Construction Industry Council (Cic) Novation Agreement

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We recently published two new standard innovations, one from the City of London Law Society (CLLS) and the other from the Construction Industry Council (CIC). These standard forms were written largely in response to the decision of Blyth-Blyth Ltd v. Carillion Construction Ltd (2001) 79 Con LR 142 (Outer House, Court of Sessions). There is also a provision that is published It is a delicate balancing act to protect the concerns of contractors and to find formulations that satisfy consultants. These conflicting views attempted to reconcile the two new forms and to take into account the themes highlighted in the Blyth-Blyth case. Both have been able to take different paths to address these issues. The CLLS form provides for an ab initio novation, i.e. the contractor is treated as if he had participated in the appointment of the employer from the outset. The approach of the CIC form is not at all Novation, but a task (according to Blyth- Blyth), but with a guarantee from the advisor to the contractor with regard to pre-innovation services. However, contractors should exercise caution to the extent that, by literally interpreting the warranty for the contractor, the contractor could evade the liability provided by Blyth-Blyth if the damage suffered by the contractor is in part similar to the injury suffered by the employer in the event of a pre-renovation breach.

A contract is concluded and a new contract is concluded in its place. In the construction industry, the term „Novation“ is generally used for the use of the same form of contract (i.e. the designation of the advisor) with a change of party, i.e. the employer is replaced by the contractor. Innovations are used in design and construction projects to allow the contractor to follow in the employer`s footsteps with respect to the consultants employed by the employer in the initial phase of the project. The advantage of innovative advisors for the contractor is that it always allows employers to fully control the design in the initial phase, but ultimately assigns the employer individual responsibility for the final design of the final project in the form of the contractor. Novation means, under contractual and economic law, the replacement of an obligation of execution by another obligation or the addition of an obligation to perform or replace a party to an agreement with a new party. It is customary for parties involved in construction projects to use their own forms of tailored innovation agreement and, as a result, many different forms circulate. However, two standard forms were published in 2004, one by the LLSC Works Committee and the other by the CIC. The others are short and simple documents that have avoided unnecessary provisions, but they have different approaches to the consultant`s innovation. However, they deal with both the main problems of Blyth- Blyth v Carillion and the „no loss“ argument (see practical mentions: innovation in construction projects and defence „deficit“ in construction contracts).

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