Construction Contracts in General - Scottish Construction Contracts - page 1

Chapter 1
Construction Contracts in General
1.1 Introduction
Numerous topics have been written on the subject of construction contracts. How-
ever, many of those are of a specialist nature and most are written from the perspective
of English law. he aim of this topic is to provide a practical guide to construction
contracts governed by the law of Scotland.
There is no doubt that the construction industry not only in Scotland, but through-
out the UK, is currently being presented with continuing challenges of an almost
unprecedented nature. In the first quarter of 2013, the construction industry suffered
a contraction of 2.5% compared with the same period in the previous year, despite a
growth in overall Scottish gross domestic product (GDP) of 1.2%. While some major
public sector infrastructure projects have lessened the impact of the economic down-
turn on the Scottish construction sector, the lack of external funding has been a major
factor in the sharp reduction in the number of new private commercial development
projects.
However,theverysizeoftheconstructionindustrymeansthatitisofhuge
significance to the economy. According to figures contained in the report by
Construction Scotland, Building for the Future: The Scottish Construction Industry's
Strategy, 2013-2016 , the construction industry generates £27.4 billion (GDP) to
the Scottish economy every year, contributing 10% of Scotland's total economic
output, and 170,000 people work in construction in Scotland, around 10% of the
total Scottish jobs.
1.2 Definition of a construction contract
1.2.1 General
The definition of a construction contract is not straightforward. The construction
industry encompasses building and engineering projects which differ enormously in
nature, size and complexity. The terms 'building contract' and 'construction contract'
areotenusedinterchangeably.heterm'constructioncontract'wasgivenastatu-
tory meaning for the first time by section 104 of the Housing Grants, Construction
MacRoberts on Scottish Construction Contracts ,hirdEdition.MacRoberts.
© 2015 John Wiley & Sons, Ltd. Published 2015 by John Wiley & Sons, Ltd.