Reliance letters in design and construction - Revision history

Designing Buildings at 08:27, 21 September 2020

2020-09-21T08:27:07Z

← Older revision		Revision as of 08:27, 21 September 2020
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−	~~To help develop this article, click ‘Edit this article’ above.~~
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	Reports are often commissioned by parties involved in the design and construction of built assets that another party (other than the original client) then has to rely on to support or inform their own activities. Under such circumstances, the author of the report might issue a reliance letter, confirming that the third party can rely on the contents of the report, or can rely on a specific part of the report.		Reports are often commissioned by parties involved in the design and construction of built assets that another party (other than the original client) then has to rely on to support or inform their own activities. Under such circumstances, the author of the report might issue a reliance letter, confirming that the third party can rely on the contents of the report, or can rely on a specific part of the report.

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	Such a letter might include:		Such a letter might include:
−	*A description of the report(s) to which the letter relates.	+
−	*The reason for the reliance.	+	* A description of the report(s) to which the letter relates.
−	*A warrant that the author exercised reasonable skill and care in preparing the report.	+	* The reason for the reliance.
−	*Details of the original appointment agreement, perhaps limiting liability to that under the appointment (this requires that a copy of the appointment is provided).	+	* A warrant that the author exercised reasonable skill and care in preparing the report.
−	*Other limitations to liability, such as a limiting period.	+	* Details of the original appointment agreement, perhaps limiting liability to that under the appointment (this requires that a copy of the appointment is provided).
−	*A licence for use of the report.	+	* Other limitations to liability, such as a limiting period.
−	*Confirmation of professional indemnity insurance.	+	* A licence for use of the report.
−	*Consideration from the beneficiary to the consultant.	+	* Confirmation of professional indemnity insurance.
−	*A right to assign the benefit of the letter (for example to funders).	+	* Consideration from the beneficiary to the consultant.
−	*Execution, perhaps as a deed.	+	* A right to assign the benefit of the letter (for example to funders).
		+	* Execution, perhaps as a deed.

	This can be seen as a quicker and easier arrangement than providing a collateral warranty, or relying on the provisions of the Contracts (Rights of Third Parties) Act. However, it is important to ensure that the letter is carefully drafted and that the correct details are entered. Whether the result of a reliance letter is simply a common law duty to use reasonable skill and care, or whether it amounts to a contract between the parties that may introduce a greater duty will depend on the wording of the letter.		This can be seen as a quicker and easier arrangement than providing a collateral warranty, or relying on the provisions of the Contracts (Rights of Third Parties) Act. However, it is important to ensure that the letter is carefully drafted and that the correct details are entered. Whether the result of a reliance letter is simply a common law duty to use reasonable skill and care, or whether it amounts to a contract between the parties that may introduce a greater duty will depend on the wording of the letter.

	There are four essentials of a contract:		There are four essentials of a contract:
−	*Two or more parties; and	+
−	*An intention to create legal relations; and	+	* Two or more parties; and
−	*An agreement; and	+	* An intention to create legal relations; and
−	*Consideration	+	* An agreement; and
		+	* Consideration

	The two essentials that might be disputed are an intention to create legal relations and consideration. This might be demonstrated by a consideration clause and by both parties executing the letter. However, even in the absence of such provisions, it may be apparent from the actions of the parties that the recipient of the letter has relied on it to their detriment, and this may be sufficient to establish ‘consideration’.		The two essentials that might be disputed are an intention to create legal relations and consideration. This might be demonstrated by a consideration clause and by both parties executing the letter. However, even in the absence of such provisions, it may be apparent from the actions of the parties that the recipient of the letter has relied on it to their detriment, and this may be sufficient to establish ‘consideration’.

−	= ~~Find out more~~ =	+	= Related articles on Designing Buildings Wiki =

−	~~=== Related articles on Designing Buildings Wiki ===~~	+	* Assignment.
−	*Assignment.	+	* Collateral warranty.
−	*Collateral warranty.	+	* Third party rights.
−	*Third party rights.	+	* Letter of intent.
−	*Letter of intent.	+	* Letter of appointment.
−	*Letter of appointment.	+	* Essentials of a contract
−	*Essentials of a contract	+

−	[[Category:Contracts_/_payment]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]]

Designing Buildings: moved Reliance letter to Reliance letters in design and construction

2015-03-11T13:10:21Z

moved Reliance letter to Reliance letters in design and construction

← Older revision

Revision as of 13:10, 11 March 2015

Designing Buildings at 09:17, 26 September 2014

2014-09-26T09:17:35Z

← Older revision		Revision as of 09:17, 26 September 2014
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	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
		+	*Assignment.
	*Collateral warranty.		*Collateral warranty.
	*Third party rights.		*Third party rights.

Designing Buildings at 09:16, 26 September 2014

2014-09-26T09:16:10Z

Designing Buildings: Created page with " To help develop this article, click ‘Edit this article’ above. Reports are often commissioned by parties involved in the design and construction of built assets that anoth..."

