Think you have a construction contract? Well, think again.

For chemical engineers working as contractors in the design and construction of a plant, your contract is key to ensuring that your rights are protected. However, the lines are often blurred when it comes to which activities are covered by the Construction Act and which aren’t.

The Construction Act (also known as the Housing Grants, Construction and Regeneration Act) came into force in 1998. It fundamentally changed the nature of contracts in the construction industry, through the introduction of statutory implied terms regarding payment and rights to adjudication. These terms were introduced to address concerns that unfair payment practices were contributing to a high level of insolvencies in the construction sector.

What is a construction contract?

Now, if you are working on a new plant or structure, you should have a contract in place. Whether this is a construction contract as defined by the Construction Act (a contract for the carrying out of construction operations), depends upon the nature of works.

It’s in the definition of construction operations where confusion can arise as a number of activities within key industries are excluded.

What activities are excluded?

Drilling for, or the extraction of, oil and natural gas is explicitly excluded as a construction operation. Certain activities in relation to nuclear processing, power generation and the production of chemicals, pharmaceuticals, oil, gas or steel are also all excluded from the ambit of the Construction Act.

So what?

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