quick guide is look at the provisions that give either party the right to terminate (cancel) the Agreement: 36.1.1 Fails to comply [3.3, 14.1, 15.1.1-2] 36.1.2 Refuses to comply with a contract instruction 15.1 .....the contractor shall submit ..... 38.1.5 Give possession of the site... None of the above provisions could occur or be enacted without a legal agreement being in existence. |