Last edited 31 Oct 2016

Off site materials

It can sometimes be appropriate for the client to pay for items even though they remain ‘off-site’, for example, where a contractor has themselves made a large payment for plant or materials that have yet to be delivered to site, or if the client wishes to ‘reserve’ key items in order to protect the programme. Such items should be agreed in advance and listed in an annex to the contract bills.

Paying for off-site goods or materials can be useful, however, it does put the client at risk, for example if the contractor becomes insolvent and the items are then not delivered, even though payment has been made.

Several mechanisms are available to protect the client:

However, none of these methods is fool proof. For example, a vesting certificate may be of limited value in practice, as it is difficult to sue an insolvent contractor. Furthermore, despite best endeavours, items may simply be removed or disappear in the event of insolvency, or if there is a rumour that insolvency might occur. This is particularly true for items that have yet to be fabricated, items that have still to be worked on, or items that are abroad.

In a perfect world, items would be delivered to the site and affixed to the property before payment is made, but where this is not possible, a judgement is necessary to assess the risk to the project, or the potential loss to the client versus the cost of ensuring absolute certainty in relation to off-site goods.

See also: Materials on site.

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