Construction law is a branch of
law
Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior, with its precise definition a matter of longstanding debate. It has been variously described as a science and as the ar ...
that deals with matters relating to building
construction
Construction are processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design that continues until the a ...
,
engineering
Engineering is the practice of using natural science, mathematics, and the engineering design process to Problem solving#Engineering, solve problems within technology, increase efficiency and productivity, and improve Systems engineering, s ...
, and related fields. It is in essence an amalgam of
contract law
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more Party (law), parties. A contract typically involves consent to transfer of goods, Service (economics), services, money, or pr ...
,
commercial law
Commercial law (or business law), which is also known by other names such as mercantile law or trade law depending on jurisdiction; is the body of law that applies to the rights, relations, and conduct of Legal person, persons and organizations ...
,
planning law,
employment law
Labour laws (also spelled as labor laws), labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship be ...
and
tort
A tort is a civil wrong, other than breach of contract, that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with cri ...
. Construction law covers a wide range of legal issues including contract, negligence,
bonds and bonding, guarantees and
sureties,
lien
A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...
s and other security interests, tendering, construction claims, and related consultancy contracts. Construction law affects many participants in the construction industry, including
financial institution
A financial institution, sometimes called a banking institution, is a business entity that provides service as an intermediary for different types of financial monetary transactions. Broadly speaking, there are three major types of financial ins ...
s,
surveyors,
quantity surveyors,
architects
An architect is a person who plans, designs, and oversees the construction of buildings. To practice architecture means to provide services in connection with the design of buildings and the space within the site surrounding the buildings that h ...
,
carpenters,
engineers
Engineers, as practitioners of engineering, are professionals who invent, design, build, maintain and test machines, complex systems, structures, gadgets and materials. They aim to fulfill functional objectives and requirements while consider ...
,
construction workers, and
planners.
Specific practice areas
Construction law builds upon general legal principles and methodologies and incorporates the regulatory framework (including security of payment, planning, environmental and building regulations);
contract
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...
methodologies and selection (including traditional and alternative forms of contracting); subcontract issues;
causes of action, and liability, arising in contract,
negligence
Negligence ( Lat. ''negligentia'') is a failure to exercise appropriate care expected to be exercised in similar circumstances.
Within the scope of tort law, negligence pertains to harm caused by the violation of a duty of care through a neg ...
and on other grounds; insurance and performance security; dispute resolution and avoidance.
Construction law has evolved into a practice discipline in its own right, distinct from its traditional locations as a subpractice of
project finance,
real estate or corporate law. There are often strong links between construction law and
energy law and
oil and gas law.
Some of the major areas a construction lawyer covers are:
*
Alternative Dispute Resolution
**
Arbitration
Arbitration is a formal method of dispute resolution involving a third party neutral who makes a binding decision. The third party neutral (the 'arbitrator', 'arbiter' or 'arbitral tribunal') renders the decision in the form of an 'arbitrati ...
**
Dispute review boards (or other third party reviews)
**Mediation
**Structured negotiations
*Bankruptcy issues for contractors, owners, suppliers, etc.
*Bidding (tendering) disputes
*
Building
A building or edifice is an enclosed Structure#Load-bearing, structure with a roof, walls and window, windows, usually standing permanently in one place, such as a house or factory. Buildings come in a variety of sizes, shapes, and functions, a ...
and other permits
*
Building information modeling
Building information modeling (BIM) is an approach involving the generation and management of digital representations of the physical and functional characteristics of buildings or other physical assets and facilities. BIM is supported by vario ...
*
Contract law
A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more Party (law), parties. A contract typically involves consent to transfer of goods, Service (economics), services, money, or pr ...
**
Change Orders (Variations)
**Construction claims
**
Construction liens
**Wage requirements (
Davis-Bacon Act of 1931, etc.)
**Payment and
Prompt payments acts
**Extensions of time
**Drafting construction contracts
**Industry-standard construction contracts
**Negotiating construction contracts
**Negotiating a termination claim, whether for convenience or for default
*Defective design or construction
*Delays and acceleration
*Employment Law including Immigration
*Environmental matters in construction
*
False Claims Act(s)
*Fire codes and regulations
*Fulfilling regulations for non-discrimination or other social impact legislation
*Insurances issues
**Damage, liability
**
Indemnification
**
Surety
In finance, a surety , surety bond, or guaranty involves a promise by one party to assume responsibility for the debt obligation of a borrower if that borrower defaults. Usually, a surety bond or surety is a promise by a person or company (a ''sure ...
Law (Payment and Performance Bonds)
*Labor issues and strikes
*Licensing construction professionals
*
OSHA, and other federal agencies
*Overinspection
*Project delivery systems, such as design-bid-build,
Design-Build, Construction Manager (CM) at Risk or Agency CM
*Provide defense to businesses facing administrative actions such as delisting (loss of bid listing)
*Provide legal counsel
*Public construction
**Federal construction under FAR or other regulated procurements
**State contracting procedures
*State and local building codes
*Sustainable construction, e.g.
