JBCC PRINCIPAL BUILDING AGREEMENT CLAUSE 02

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Question:

An invitation to tender was advertised and in due course the successful tenderer was
informed in writing of the acceptance of his offer and requested to submit the
documentation required as stated in the invitation. The contractor failed to provide the
Construction Guarantee as elected by him and did not appear on site on the date set for
the handover. The contractor later informed the employer that he was unable to raise
the guarantee and submitted a letter from his attorney stating that a contract was not,
as yet, in existence and therefore the contractor was not in breach. Is this the case and
how do we determine if a contract does or does not exist?

Reference: P02.001

Answer:

The issue of whether a contract does or does not exist can become very complex but a
reasonable quick guide is look at the provisions that give either party the right to terminate
(cancel) the Agreement:

36.1.1 Fails to comply [3.3, 14.1, 15.1.1-2]

36.1.2 Refuses to comply with a contract instruction

15.1 .....the contractor shall submit .....

38.1.5 Give possession of the site...

None of the above provisions could occur or be enacted without a legal agreement being in
existence.