2014-09-26T09:13:26Z

Created page with " To help develop this article, click ‘Edit this article’ above. Reports are often commissioned by parties involved in the design and construction of built assets that anoth..."

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To help develop this article, click ‘Edit this article’ above.

Reports are often commissioned by parties involved in the design and construction of built assets that another party (other than the original client) then has to rely on to support or inform their own activities. Under such circumstances, the author of the report might issue a reliance letter, confirming that the third party can rely on the contents of the report, or can rely on a specific part of the report.

For example, the an organisation selling a site might commission an assessment of geotechnical or environmental conditions that the purchaser then relies on when deciding whether to buy the site and at what price. Under these circumstances, the author of the report might issue a letter confirming that the purchaser can rely on the contents of the report.

Such a letter might include:
*A description of the report(s) to which the letter relates.
*The reason for the reliance.
*A warrant that the author exercised reasonable skill and care in preparing the report.
*Details of the original appointment agreement, perhaps limiting liability to that under the appointment (this requires that a copy of the appointment is provided).
*Other limitations to liability, such as a limiting period.
*A licence for use of the report.
*Confirmation of appropriate professional indemnity insurance.
*Consideration from the beneficiary to the consultant.
*A right to assign the benefit of the letter (for example to funders).
*Execution, perhaps as a deed.

This can be seen as a quicker and easier arrangement that providing a collateral warranty, or relying on the provisions of the Contracts (Rights of Third Parties) Act. However, it is important to ensure that the letter is carefully drafted and that the correct details are entered. Whether the result of a reliance letter is simply a common law duty to use reasonable skill and care, or whether it amounts to a contract between the parties that may introduce a greater duty will depend on the wording of the letter.

There are four essentials of a contract:
*Two or more parties; and
*An intention to create legal relations; and
*An agreement; and
*Consideration

The two essentials that might be disputed are an intention to create legal relations and consideration. This might be demonstrated by a consideration clause and by both parties executing the letter. However, even in the absence of such provisions, it may be apparent from the actions of the parties that the recipient of the letter has relied on it to their detriment, and this may be sufficient to establish ‘consideration’.

= Find out more =

=== Related articles on Designing Buildings Wiki ===
*Collateral warranty.
*Third party rights.
*Letter of intent.
*Letter of appointment.
*Essentials of a contract

[[Category:Contracts_/_payment]]

← Older revision		Revision as of 09:16, 26 September 2014
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	To help develop this article, click ‘Edit this article’ above.		To help develop this article, click ‘Edit this article’ above.
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		+	----

	Reports are often commissioned by parties involved in the design and construction of built assets that another party (other than the original client) then has to rely on to support or inform their own activities. Under such circumstances, the author of the report might issue a reliance letter, confirming that the third party can rely on the contents of the report, or can rely on a specific part of the report.		Reports are often commissioned by parties involved in the design and construction of built assets that another party (other than the original client) then has to rely on to support or inform their own activities. Under such circumstances, the author of the report might issue a reliance letter, confirming that the third party can rely on the contents of the report, or can rely on a specific part of the report.

−	For example, ~~the~~ an organisation selling a site might commission an assessment of geotechnical or environmental conditions that ~~the~~ purchaser ~~then~~ relies on when deciding whether to buy the site and at what price. Under these circumstances, the author of the report might issue a letter confirming that the purchaser can rely on the contents of the report.	+	For example, an organisation selling a site might commission an assessment of geotechnical or environmental conditions that a purchaser later relies on when deciding whether to buy the site and at what price. Under these circumstances, the author of the report might issue a letter confirming that the purchaser can rely on the contents of the report.

	Such a letter might include:		Such a letter might include:
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	*Other limitations to liability, such as a limiting period.		*Other limitations to liability, such as a limiting period.
	*A licence for use of the report.		*A licence for use of the report.
−	*Confirmation of ~~appropriate~~ professional indemnity insurance.	+	*Confirmation of professional indemnity insurance.
	*Consideration from the beneficiary to the consultant.		*Consideration from the beneficiary to the consultant.
	*A right to assign the benefit of the letter (for example to funders).		*A right to assign the benefit of the letter (for example to funders).
	*Execution, perhaps as a deed.		*Execution, perhaps as a deed.

−	This can be seen as a quicker and easier arrangement ~~that~~ providing a collateral warranty, or relying on the provisions of the Contracts (Rights of Third Parties) Act. However, it is important to ensure that the letter is carefully drafted and that the correct details are entered. Whether the result of a reliance letter is simply a common law duty to use reasonable skill and care, or whether it amounts to a contract between the parties that may introduce a greater duty will depend on the wording of the letter.	+	This can be seen as a quicker and easier arrangement than providing a collateral warranty, or relying on the provisions of the Contracts (Rights of Third Parties) Act. However, it is important to ensure that the letter is carefully drafted and that the correct details are entered. Whether the result of a reliance letter is simply a common law duty to use reasonable skill and care, or whether it amounts to a contract between the parties that may introduce a greater duty will depend on the wording of the letter.

	There are four essentials of a contract:		There are four essentials of a contract: