As CCDC has done in the past, after amending and updating CCDC 2, it will update other contracts in its suite of contracts, including ccDC 3 – Cost Plus Contract, CCDC 5B – Construction Management Contract – For Services and Construction, CCDC 14 – Design-Build Contract with Agreed Price and other commonly used contracts. This section of the new CCDC 2 also describes the conditions of early occupancy by the owner. An owner takes over part of the work at an early stage if this has been agreed by the contractor. In this case, the contractor is no longer responsible for this phase of the project and the warranty period begins specifically for the occupied part. In the event of a dispute, owners often want to withhold the contractor`s funds to cover the cost of their own planned claim against the contractor, but no version of CCDC 2 can “offset” the claims. Therefore, it is customary for owners to include compensation provisions in the additional conditions. Contractors should ensure that they accept these compensation provisions, which could result in non-payment for work completed in response to unproven property claims. Another consideration for parties negotiating set-off rights is the expected new construction law, which contains strict payment provisions. It is common for owners to include a “time is crucial” clause that makes it clear that the duration of the contract specified in the contract is significant and that delay is treated as a condition that allows the owner to terminate the contract and claim damages.
However, these clauses are difficult to enforce and lump sum damages (i.e. one penalty per day of delay) may be a better substitute. Owners and contractors should consider whether these provisions are necessary and how they could affect the performance of the work. The motivation behind the establishment of CCDC is to ensure impartial certainty of the rights of the parties involved in the process of a construction project. In addition, working with contracts can also mean a different perception when an alternative side of project teams is presented. CcDC 2 (2020) now recognizes that the contractor is responsible for the overall health and safety of the project, even if the owner engages other contractors by removing the old AoM 3.2.2. However, ccDC 2 (2020) now requires both parties to comply with health and safety regulations. Thus, the owner is now also responsible for compliance with the contractor`s health and safety precautions and programs by his other contractors and his own staff. Many users of CCDC contracts have developed their own amendments and additional terms and conditions for CCDC model contracts. These need to be reviewed and updated, both in terms of consistency with new definitions and concepts and some of the section references that have changed. In some cases, owners may want to formulate a specific performance standard that they expect contractors to meet.
The purpose of these clauses is to increase the required work standard from an ordinary contractor to a contractor with specific skills and knowledge. Owners should determine whether these types of clauses are appropriate, and contractors should have them reviewed to ensure that they are not being complied with at a higher level than expected. Company Information – Legal structure, financial reference, contractual security reference, insurance reference, health and safety, evaluation of the planned construction for the current year and actual value for the last four years. The pricing mechanism for subcontracting amounts must now be approved by the owner, and deposits cannot be claimed if they have been lost as a result of negligent acts or omissions of the contractor. As one of the widely used contract document formats in Canada (estimated at 15,000 uses per year), CCDC 2 or “Stipulated Price Contracts” is the traditional contract between the owner and the prime contractor that provides a “lump sum” for the project. It essentially describes the administrative requirements and processes at a high level for projects in the construction industry. On April 19, 2021, PMIT Toronto`s construction community will hold a virtual session to discuss the pleasant and uncomfortable changes to CCDC 2 and their impact on the operation of contractual obligations. We encourage you to attend this event to learn more about these changes through our panel, which is made up of leaders who have played an influential role in achieving these transformations.
In December 2020, the Canadian Construction Documents Committee (CCDC) released an update to CCDC`s Stipulated Price Contract 2, the most widely used construction contract in Canada. Most of the changes were implemented after a survey of industry stakeholders, including contractors, consultants and owners. The objective of the changes was to limit the ever-increasing additional conditions and to adapt the contract to the current requirements of construction law. While there are a variety of changes, we believe the most significant changes have been made to the payments area, insurance requirements under CCDC 41, and a significant new milestone in the Takeover Ready project. In the event of a dispute, the indemnification and waiver provisions are the most critical terms of the entire contract. Therefore, owners and contractors should carefully review these sections. This is especially true in light of the fact that the new CCDC 2 – 2020 amended both clauses by changing the limitation period, imposing new restrictions on liability for damages, and changing the claims rules. Owners and contractors who frequently use the stipulated price agreement CCDC 2 may have developed their own additional terms. Any additional terms used for CCDC 2 must be reviewed and updated to comply with the updated contract form.
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