Step-in rights in construction contracts - Revision history

Designing Buildings at 09:55, 14 September 2020

2020-09-14T09:55:22Z

← Older revision		Revision as of 09:55, 14 September 2020
Line 11:		Line 11:
	As the beneficiary of step-in rights may lack the necessary expertise to take on the role of the other party, step-in rights may include provisions for the beneficiary to nominate another party to take on their role, sometimes with a guarantee from the beneficiary. For example, a funder may wish to dispose of the development, or to appoint a new developer to complete the project.		As the beneficiary of step-in rights may lack the necessary expertise to take on the role of the other party, step-in rights may include provisions for the beneficiary to nominate another party to take on their role, sometimes with a guarantee from the beneficiary. For example, a funder may wish to dispose of the development, or to appoint a new developer to complete the project.

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

	* Appointing consultants.		* Appointing consultants.
Line 27:		Line 25:
	* Termination.		* Termination.

−	[[Category:Property_law]] [[Category:Appointments]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Property_law]] [[Category:Appointments]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 17:15, 9 November 2017

2017-11-09T17:15:45Z

← Older revision		Revision as of 17:15, 9 November 2017
Line 1:		Line 1:
−
	Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there has been a serious breach of contract.		Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there has been a serious breach of contract.

−	Step-in rights can be used to enable a project to continue with one party being replaced by another. For example if the client becomes insolvent, the funder would be able to step into their position, complete the project and so potentially recover the money owed to them. This requires that the right is permitted through all relevant agreements, so that members of the project team cannot refuse to continue if the party is replaced. As a consequence, step-in rights frequently appear in collateral warranties, for example between funders and contractors or consultants, or, to protect against the contractor (or a ‘prime’ consultant) becoming insolvent, between clients and sub-contractors or sub-consultants.	+	Step-in rights can be used to enable a project to continue with one party being replaced by another. For example if the client becomes insolvent, the funder would be able to step into their position, complete the project and so potentially recover the money owed to them. This requires that the right is permitted through all relevant agreements, so that members of the project team cannot refuse to continue if the party is replaced.
		+
		+	As a consequence, step-in rights frequently appear in collateral warranties, for example between funders and contractors or consultants, or, to protect against the contractor (or a ‘prime’ consultant) becoming insolvent, between clients and sub-contractors or sub-consultants.

	Typically, step-in rights will require notice periods, so that, for example, if the contractor or consultants are not paid by the client, they must give notice to the funder before terminating the contract, allowing the funder time to decide whether to step into the client’s position. Such agreements may include provisions for the funder to pay costs during this notice period, whether the step-in right is exercised or not.		Typically, step-in rights will require notice periods, so that, for example, if the contractor or consultants are not paid by the client, they must give notice to the funder before terminating the contract, allowing the funder time to decide whether to step into the client’s position. Such agreements may include provisions for the funder to pay costs during this notice period, whether the step-in right is exercised or not.
Line 13:		Line 14:

	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Appointing consultants.
−	*Collateral warranty.
−	*Consultant's proposals.
−	*Construction contract.
−	*Management contract: tender works contracts.
−	*Repudiation.
−	*Request for proposals.
−	*Rights of third parties.
−	*Sub-consultants.
−	*Termination.

−	[[Category:Property_law]]	+	* Appointing consultants.
−	[[Category:Appointments]]	+	* Collateral warranty.
−	[[Category:Contracts_/_payment]]	+	* Consultant's proposals.
−	[[Category:Procurement]]	+	* Construction contract.
		+	* Difference between collateral warranties and third party rights.
		+	* Management contract: tender works contracts.
		+	* Repudiation.
		+	* Request for proposals.
		+	* Rights of third parties.
		+	* Sub-consultants.
		+	* Termination.
		+
		+	[[Category:Property_law]] [[Category:Appointments]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Designing Buildings at 07:34, 9 October 2015

2015-10-09T07:34:56Z

← Older revision		Revision as of 07:34, 9 October 2015
Line 1:		Line 1:

−	Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there has been a serious breach of contract.	+	Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there has been a serious breach of contract.

