Construction is a massive global industry and each individual construction project involves several legal contracts.
Main contractors’ margins have diminished in recent years to the extent that often they tender for work with a projected profit margin of just 1 – 2%. With such tight margins it is imperative that projects are completed on time and within budget. There is hardly ever a situation where projects are completed without variations or other potential issues that need resolving with the employer. Expert legal advice is essential to the main contractor to ensure they continue to work and remain profitable.
Contracts are often entered into by sub-contractors who will sign anything just to get the work in the genuine belief that if they complete the work they will be paid for it. Sadly this is often not the case as disputes over delays, none fulfilment, sub standards works, insolvency, instruction of third parties and so on emerge. Sub-contractors rely upon regular monthly payments to fund their cashflow. If a sub-contractor does not receive a monthly payment it can have a detrimental effect on their business, resulting in workers “downing tools”, suppliers not being paid and even insolvency.
Construction law is complex and fast changing. ICL Commercial Law has in house counsel available to support our construction clients.