There has always been a problem of ‘completion’ in a building context. Precisely when does it occur? Building a car in a factory generally produces a product of uniform quality and characteristics, the same cannot generally be achieved in construction projects. Not only that but the definition of when the building is complete is difficult to establish.
When has ‘practical’ completion been achieved under the JCT contracts?
• The JCT contracts - with one exception -simply require the works to have reached ‘practical’ completion. Whilst different judges have expressed themselves differently as to what constitutes practical completion, what can be distilled from their pronouncements is that:
o All the works have been completed for ‘all practical purposes’ (with the result that the employer can take possession and use them as intended);
o There are no patent defects (although there may of course be latent defects); and
o The contract administrator may certify practical completion despite very minor items of outstanding work.
The exception is the JCT Major Project Construction Contract which states that practical completion is achieved when:
• The project is complete for ‘all practical purposes’;
• The statutory requirements have been complied with and all consents or approvals have been obtained;
• There are no minor outstanding works which would affect the project's use;
• All contractual stipulations for PC have been satisfied; and
• The health and safety file and all ‘as built’ information and O&M manuals have been delivered.
• The only JCT contract to define ‘completion’ precisely is the JCT Major Project Construction Contract?
When will ‘substantial’ completion be achieved under the ICE contracts?
• The ICE Conditions of Contract simply require the works to have reached ‘substantial’ completion. The ICE Seventh Edition states in the contractor's notice that it has achieved substantial completion by its undertaking to finish any 'outstanding work’. This provision indicates that not all the works must have been completed before the substantial completion certificate can be issued.
• Whilst the ICE Seventh Edition does not state what is meant by ‘outstanding work’, the ICE Minor Works Conditions state that the works must have reached a state in which they are fit to be taken into use by the employer. Whilst these indications suggest that the test for ‘substantial’ completion is less onerous than that for ‘practical’ completion, there is regrettably no caselaw to provide assistance.
When will completion be achieved under NEC3?
• NEC3 requires the contractor: to do all the work in the works information; and
• To correct notified defects which would have prevented the employer from using the works.
• The requirement to do all the work set out in the works information may well be more onerous than the requirement to achieve ‘practical’ or ‘substantial’ completion - but again there is no case law to provide assistance.
Should the completion provisions of the standard forms be amended?
• Employers understandably often seek to achieve greater certainty by amending the standard forms. Typically a detailed (and sometimes exacting) set of requirements for ‘completion’ is introduced.
• Whilst such amendments may well achieve greater certainty in terms of practical contract administration, it is debatable whether the same can be said from a strictly legal perspective. Judges have been known to take a robust view by deciding that completion was achieved despite the contractor not satisfying each and every such requirement. No employer could seriously contend that completion had not been achieved because of a proverbial paintwork scratch. But what about a requirement for all as built drawings to be handed over? Would a judge be likely to decide that completion had not been achieved because one drawing (out of thousands) was not handed over?
• Whilst introducing detailed completion requirements can make for greater certainty, they should be realistically achievable.
Please note: These key points are only intended to give general guidance and are no substitute for specific legal advice on any given situation.