Civil Engineering Reference
In-Depth Information
a whole course of correspondence to ascertain whether certain letters were intended
to constitute certificates.
Unless otherwise required by the terms of the contract, a certificate does not have
to include any reasons in support of the matters decided by or the opinions expressed
in the certificate, and a lack of reasons can make the challenge of the certificate by
an aggrieved party more difficult. Whether this is a perceived advantage or disad-
vantage is a matter for the parties to decide and take account of when drafting the
contract.
In addition to any requirements regarding the form of certificates, there are other
matters that should be borne in mind when preparing and issuing certificates. In par-
ticular, one should ensure that any express pre-conditions to the issue of a certificate
have been complied with. Such pre-conditions may include when the certificate needs
to be issued; by what mechanism the certificate should be issued; by whom the cer-
tiicateshouldbeissued;andtowhomthecertiicateshouldbeissued.
For example, clause 4.15 of the SBC contains a number of pre-conditions to the
issue of a Final Certificate, namely the end of the Rectification Period in respect of
the Works or where there are Sections the last such period to expire, the issue of the
Certificate of Making Good, and the sending by the architect to the contractor of an
ascertainment of any loss and expense and a statement of all adjustments to be made
to the Contract Sum. In addition, the Final Certificate must be issued no later than
two months after whichever of the foregoing is last to occur. Clause 4.15 goes on to
stipulatewhattheFinalCertiicateshouldinclude,beingtheadjustedContractSum;
thesumoftheamountsalreadystatedasdueinInterimCertiicatesplustheamountof
any advance payment; the difference between the two sums expressed as a balance due
to the contractor from the employer or vice versa; and the basis on which that balance
has been calculated. As an example of a case where pre-conditions were not followed,
see
GAGroupLtd
v.
Scottish Metropolitan Property plc
(1992) where a certificate of
non-completion was held to be invalid due to the fact that it was issued prior to the
expiry of the period for completion. See also
Crestar Ltd
v.
Michael John Carr and Joy
Carr
(1987).
It is common for standard forms of building contract to stipulate that the certificate
mustactuallybedeliveredtothepartiestothecontract.herequirementsfordeliv-
ery may also be expressed including the method of delivery and the address to which
delivery has to be made, for example, to a limited company at its registered oice. he
SBC provides, in clause 1.8, that each certificate issued by the Architect shall be issued
to the Employer and the Contractor at the same time and clause 1.7 contains detailed
provisions in relation to how all notices and communications under the contract are
to be transmitted. Identical provisions on the transmission of notices and communi-
cations are contained in clause 1.7 of the SBC/DB. In the event that the contract does
not stipulate that the certificate needs to be delivered to the parties, then it is probably
implied in any event. See, for example, the comments of Lord Justice Edmund Davies
in the case of
Token Construction Co. Ltd
v.
Charlton Estates Ltd
(1973).
Minor errors in complying with any of the formal requirements of a certificate may
not result in the certificate being held to be invalid, provided that the substance and
effect of the certificate are correct and provided none of the parties to the contract
have been misled or prejudiced. Nevertheless, such comfort should not be relied upon
