Last edited 26 Mar 2013

Deferment of possession

Contracts generally grant the contractor exclusive possession of the site until practical completion when a handover meeting takes place and possession reverts to the client (see handover to client). The contract may state the date for possession of the site by the contractor (sometimes called the 'commencement date'), or, if not, then the site must be handed over to the contractor within a reasonable time after signing of the contract.

Some contracts (such as the JCT Standard Form of Building Contract) will entitle the client to defer giving the contractor possession of the site for a period of up to six weeks unless a shorter period was stipulated in the contract particulars (it is probably unwise to reduce the period). This provision enables the client to defer possession without being in breach of contract.

It is considered that deferment of possession is a positive activity which the employer should signal by giving written notice although that is not expressly stated.

Deferment of possession can be considered a relevant event, giving rise to the possibility of the contractor claiming an extension of time or loss and expense. However, for such a claim to succeed, the deferment must have a material effect on the regular progress of the works. Obviously, deferment will have an immediate effect on progress, however, it does not extend the contract period, it simply moves it in time with dates for possession and completion which continue to have the same relationship to each other.

If the contractor is given early notice of deferment, they are likely to incur far fewer costs than if the deferment is only notified a few days before start on site. Issues that might be considered include:

  • Plant hire.
  • The possibility of using operatives elsewhere.
  • Delivery dates
  • Key dates for sub-contractors
  • The possibility of increased costs and interest charges.

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