Bankruptcy issues in construction

The construction industry has one of the highest rates of bankruptcies and insolvencies of any industry in Canada.  According to statistics tabulated by the Office of the Superintendent of Bankruptcy, in 2013 in British Columbia alone, there was a shortfall …

Keep reading

The misunderstood Builders Lien

The subject of Builders Liens is much discussed, but little understood. Industry participants with considerable experience often still misunderstand many of the central rights and remedies provided by the legislation.

The following is intended as a primer (or …

Keep reading

Incorporation by reference

Most trade contracts incorporate “by reference” the terms and conditions of the prime contract.

Are these clauses effective? Short answer: not really.

The general rule of interpretation is that a trade contractor is only bound by the terms of the …

Keep reading

Release of holdbacks

An awful lot of cash sits every day in holdback accounts. That cash waits there, ever so patiently, until such time as somebody says or does the right things to have it released.

If you are an owner, this situation …

Keep reading

Canada: Legal basics of competitive bidding and procurement in Canada

The following represents a quick review of certain legal principles and case law associated with competitive bidding and procurement in Canada.

Firstly, any tendering process will create two contracts that bind the bidder and the owner. In an invitation to …

Keep reading

The first line of defence? Course of construction insurance and tort immunity

On most construction projects involving multiple contractors and sub-contractors, it is common for the owner or general contractor to obtain course of construction insurance (also known as “builder’s risk” insurance) to provide repair or replacement coverage for damage to the …

Keep reading

Understanding risks in warranties is crucial before signing any contract

Warranties form part of nearly every construction contract yet they remain poorly understood by many stakeholders in the construction industry. Despite this lack of knowledge, courts have had little hesitation in enforcing warranties. As a result, understanding the risk inherent …

Keep reading

B.C. Supreme Court affirms no third party claim lies where negligence claimed is attributable to the plaintiff

In Sun Life Assurance Company of Canada v. 482147 B.C. Ltd. Justice Butler considered an application to dismiss third party claims in a construction context on the basis that the claims were properly raised only as defences against the plaintiff. …

Keep reading

‘If-paid’ and ‘when-paid’ not finding favour with courts


If you are in the construction industry, you will have heard of the “pay-when-paid” clause and its evil twin, the “pay if paid” clause. Though widely used, these clauses remain controversial and are often confused.

While both of these …

Keep reading

Disclosure in multi-party litigation

Construction disputes often give rise to lengthy litigation, involving many defendants with varying interests. Some defendants may wish to defend the action in court, while others may want to negotiate a settlement.

In order to facilitate the partial settlement of …

Keep reading