Common use of Retention monies Clause in Contracts

Retention monies. ▇▇▇▇▇ claim for what it termed retention monies in the sum of $98,311.20 being sums due under the contract for work already done but not billed but left on account with Blue Sand for the purpose of remedying any defects in construction. They claim this less a reduction for legitimate defects estimated at $25,000.00 [55] In law retention monies only become due and payable if the period agreed upon for remedying defects has expired and there are no defects. If defects are found and not remedied by the contractor then the owner is entitled to use the retention monies towards putting right these defects. See Emden’s op.cit p. 129 para. B. Thus this issue must await our determination on defects. [56] Is Blue Sand entitled to damages for remedying alleged defects? [57] As a result of defects in construction alleged to have been found when they entered into possession in or about January 2010 Blue Sand claim damages of $1,104,747.37 for remedial works. To establish their claim they relied on the evidence of ▇▇▇. ▇▇▇▇ and several expert witnesses- ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ (Pools), Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, who testified to defects found and costs of remedying them . ▇▇▇. ▇▇▇▇ catalogued some of the defects allegedly found in photographs which she submitted to the court, which ran the gamut from leaking roofs, leaking swimming pools, slippery stone floors ,so called “disco lights” because of their intermittent flashing,(▇▇▇. ▇▇▇▇ had seemingly retained her sense of humour) peeling paint to termites in cabinets and destruction of plants. Additionally Blue Sand alleged that the villa evidenced defects to the electrical, plumbing, mechanical and other systems. [58] Before I go further I note that ▇▇▇▇▇ through ▇▇. ▇▇▇▇▇ in her oval evidence has accepted liability for defects and therefore no issue arises. [59] The law Before I consider the several areas of alleged defects it is helpful to look at a contractor’s obligation in law as this contract made no express reference to the duties imposed on the contractor and therefore we must imply the common law duties to give commercial effect/efficacy to the contract. [60] In law, the contractor has a dual obligation to carry out and complete the works in accordance with the contract. See ▇▇▇▇▇▇’▇ Building and Engineering Contracts 11th ed. Vol. 1 para 4 – 003. And where owner’s designs are used, (as it was substantially in this case) then the contractor’s obligation is to complete to design. And in that case the contractor does not owe any duty in regard to its subsequent performance, safety, durability or suitability after completion provided the work has been carried out using proper standards of materials and workmanship in exact accordance with the design. See op.cit. para. 4.004. [61] However, where contractor design is employed the contractor has a duty to ensure that the design is practicable and reasonably fit for the particular purpose. See Building Contracts

Retention monies. ▇▇▇▇▇ claim for what it termed retention monies in the sum of $98,311.20 being sums due under the contract for work already done but not billed but left on account with Blue Sand for the purpose of remedying any defects in construction. They claim this less a reduction for legitimate defects estimated at $25,000.00 [55] In law retention monies only become due and payable if the period agreed upon for remedying defects has expired and there are no defects. If defects are found and not remedied by the contractor then the owner is entitled to use the retention monies towards putting right these defects. See Emden▇▇▇▇▇’s op.cit p. 129 para. B. Thus this issue must await our determination on defects. [56] Is Blue Sand entitled to damages for remedying alleged defects? [57] As a result of defects in construction alleged to have been found when they entered into possession in or about January 2010 Blue Sand claim damages of $1,104,747.37 for remedial works. To establish their claim they relied on the evidence of ▇▇▇. ▇▇▇▇ and several expert witnesses- ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ (Pools), Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, who testified to defects found and costs of remedying them . ▇▇▇. ▇▇▇▇ catalogued some of the defects allegedly found in photographs which she submitted to the court, which ran the gamut from leaking roofs, leaking swimming pools, slippery stone floors ,so called “disco lights” because of their intermittent flashing,(▇▇▇. ▇▇▇▇ had seemingly retained her sense of humour) peeling paint to termites in cabinets and destruction of plants. Additionally Blue Sand alleged that the villa evidenced defects to the electrical, plumbing, mechanical and other systems. [58] Before I go further I note that ▇▇▇▇▇ through ▇▇. ▇▇▇▇▇ in her oval evidence has accepted liability for defects and therefore no issue arises. [59] The law Before I consider the several areas of alleged defects it is helpful to look at a contractor’s obligation in law as this contract made no express reference to the duties imposed on the contractor and therefore we must imply the common law duties to give commercial effect/efficacy to the contract. [60] In law, the contractor has a dual obligation to carry out and complete the works in accordance with the contract. See ▇▇▇▇▇▇’▇ Building and Engineering Contracts 11th ed. Vol. 1 para 4 – 003. And where owner’s designs are used, (as it was substantially in this case) then the contractor’s obligation is to complete to design. And in that case the contractor does not owe any duty in regard to its subsequent performance, safety, durability or suitability after completion provided the work has been carried out using proper standards of materials and workmanship in exact accordance with the design. See op.cit. para. 4.004. [61] However, where contractor design is employed the contractor has a duty to ensure that the design is practicable and reasonably fit for the particular purpose. See Building Contracts