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What is Building and Construction Law?
Building and construction law is specialized legal field that deals with engineering and building related issues. It draws perspectives from contract laws, commercial laws, planning laws, environmental laws etc. It covers a wide range of issues which can be summarized under the following heads:
Terms of contract
A contract is an agreement entered into voluntarily by two parties, each of whom intends to create one or more legal obligations between them. A contractual term is a part of a contract. Each term gives rise to an obligation which both the parties have to fulfill. Failing to observe the terms of a contract can give rise to litigations. A building contract consists of three legal documents:
- The building contract itself
- Drawing and plans
Negligence refers to any fault on the part of the builder, conce
ing the building materials or the building plan. Home owners can bring civil litigation against anyone involved in the construction of the building. Negligence can be of various types such as criminal negligence and gross negligence etc.
Bonds and bonding
Construction bonds refer to special kind of bonds utilized in construction projects. They are usually utilized by investors to protect their investments against any kind of disruption or failure to complete the project due to the insolvency of the builder. The parties involved in securing the construction bond:
- The party involved in the building process are
- The investors
- And the security company that backs the bond.
Tendering refers to the procurement of goods and services from exte
al sources. A request for a tender is a structured invitation to vendors to supply products and services. For instance, a gove
ment may put out a tender for building construction. A builder or a contractor who quotes the highest bid gets the tender.
Guarantees and sureties
Guarantees and sureties are financial terms. They refer to a type of financial promise made by a party to assume debt obligation of a borrower if he defaults. Guarantees and sureties are common in building construction projects where banks often ask for a guarantor before releasing necessary finances for a particular building project.
A lien is a form of security interest granted over a property in order to get the payment of a debt or performance of some other obligation. A security interest is the property which is mortgaged. There are two types of property: real property and personal property. Real property is the land and the buildings attached to it, while personal property includes anything other than land.
A construction claim is the entitlement that is received by a party when certain damage has taken place. For a recovery under a construction claim, a person must have both legal entitlements and damages.
A consulting contract is a legal term often used to describe a contract between a client and a consultant who is hired to provide professional consultation services on the construction of a building.
These were some of the major issues dealt by building and construction law. Everyone who is involved in engineering and construction businesses such as engineers, contractors, laborers etc. and all the different types of dispute related to constructions, leases of land, ownership conflicts and accidents due to faulty materials are also dealt by construction and engineering laws.
Building and Construction Laws in Europe and the US
Countries like, UK, US, Canada and South Africa have their own set of building and construction laws. A brief description is given below:
- In United Kingdom and in Europe, there are societies of construction laws which deal with construction related disputes.
- In US and in many other countries, a standard form contract approach is followed when it comes to buildings and constructions. A standard form contract is a bipolar agreement whereby the terms of the contract are set by one of the two involved parties. The other party is simply supposed to take it or leave it.
- In America, such forms are produced by the American Institute of Architects. It has been producing such contracts from 1888. However, they are revised every 10 years. Recently, such contracts have come under scanner for being unfavorable to contractors. As such they now follow the Consensus Docs Coalition which publishes 100 contract documents taking the interests of the contractors in account.
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