Materials on/off Site Flashcards
Are materials on site that havent been used included in the valuation?
Yes - it is important for a contractors cash flow
Assuming they meet the requirements in the contract
What requirements must materials on site meet in order to be included in a valuation?
(3 points)
- The materials must be delivered to the site or adjacent to the site.
- The materials cannot improperly or prematurely be brought to site, there must be reason for them to be there, e.g., upcoming requitement for them within the program.
- They must be adequately stored on the site – protected from elements and other risks.
Example conditions - refer to specific contract
What does “Title” mean?
Ownership
What happens if an employer pays for material that the contractor does not have the title to pass on.
The employer will be at risk
They will not own the material
Legally speaking, when does title pass?
When the parties to the contract intend for it to pass
What two pieces of legislation are relevant to the passing of title?
- Section 17 Sale of Goods Act (SGA) 1979
- Supply of Goods and Services Act (SGSA) 1982
Traditionally - in non-construction acivity - when would title pass between two parties?
Usually when goods are paid for in full
When the partys intend for it to pass*
In a construction supply contract - when does title traditionally pass
When material is deliverd to site
When the partys intend for it to pass*
What clause may a construction supply contract have in order to limit the risk of the supplier?
A retention of title clause
What does a retention of title clasue do?
Ensure that the title of material remains with the supplier until the material has been paid for
What did the case Aluminium Industrie Vaassen v Romalpa Aluminium [1976] mean for the retention of title clauses?
Retention of title case law
Retention of title clauses can deprive the client of title, even in a circumstance where the client has paid a third party (an insolvent contractor).
What did the case Borden (UK) v Scottish Timber [1981] mean for the retention of title clauses?
Retention of title case law
A right to goods by a supplier will be lost if the goods are irreversibly mixed or incorporated onto other goods – a retention of title clause for resin was deemed ineffective as the resin had been mixed irreversibly in chipboard manufacturing.
What did the case Hendy Lennox v Grahame Puttick [1984] mean for the retention of title clauses?
Retention of title case law
in a situation where a supplied good or material, which had been affixed (expended) the retention of title could be maintained so long as the goods could be retrieved without damage. This case involved an engine that had been bolted down – it could be removed without causing damage.
?????? v Romalpa Aluminium [1976]
Supplier still owned title despite client paying 3rd party
Retention of title case law
Aluminium Industrie Vaassen
Aluminium Industrie Vaassen v ?????? [1976]
Supplier still owned title despite client paying 3rd party
Retention of title case law
Romalpa Aluminium