LEED
*Litigation: trying construction cases in court
*Violations, safety or other regulatory
Construction contracts
Although no special contract formalities are required, it is normal practice to use standard-form contracts such as, in the UK, the
Joint Contracts Tribunal (JCT) form. In order to expedite dispute resolution, standard forms have often provided for arbitration by a "board of arbitration" or professional arbitrator, although many now offer a choice between arbitration and litigation. Construction law has been affected by the requirements in public contracts, which include surety bonds and other procedures. In private contracts, the requirements are negotiated between the parties. As of 1998, the principles of construction law were "well established". Remedies for
breach of contract
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other part ...
are the same as in the ordinary law, and include
damages
At common law, damages are a remedy in the form of a monetary award to be paid to a claimant as compensation for loss or injury. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. To be recognized at ...
,
repudiation,
rescission, and
specific performance
Specific performance is an equitable remedy in the law of contract, in which a court issues an order requiring a party to perform a specific act, such as to complete performance of a contract. It is typically available in the sale of land law, b ...
.
Country-specific contract practice
Australia
The standard form construction contracts used in Australia include the
Australian Building Industry Contracts (ABIC), the
Standards Australia contracts, the Australian Defence Contracting Suite of Tendering and Contracting (AUSDEFCON) and the GC21 government contracts form.
Canada
In Canada, the law requires money for work done to be paid in
trust.
South Africa
The standard form construction contracts in use in South Africa include
FIDIC, the
New Engineering Contract (NEC), the
General Conditions of Contract for Construction Works (GCC) and
Joint Building Contracts Committee (JBCC) agreements.
United Kingdom
The JCT works on the most popular type of standard construction contracts and the latest suite of contracts from the JCT are the 2024 editions. The form of contract most favoured by public bodies is the NEC contract suite.
In the UK, specific requirements relating to payments and adjudication provisions were introduced by the
Housing Grants, Construction and Regeneration Act 1996, and were subsequently amended in Part 8 of the
. These requirements are generally known as the Construction Act requirements. The requirements set out certain minimum provisions which must be included in any construction contract (as defined within the Act) and failure to comply with these requirements will cause the relevant provisions to be deleted and compliant provisions to be inserted in their place, which can lead to unexpected consequences for unsuspecting parties to a construction contract.
Although some see construction law as another form of general contract law, it is a very specialised area and most people requiring advice on construction law in the UK would seek advice from construction law specialists.
United States
Standard form contracts promulgated by the
American Institute of Architects
The American Institute of Architects (AIA) is a professional organization for architects in the United States. It is headquartered in Washington, D.C. AIA offers education, government advocacy, community redevelopment, and public outreach progr ...
have been the standard in the industry (insofar as building construction); the organization first published a form in 1888, and has over 200 forms, with revisions to selected forms happening typically every ten years.
[Klinger M. (2007)]
A New Era in Standard Form Construction Documents: a Rivalry Between the Old Guard American Institute of Architects And An Upstart Consortium Led by the Associated General Contractors of America
Sedgwick, Detert, Moran & Arnold LLP. However, these forms have been criticized as unfair to contractors in favor of owners and architects, which led to the publication of
ConsensusDocs standard contracts in September 2007. The ConsensusDocs Coalition includes 41 trade associations representing design professionals, owners, contractors, subcontractors and sureties in the design and construction industry. ConsensusDocs publishes more than 100 contract documents, addressing all methods of project delivery, and are written in the project's best interest versus one particular party. Engineering lead projects such as horizontal infrastructure use other standard form contracts such as those developed by the
Engineers Joint Contract Documents Committee (EJCDC). Recently several other organizations have developed contracts for use such as the
CMAA (for projects using agency
construction management) and the
Design-Build Institute of America for projects using
Design–build.
Deviation
When a plan has been adopted for a building, and in the progress of the work a change is made from the original plan, the change is called a "deviation". When the contract is to build a house according to the original plan, and a deviation takes place, the contract shall be traced as far as possible, and the additions, if any have been made, shall be paid for according to the usual rate of charging.
Construction law organizations
United States
The Forum on Construction Law of the
American Bar Association
The American Bar Association (ABA) is a voluntary association, voluntary bar association of lawyers and law students in the United States; national in scope, it is not specific to any single jurisdiction. Founded in 1878, the ABA's stated acti ...
established in 1973 is the largest organization of construction lawyers in the United States.
The group includes law firms of every size, solo practitioners, in-house and government counsel, non-lawyers such as, construction professionals and the public sector representatives. Forum members include those of owners, developers, design professionals, contractors, subcontractors, suppliers, construction managers, lenders, insurers and sureties.
United Kingdom and other
In the United Kingdom, there has been an active Society of Construction Law since 1983, and there is now a European Society of Construction Law, and Societies of Construction Law in Australia, Hong Kong, Singapore, and the UAE.
See also
*
Mechanic's lien
A mechanic's lien is a security interest in the Title (property), title to property for the benefit of those who have supplied labor or materials that improve the property. The lien exists for both real property and personal property. In the realm ...
*
Construction management
*
Planning permission
References
External links
*
American construction news and resources website
{{DEFAULTSORT:Construction Law