Ireland: Hot Topics In Construction Law: Spring 2019

Last Updated: 1 May 2019
Article by Mary Liz Mahony, Brian Gillespie and Ciara Dooley

Does your contract say what you think? When and how can you enforce under a performance bond? How do you manage the Brexit minefield? These are some of the hot topics crossing the desks of the construction team at Arthur Cox. In this update, we bring you our take on these current issues...

Does your contract say what you think: is the devil in the detail?

Construction contracts typically comprise a number of separate documents which, when taken together, constitute the entire contractual agreement between the parties. While parties will normally heavily negotiate the bespoke terms and conditions of their contract and ensure that the terms reflect the agreed risk allocation and obligations, the same attention is not always given to the schedules, appendices and other technical documentation which complete the contract documents.

Factors such as time or cost constraints may result in documentation being attached to a contract in a poorly presented, haphazard manner, and without the parties being fully aware of the effect of that documentation on their respective contractual obligations. In addition, documents which should have been included are left out and other documents are inadvertently included. This can easily lead to inconsistencies between documents.

It is often assumed that the inclusion of a 'priority clause' (such that negotiated terms take priority over general terms or conditions or technical documentation) is sufficient to reconcile such inconsistencies. However, a recent case gives a clear warning to those parties who fail to fully understand the manner in which the general obligations of the contract will interact with the specific technical documentation and, critically, whether both aspects are consistent.

In Clancy(1), E.ON employed Clancy Docwra Limited ("Clancy") to carry out groundworks using an amended JCT Sub – Contract. Clancy encountered adverse ground conditions (including an obstruction to the proposed route of works) which led to a dispute as to whether Clancy bore the risk of such ground conditions or were entitled to payment of additional sums to complete the works.

E.ON relied on their bespoke amendments to the sub-contract which passed the risk of ground conditions to Clancy. Clancy relied on tender documentation appended to the sub-contract which detailed the route of the works and showed that the tender did not contemplate dealing with obstructions. Despite bespoke amendments, and a clause giving priority to those amendments, Clancy escaped liability for ground conditions because of the scope of work described in tender documentation appended to the sub-contract.

This case clearly flags the difficulties which can arise where schedules and other technical documentation are appended to a contract without the parties carefully reviewing their contract and understanding the impact of technical documents on risk allocation.

How secure is your security: Update on Performance Bonds

While the requirement to provide a performance bond is standard on most significant construction projects, calls on performance bonds are relatively infrequent. Parties will, in general, do all they can to avoid calling in a surety unless something has gone very wrong. As such, there can be uncertainty as to how and when a performance bond can be called and what evidence is needed to satisfy a surety that monies should be paid.

While individual bonds will turn on their wording, the wording found in many bonds provide: "The Guarantor shall...satisfy and discharge the losses and damages sustained by the Employer as established and ascertained pursuant to and in accordance with the provisions of or by reference to the Contract..." This wording has been recently considered in Ziggurat(2) in the UK.

In Ziggurat, it was found that this wording does not mean an Employer is required to obtain a court judgment or arbitration award in order to trigger a claim under a bond. The Court held that what is required is that the Employer has completed the ascertainment exercise required by the particular building contract – "Any other result would destroy the commercial value and purpose of the Bond". The Court also found that while it may be open to the surety to challenge the quantum of the claim this too, would depend on the wording of the Contract and whether it contained any "conclusivity provisions" in relation to the ascertainment exercise.

While Ziggurat is only of persuasive authority in Ireland, it is very useful when considering the impact of adjudicator's decisions on performance bonds. Adjudicator's decision are becoming increasingly common and Ziggurat clearly supports the proposition that such decisions should be sufficient for establishing an entitlement under a performance bond even if this is not explicitly stated in the bond. Given this, parties will often go further and agree to specifically call out an adjudicator's decision as providing conclusive evidence of an entitlement under a bond. While such wording is helpful to the Employer (as it will prevent the surety challenging the quantum of the claim), a surety will often insist that repayment provisions are included in the bond should the adjudicator's decision later be reversed on final determination. Such repayment provisions will create a direct obligation between the Employer and the surety and should be carefully considered by both parties.

Allocation of risk: How to navigate the Brexit minefield?

As Brexit (still) looms, there are increasing concerns about what Brexit will look like, its impact on the construction industry and associated risks, including the potential costs and delays arising from imports, exchange rates and regulation. There are a lot of unknowns as to how Brexit may impact the industry generally, or a specific project in particular and incorporating a "Brexit clause" into your contract may help. The key question to consider is how you wish to deal with the risks associated with Brexit (and the answer to this question may not be the same every time). Should there be a risk sharing or should one or other of the parties shoulder additional costs and delays which may arise?

While, from an Employer's perspective, it might look attractive to push this risk onto the Contractor, this approach may not give the best outcome or be either reasonable or practical, requiring the Contractor to build a significant contingency into the contract price. Some form of risk share may provide a more reasonable solution, and leaves it open to the parties to develop a dialogue in circumstances where Brexit does have an impact on the particular scope of works, whether through additional costs, delays or shortages of labour and materials. In addition to these considerations, sharing the burden of Brexit could also include agreed trigger events, notification procedures, consequences and remedies.

For parties who currently have construction contracts in place, it may be worth reviewing contracts to assess how Brexit may impact on specific projects; for example, what are the implications of delays to the project and how are damages for delay set out. If you are entering into a new contract now, it would be prudent to consider the specific implications which Brexit may have on the project. This can be done by including a provision expressly dealing with the Brexit-related risks, which will ensure that the parties have a clear mechanism which they can revert to when assessing the impact it may have on cost and time, while also providing at least some certainty!


1 Clancy Docwra Limited v E.ON Energy Solutions Limited [2018] EWHC 3124 (TCC)

2 Ziggurat (Claremont Place) LLP v. HCC International Insurance Company Plc [2017] EWHC 3286 (TCC)

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions