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Construction Contracts Legislation

Note: The Construction Manual requires review and update in light of new legislation. While it reflects the general process, references to specific legislation and templates may no longer be current.

Background

Under Part II of the Housing Grants, Construction and Regeneration Act 1996, construction contracts must make provision for payment and the adjudication of disputes in accordance with the Act.

If a construction contract does not comply with the requirements of the 1996 Act, the relevant terms of the Scheme for Construction Contracts (Scotland) Regulations 1998 apply.

Certain contracts are excluded from the application of the 1996 Act by the Construction Contracts (Scotland) Exclusion Order 1998.

The relevant legislation is available from the UK Legislation website:

Amendments to the Act and Scheme

Part II of the 1996 Act will be amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009.

The amendments are largely technical and are intended to improve payment practices within the construction industry by encouraging better cash-flow and to enhance the existing adjudication provisions where dispute arises.

The amendments require corresponding amendments to the Scheme for Construction Contracts in Scotland, on which we consulted in February 2011. Scottish Procurement Policy Note 1/2011 provides information on the consultation exercise. Where respondents gave permission for their responses to be made public, these were published on the Scottish Government's consultation webpages on 13 May 2011. We will publish an analysis of the responses shortly.

An order commencing the amendments to Part II of the 1996 Act the Local Democracy, Economic Development and Construction Act 2009 (Commencement No. 2) (Scotland) Order 2011 has been laid before the Scottish Parliament.

Amendments to the Scheme for Construction Contracts - the Scheme for Construction Contracts (Scotland) Amendment Regulations 2011 - and a new Exclusion Order - the Construction Contracts (Scotland) Exclusion Order 2011 - have been laid before the Scottish Parliament in draft. The relevant legislation is available from the UK Legislation website:

The Executive Notes relating to the above instruments and the final Business and Regulatory Impact Assessment appear below:

It is proposed that the amendments to Part II of the 1996 Act, amendments to the Scheme for Construction Contracts and the new Exclusion Order will take effect on 1 November 2011.