	Step-in rights can be used to enable a project to continue with one party being replaced by another. For example if the client becomes insolvent, the funder would be able to step into their position, complete the project and so potentially recover the money owed to them. This requires that the right is permitted through all relevant agreements, so that members of the project team cannot refuse to continue if the party is replaced. As a consequence, step-in rights frequently appear in collateral warranties, for example between funders and contractors or consultants, or, to protect against the contractor (or a ‘prime’ consultant) becoming insolvent, between clients and sub-contractors or sub-consultants.		Step-in rights can be used to enable a project to continue with one party being replaced by another. For example if the client becomes insolvent, the funder would be able to step into their position, complete the project and so potentially recover the money owed to them. This requires that the right is permitted through all relevant agreements, so that members of the project team cannot refuse to continue if the party is replaced. As a consequence, step-in rights frequently appear in collateral warranties, for example between funders and contractors or consultants, or, to protect against the contractor (or a ‘prime’ consultant) becoming insolvent, between clients and sub-contractors or sub-consultants.
Line 14:		Line 14:
	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
	*Appointing consultants.		*Appointing consultants.
−	*Appointment.
	*Collateral warranty.		*Collateral warranty.
	*Consultant's proposals.		*Consultant's proposals.
−	*~~Contract~~.	+	*Construction contract.
	*Management contract: tender works contracts.		*Management contract: tender works contracts.
	*Repudiation.		*Repudiation.
Line 25:		Line 24:
	*Termination.		*Termination.

−	~~[[Category:Contracts_/_payment]]~~
	[[Category:Property_law]]		[[Category:Property_law]]
	[[Category:Appointments]]		[[Category:Appointments]]
		+	[[Category:Contracts_/_payment]]
	[[Category:Procurement]]		[[Category:Procurement]]

Designing Buildings: moved Step-in rights to Step-in rights in construction contracts

2014-03-28T08:19:56Z

moved Step-in rights to Step-in rights in construction contracts

← Older revision

Revision as of 08:19, 28 March 2014

Designing Buildings at 12:59, 28 February 2014

2014-02-28T12:59:20Z

← Older revision		Revision as of 12:59, 28 February 2014
Line 1:		Line 1:

		+	Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there has been a serious breach of contract.

−	Step-in rights enable one party (the ~~beneficiary)~~ to ~~‘step in’~~ to the ~~shoes~~ of ~~another party in relation~~ to the ~~rights and obligations of~~ a ~~contract~~, ~~typically, if there has been a serious breach of contract. Clauses relating to~~ step-in rights ~~may be found~~ in ~~funding agreements, construction contracts~~, consultants ~~appointments~~ and ~~collateral warranties~~.	+	Step-in rights can be used to enable a project to continue with one party being replaced by another. For example if the client becomes insolvent, the funder would be able to step into their position, complete the project and so potentially recover the money owed to them. This requires that the right is permitted through all relevant agreements, so that members of the project team cannot refuse to continue if the party is replaced. As a consequence, step-in rights frequently appear in collateral warranties, for example between funders and contractors or consultants, or, to protect against the contractor (or a ‘prime’ consultant) becoming insolvent, between clients and sub-contractors or sub-consultants.

−	~~Step~~-in rights ~~can be used to enable a project to continue with one party being replaced by another. For~~ example if the client ~~became insolvent~~, the funder ~~would be able~~ to step into ~~their~~ position~~, complete the project and recover the money owed to them~~. ~~This requires that the right is permitted through all relevant~~ agreements~~, so that members of~~ the ~~project team cannot refuse~~ to ~~continue if~~ the ~~client is replaced. As a consequence,~~ step-in ~~rights frequently appear in collateral warranties, for example between funders and contractors~~ or ~~consultants, or, to protect against the contractor (or a ‘prime’ consultant) becoming insolvent, between clients and sub-contractors or sub-consultants~~.	+	Typically, step-in rights will require notice periods, so that, for example, if the contractor or consultants are not paid by the client, they must give notice to the funder before terminating the contract, allowing the funder time to decide whether to step into the client’s position. Such agreements may include provisions for the funder to pay costs during this notice period, whether the step-in right is exercised or not.

