Page 48 - Interactive report Ar Site Practice

CONCLUSION AND TAKEAWAY THOUGHTS.

Judgments in case law provide a reminder to the definitive effect and meaning of
Practical Completion within a Construction Contract. Unless amended, Practical
Completion is solely at the discretion of the Employers Agent or the Contract
Administrator and it is awarded based on their professional opinion along with
compliance of certain contract clauses.

When deciding whether Practical Completion has been achieved or not, start with
the contract: does this explicitly provide a definition as to what Practical
Completion is? If so, this is the basis for awarding Practical Completion.

Regardless of whether there is definition or implications of Practical Completion, be
mindful of:

1. The requirement for the release of half of the retention, which will be in
addition to the latest application for payment
2. The obligation to insure the works as this passes from Contractor to Employer
upon Practical Completion
3. Practical completion is the date at which the rectification countdown begins.
Any “outstanding / Snagging” items are the responsibility of the Contractor to

complete. However, there may be times, say when a retention bond is used, that
the contractor has little or no “skin in the game” to warrant a return visit to
complete any outstanding works.

There is a lot to consider when approaching Practical Completion of a project. As
Practical Completion itself is essentially “a professional opinion,” this is open to
challenge. The Contractor may apply pressure to issue Practical Completion in order to
flatter their records and, in some circumstances, the client may agitate for issue of
Practical Completion as they need to take control of the building.

In any event, issuing Practical Completion is the sole responsibility of the Employers
Agent or Contract Administrator and should not be taken lightly due to the

ramifications to the Building Contract.