Contractors, Designers and Clients need to understand the important role landscape contracts play in underpinning quality, equity and profits and why their use and misuse is harming the sector.
Successful landscape projects are those which are delivered to an agreed design, required quality standards and specification, safely and within the approved budget and timeframe. Effective project management seeks to ensure that these objectives are achieved and this is aided by the signing of a contract between the landscape contractor and the client.
The issue of contracts within the wider construction industry is topical at the moment with the introduction of the Construction Contracts Act 2013 by the government in the summer of last year. The Act aims to tackle the issue of non-payment to small contractors who have completed works as agreed. This has been a key issue that has burden the landscape industry, and indeed the wider construction industry for many years. Time will tell if this Act will have any positive effect to ensure that landscape sub-contractors are paid what they are due on time. Historically, landscape contractors have always had issues receiving payment for their work as landscaping is the last operation on site and therefore the landscape contractor is the last person to submit their invoice. Also if the main building works run over budget it is often the landscape budget that is cut in order to attempt to get the project back on track. This can also lead to the removal of certain elements of the landscape design, resulting in the reduction in the scope and value of works to be carried out by the landscape contractor.
While the Act will hopefully assist with the cash flow of contractors through quicker payments, its success will be largely dependent on the presence and acceptance of a contract between all parties involved. A typical landscape contract will often comprise a number of different documents. These can include the landscape drawings, associated specifications, a statement of the final accepted tender sum, a priced bill of quantities and the conditions of contract. While all of these documents have a role to play, the conditions of contract is an important document, not because it says what works the contractor has to carry out, but because it sets out the rules agreed between the landscape contractor and the client as to how and when the work is done, and what payment the contractor will receive and when. The conditions also deal with matters such as terminating the contract, dispute resolution and insurance.
The formation of a contract involves acceptance of an offer, an intention to have a legally binding agreement, performance and payment. For landscape contractors operating in the private domestic sector contracts are mainly made by word of mouth or by conduct. However if a dispute arises prior to the project being finished, it is difficult to prove what was to be carried out by each side unless some form of record has been kept. The importance of written records cannot be overemphasised, as these are usually the only evidence of what exactly had been agreed. Once these terms are incorporated, they reduce the likelihood of disputes which can, in turn, lead to legal action. In order to succeed in an action in contract, the burden of proof rests on the claimant to show that on the balance of probabilities, his or her case is valid. As it is more often than not the landscape contractor making a complaint against a client, it is very important that a record of the deal struck by the parties, the details of the work, and the rights and obligations of the parties are clearly expressed in writing.
As there is no specific contract in Ireland for landscape projects, the two principal groups of standard contracts under which landscape projects are carried out are the RIAI Standard Forms and the GCCC Public Works Contracts. The RIAI contracts are published by the Royal Institute of Architects in Ireland while the GCCC contracts are published by the Government Construction Contracts Committee. These contracts are used where the landscape contractor is the main contractor.
Unfortunately on the majority of large scale residential and commercial landscape projects, the landscape contractor is generally a domestic subcontractor meaning that they are employed and paid by a main contractor to carry out the required landscape works as part of the overall project. In order to ensure that the landscaper is fully aware of his responsibilities, there is typically a ‘subcontractor agreement’ between the landscape contractor and the main contractor. This agreement is usually drawn up by the main contractor and sets out the scope of the works to be completed and the expectations regarding that work. It is common for main contractors to amend the standard contracts to suit themselves. They take out the clauses that do not suit them and replace them with their own preferred clauses. Breaches of this agreement may lead to legal action with financial consequences.
Forms of contract
In the UK, the Landscape Institute produce a suite of standard forms of contract and associated documents for commercial and domestic landscape projects. Know as the JCLI Contracts, these cover four different areas of landscape works and have proved to be a success from both the contractor’s and the client’s point of view. They are also of huge benefit to the landscape architect or garden designer as the conditions of contract deal with all areas of the works, from the project beginning right through to the final account. The four areas they cover are traditional landscape works, landscape maintenance works, landscape works, landscape works with contractor's design and works carried by contractors when directly employed by the homeowner. These contracts are very detailed and set out the conditions very clearly.
Another popular contract in the UK is the JCT Minor works contract. This is a very simple yet effective document and is regularly used on small projects. Having used this contract in the past I have found it to be very straightforward for both the client and the contractor. Both in the UK and north of the border, a number of landscape practices use another contract called New Engineering Contract (NEC3) for landscape construction projects. Although it originates in the civil engineering sphere it can be adapted to different situations for use with landscape contracts. It is beginning to become popular with local authorities in the UK; landscape elements of projects are becoming more linked to light civil engineering works as landscape contractors become more sophisticated and diverse in the operations they carry out and the services they provide.
Growth through contracts
In order to grow and mature, the Irish landscape industry needs to have a specific contract to deal with both landscape construction and maintenance projects. Having such a document would need to be accepted and implemented, not just by the contractors and designers working directly within the landscape industry but also by other professions such as Architects, engineers and quantity surveyors. If such a document were to become the norm, many of the problems within the industry such as not building to specification and lack of certification would be eliminated, creating a healthier and more positive environment across the entire industry for every profession involved in it.
Benjamin Franklin coined the proverb ‘an ounce of prevention is worth a pound of cure’. This holds especially true when it comes to your business. Anything that hinders your delivery of the best possible service adversely affects your business. Disputes with clients, be they homeowners or main contractors, are perhaps the worst hindrances. While contractors are historically frightened of paperwork and bureaucracy, they should not fear entering into a well-balanced and fair contract. Using properly prepared and equitably written contracts can protect you from client disputes, which will make your business more gratifying and more profitable.