−	~~Typically, step-in rights will require notice periods, so~~ that~~, if for~~ example, the ~~contractor or consultants are~~ not ~~paid~~ by the ~~client~~, they ~~must give notice to the funder before terminating the contract, allowing the funder time to decide whether to~~ step into ~~the client’s~~ position. ~~Such agreements may include provisions for the funder to pay costs during this notice period, whether the~~ step-in ~~right is exercised or~~ not.	+	It is important to note that this is a right not an obligation. For example, the funder is not automatically liable for amounts owed by the developer, they will generally only step into their position and so accept their rights and obligations if they issue a step-in notice to that effect. Where step-in rights are included under third-party rights (which can only impose rights, not obligations) they must be conditional upon also accepting the associated obligations.

−	It is important to note that this is a right not an obligation. The funder is not automatically liable for amounts owed by the developer, they will generally only step into their position and so accept their rights and obligations if they issue a step-in notice to that effect. Where step-in rights are included under third-party rights (which can only impose rights, not obligations) they must be conditional upon also accepting the associated obligations.	+	As the beneficiary of step-in rights may lack the necessary expertise to take on the role of the other party, step-in rights may include provisions for the beneficiary to nominate another party to take on their role, sometimes with a guarantee from the beneficiary. For example, a funder may wish to dispose of the development, or to appoint a new developer to complete the project.
−		+
−	As the beneficiary of step-in rights may lack the necessary expertise to take on the role of the other party~~, or a funder may wish to dispose of the development, or to appoint a developer to complete the project~~, step-in rights may include provisions for the beneficiary to nominate another party to take on their role, sometimes with a guarantee from the funder.	+

	= Find out more =		= Find out more =

Designing Buildings: Created page with " Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there ha..."

2014-02-28T12:53:36Z

Created page with " Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there ha..."

New page

Step-in rights enable one party (the beneficiary) to ‘step in’ to the shoes of another party in relation to the rights and obligations of a contract, typically, if there has been a serious breach of contract. Clauses relating to step-in rights may be found in funding agreements, construction contracts, consultants appointments and collateral warranties.

Step-in rights can be used to enable a project to continue with one party being replaced by another. For example if the client became insolvent, the funder would be able to step into their position, complete the project and recover the money owed to them. This requires that the right is permitted through all relevant agreements, so that members of the project team cannot refuse to continue if the client is replaced. As a consequence, step-in rights frequently appear in collateral warranties, for example between funders and contractors or consultants, or, to protect against the contractor (or a ‘prime’ consultant) becoming insolvent, between clients and sub-contractors or sub-consultants.

Typically, step-in rights will require notice periods, so that, if for example, the contractor or consultants are not paid by the client, they must give notice to the funder before terminating the contract, allowing the funder time to decide whether to step into the client’s position. Such agreements may include provisions for the funder to pay costs during this notice period, whether the step-in right is exercised or not.

It is important to note that this is a right not an obligation. The funder is not automatically liable for amounts owed by the developer, they will generally only step into their position and so accept their rights and obligations if they issue a step-in notice to that effect. Where step-in rights are included under third-party rights (which can only impose rights, not obligations) they must be conditional upon also accepting the associated obligations.

As the beneficiary of step-in rights may lack the necessary expertise to take on the role of the other party, or a funder may wish to dispose of the development, or to appoint a developer to complete the project, step-in rights may include provisions for the beneficiary to nominate another party to take on their role, sometimes with a guarantee from the funder.

= Find out more =

=== Related articles on Designing Buildings Wiki ===
*Appointing consultants.
*Appointment.
*Collateral warranty.
*Consultant's proposals.
*Contract.
*Management contract: tender works contracts.
*Repudiation.
*Request for proposals.
*Rights of third parties.
*Sub-consultants.
*Termination.

[[Category:Contracts_/_payment]]
[[Category:Property_law]]
[[Category:Appointments]]
[[Category:Procurement]]