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It is very common for disputes to erupt over the state and value of completed works at the time the contractor leaves a work site.

This is true whether you leave the site because you’ve completed your work, suspended work, been terminated, or simply abandoned work due to non-payment.

In any case you must carefully document the state of the works on the date you finished. Clients tend to become very creative about all the things they had to do after you left, and all the things you didn’t do before you left. That is because both create a back charge, and magically, all the money you were owed at the time you left is consumed until you are owed nothing, or perhaps even owe the client money!

Regardless of why you left the site or stopped work, you always want to be in a position where you can prove what was done and what wasn’t. If you can, you will protect the value of work and be able to argue for any unpaid amounts. When you leave, you should compile the following documents and send them to your client on the day you leave:

Photos

Be sure to time and date stamp the photos. Take a heap on your last day or near to your last day. The key here is to take wide shots showing a bulk of works, and also close shots of detailed work.

For example, if you’ve completed a roof, take a shot of the entire area from different angles. Then take separate ones of the downpipes and gutters. If you’ve done trenching, photograph the covered trenches in as wide a shot as possible and then shoot close-ups of any infrastructure you have installed - footings, cable ends, pits, drains and so on. Then create a log so that each photo has a description.

Scope

Go through your contract scope and tick or highlight all works completed as at the day you left. Also include the variations. Note in a separate colour any contract scope left incomplete. This way you have a record of completed, additional, and incomplete works all separated out. Send this to your client when you leave. If you have photographed the site properly the pictures should support your assessment.

Valuation

Going a step further, you should then value all three works: the completed contract scope, the variations, and the ‘uncompleted contract balance.’ This is very important, as the most heated arguments will be about the value of incomplete work; your client will always try to argue it is far greater than it really is.

Your valuation should be broken down in the same way as the contract scope, showing dollar value completed against each contract item. Also show a breakdown of the incomplete work, and send the valuations to your client.

Correspondence log

It is often helpful to create a log of all correspondence between you and your client up to the day you left. Often, clients will create correspondence about defects, back charges, and other matters and say these were sent to you. When you leave the site, you can list all correspondence received from the client and also send this to them. This will serve as a record of what you have in fact been sent.

In a dispute, your client will need to prove that the documents they say they sent you were in fact sent or received by you. Documents clients often say they sent include back charge notices, delay notices, and defects notices. This is done to bolster their case for more back charges and is an attempt to show that documents were contemporaneous, instead of being created much later.

Why you are leaving

Set out in summary form the reasons why you are leaving the site. Go into a lot of detail here, and break them up into separate specific reasons. A common one may be due to non-payment. Others may include safety issues, or a lack of proper variations authorisations or construction plans. There are many reasons why you may have to stop work. It is good practice to document these so that you can always point to what the world was like on the day you last carried out work.

The above approach is hardly ever followed, yet you leave the entire value of your work open to challenge if you fail to establish what it was worth in total on the day you last carried it out. Protect yourself - don’t make this all-too-common mistake.

 
  • Good advice but the point about abandoning the project due to non-payment raises some problematic issues. Many articles have been published on Sourceable about the dangers of potential contract repudiation. The warning is to follow any prescribed termination procedures to the letter and then get some good legal advice before packing up and leaving the job half way through!

  • How but both parties stop scewing each other and we have or get legislative requirements to ensure the protection of both parties….including that of standard termination clauses (maybe even national guildlines !!)…. I get frustrated with this as its clear in contract law that one party legally agrees to complete certain works while the other legal agree to suitable reimburse in a certain time frame. Its can be as simple as buying an apple from the local grocer…

    As with the above each situation is a different senerio and each needs a specific path… as leaving site finished vs thru non payment is like comparing a loss to your spouse vs running off with your best mate… ppffttt Good article and reminder though….

  • Under any circumstances the advice is good advice. Agree though that legal opinion is a must about terminating a subcontract . Subcontracts in this day and age should be closely vetted and clauses that offend should be struck out before and all instructions if given verbally confirmed on writing . No verbal agreements . QLD's amended BCIPA 2014 is hopefully about to be speared.

  • This is a timely reminder of a very important concept.

    I would imagine that documentation is not always top of everyone's mind but you do need to protect yourself on the way out.

Lovegrove Solicitors – 300 x 250 (expires Dec 31 2017)
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