Our construction team looked at practical and legal considerations of managing material supply, ownership of materials and how to mitigate the effects of inevitable supply shortages. At the same time, this does not mean that the agreement must be complicated! A delivery contract can be simple and nevertheless contains all the necessary information. And if the quantity or type of inventory changes, you can get it in writing later. Our levelset employee lawyers have created a non-fault delivery agreement that can be used for a variety of jobs. In addition, the model is in MS Word, which allows you to adapt the form to your projects. If you file the work in writing, it should not be considered a burden. Instead, it should be seen as a first step towards a successful project. Due to the demand for materials, which will inevitably increase when more yards start to reopen, coupled with longer delivery times due to lack of work, plant closures and delays in the import and transportation process, customers can use advances to secure an order and avoid program delays, even if materials must remain out of site. When a client decides to do so, legal advice should be provided to ensure that a direct payment contract is entered into between the client, the contractor and the supplier, and that this guarantee is supported by an appropriate guarantee, such as a free movement certificate, which assigns ownership of the materials for payment. To mitigate these problems, customers, contractors, subcontractors and suppliers should discuss at an early stage the likely impact on the construction program and costs. Other procurement methods should be considered, for example. B the substitution of materials and the use of more local suppliers. In the case of future contracts, the parties may consider developing the specifications in the broadest sense to give them more flexibility in obtaining equipment, adding explicit language to deal with the effects of the epidemic and/or consider delaying the conclusion of the contract until the restrictions are lifted.
Each situation should be assessed on the basis of its facts, verifying the relevance of such events and verifying whether they restrict the supply of material. Many suppliers are finding it increasingly difficult to purchase materials with plant closures and border delays, or are unable to purchase some pre-agreed materials, as many countries are still completely blocked. These problems will continue when the blockage is slow due to a shortage of materials, as the supply chain tries to catch up. Clients and contractors are now focusing on how to continue implementing projects in the field or how to resume projects after the removal of public health measures that respond to Covid-19.
