Construction contracts and construction law could be a minefield. However final accounts (including for the needs of this document last certificates) draw a line of sorts under the contractual duties owed by the parties to a contract to one another. As usual the answer depends on what the sub contract basically says. However , frequently under standard forms, and especially JCT forms, final accounts also finalise (subject to formal proceedings) disputes under the contract "normally those coming from valuations, quality of work and calls on extensions of time and loss and/or expense. That is why clauses dealing with final accounts often impose on the parties ' conclusivity unless objection is made inside a prescribed period. If you don't fight the areas you don't agree with it may well be too late to debate these points. Disputing parts of the final account means in effect either adjudication or arbitration.
It is due to the possible dreadful effect of the conclusivity of such final accounts that sub contractors (and contractors) must be alert to their issue. If they do not agree with the account they must make sure that they make the mandatory moves under the applicable clause to take issue with the account or at a minimum those parts with which they disagree "or they could find the account is binding.
However there are certain steps that are a condition case law to the issue of a valid final account. If it is not valid then it can not be definitive. There are two vital areas:
First off It is going to be rare nowadays for a contract to be finished and for there to be no defects notified in accordance with the contract. Where defects are so alerted under the primary contract then a certificate of making good defects needs to be issued. The courts have held in such circumstances that until the certificate of making good defects has been issued there may be no last certificate. Sometimes the same will be true of sub contracts.
Secondly, where the contract has been delayed the courts have been extremely clear about the extension of time issue. Here they have said that where practical completion occurs after the contractual completion date two things must occur before the final certificate can be issued (or at least become definitive) "(i) there has to be a certificate of non-completion and (ii) the designer must have carried out and completed the contractual mechanism of fixing or confirming the revised date.
However best information always is this: if you do receive a last account/certificate you should usually deal with it as a matter of pressure or it may become binding. If in doubt "take guidance.
It is due to the possible dreadful effect of the conclusivity of such final accounts that sub contractors (and contractors) must be alert to their issue. If they do not agree with the account they must make sure that they make the mandatory moves under the applicable clause to take issue with the account or at a minimum those parts with which they disagree "or they could find the account is binding.
However there are certain steps that are a condition case law to the issue of a valid final account. If it is not valid then it can not be definitive. There are two vital areas:
First off It is going to be rare nowadays for a contract to be finished and for there to be no defects notified in accordance with the contract. Where defects are so alerted under the primary contract then a certificate of making good defects needs to be issued. The courts have held in such circumstances that until the certificate of making good defects has been issued there may be no last certificate. Sometimes the same will be true of sub contracts.
Secondly, where the contract has been delayed the courts have been extremely clear about the extension of time issue. Here they have said that where practical completion occurs after the contractual completion date two things must occur before the final certificate can be issued (or at least become definitive) "(i) there has to be a certificate of non-completion and (ii) the designer must have carried out and completed the contractual mechanism of fixing or confirming the revised date.
However best information always is this: if you do receive a last account/certificate you should usually deal with it as a matter of pressure or it may become binding. If in doubt "take guidance.
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