Contract Administration I

Site Possession

Site possession
In every building contract, it is an implied term that
the employer will give possession of the site to the
contractor within a reasonable time when such date
is fixed.
Currently, most of the contracts have specifically
expressed it as one of contract provisions. Whether
it is the implied or express term, any failure by
the employer to give possession on the date
named is a breach of contract.
Surely, such failure shall cause extension of time
and it is a breach of major term of the contract. It is
because the contractor is unable to execute the
works without the possession.
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Site possession and access to site

The obligations of the parties to the contract from the very outset
are usually expressly stated in the standard conditions of
contract pertaining to commencement of works, site
possession/operations on site and access to site.
For example, under PAM 2006 , Clause 21.0 deals with the
date of commencement, dates of commencement given for
sections, postponement and completion date.
In the event where there are no express provisions in the
contract related to the above matters, a term will usually be
implied that the contractor must have possession of site in
sufficient time to allow him to complete the works by the
contract completion date: Freeman v Hensler [1900]. The
contractor has this implied right to site possession on the actual
date of commencement free of any encumbrances which will
affect the execution of the works.
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What is the meaning of site possession?

A couple of salient points should be taken note of pertaining
to this issue, namely:
In essence, possession by the contractor is a license
revocable by the employer at any time.
A license in legal parlance is permission or authority to
do something, e.g. to enter on land; this being a right to
do some act which would otherwise be a trespass. For
engineering and construction contracts, the
contractor is given a mere contractual license, i.e. to
occupy the site for the purposes of the contract: London
Borough of Hounslow v Twickenham Garden
Development Ltd. [1971]. It is not sufficient to create a
true tenancy.
Being a mere contractual license, it can be revoked at
any time by the employer or upon its lapse.
The revocation, if not legally justified, will render the
employer liable to the contractor for damages for
breach of contract, but subject to this the contractor
has no legally enforceable right to remain in
possession of site against the wishes of the
employer.
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What are the consequences if employer failed to give

possession?

The Employer should further protect himself by

drafting appropriate clauses covering eventualities
such as the right to postpone the giving of site
possession and the granting of the corresponding
extension of time to the contract.
In summary, the effects of the employer's failure to give the
contractor effective site possession on the stipulated date
will be as follows:
such a default will constitute a breach of contract
which will in principle give the contractor the right to
rescind the contract; and
the contractor will be entitled to damages for any loss
which he has suffered as a result of the breach; and
unless the contract contains an express term
permitting the employer to grant a commensurate
extension of time to the contract in compensation
for the delay caused by the employer's breach, the
effect will be that the date of completion will be 'at
large' and the employer will lose his right to impose
Liquidated Damages(LD) under the contract.
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Is it possible to postpone the possession of site?

It is apparent that the employer may be compelled in
certain specific situations to defer giving possession of
the site to the contractor.
Whether this can be safely undertaken in practice
without the employer defaulting in his contractual
obligations an issue is dictated by the pertinent legal
principles.
The general legal position is to the effect that unless the
contract expressly permits, the employer cannot
postpone or defer the giving of effective site
possession to the contractor nor give piecemeal
possession.
Clause 21.4: Postponement of Work - PAM 2006 Form
(With Quantities and Without Quantities) Editions.
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Is it possible to postpone the possession of site?

the postponement of any works under an express
contract provision should be limited to only a reasonable
period in the context of the contract involved; and
a 'knock-on effect' of any deferment will be to grant an
appropriate extension of time to the contractor and
compensate him for any loss and expense which the
contractor may have incurred consequent to the delay.
Here again, it must be reaffirmed that unless there are
suitable express provisions enshrined in the contract to
cover this eventuality, the employer's exercise of the said
options is rather limited and difficult to be tenable at law.
See clause 23.8 and 24.3

Access to the site

Coupled with the issue of site possession is the question of

access to the site; for it is immaterial for the former issue to
be fulfilled without the contractor being able to have effective
access to the particular site. Hence, possession and
access to site are two inextricably linked matters that
need to be addressed for the necessary execution of the
works under the contract irrespective of the nature of
contract involved.
The general position is to the effect that the contractor has
an implied right of access to the site in so far as access
is controlled by the employer, otherwise it will be
impossible for him to carry out the works.

What are the implications if failed to give access to the

contractor?

The consequences of the failure to give the contractor effective access

to the site depends upon a number of factors. Where there is an
express provision in the contract prescribing for access to be
given by the employer, a default of the employer in effecting the same
will:
o Render him liable for damages incurred by the contractor;
o Entitle the contractor to claim for an extension of time to the
contract provided such a ground is expressly provided for in the
contract; and
o If there is no express provision permitting the employer to grant
a commensurate extension of time, it would render time to be 'at
large' thereby compromising the employer's entitlement to possible
Liquidated Damages (LD).
Should the contract on the other hand impose the obligation on the
contractor for obtaining the means of access he requires to the
site, for the main right of way or access to the site and/or; any other right
of way or access including any way leaves, easements, then the
employer carries no liability and the consequences of any default on
the issue of access falls squarely on the contractor.
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What are the procedures to be adopted for handing

over of site possession?
On the date named in the letter of acceptance and/or the
contract documents for handing over possession of site
to the contractor, the process of handing over must be
formalized to ensure that the employer discharges his
obligation under the contract.
A convenient method of effecting the same is through
an official meeting held at the site called the 'Site
Possession Meeting'. This may or may not be the first
meeting between the parties subsequent to the issue of
the letter of acceptance but it certainly constitutes the
commencement of the meetings on site; the others
being the likes of site progress meetings,
coordination/project management meetings, sub-con's
meetings, etc.

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What are the procedures to be adopted for handing

over of site possession?
The primary purposes of the 'Site Possession Meeting' are,
for the employer to officially hand over possession of the site
to the contractor; and for the contractor in reciprocation to
officially take over possession of the site from the employer
for the purpose of the contract. There will be an introduction
of project team members, explanation of contract
requirements, handing over of various documents and
setting out various project procedures during the meeting.
Hence, pursuant to this handing over exercise, the contractor
has a contractual license to occupy the site for the execution
of the works under the contract.
The site possession meeting marks the employer's official
handover of the site to the contractor, it must be chaired by
the employer /his authorized representative.
Following the site possession meeting, official minutes of the
meeting should be prepared by such representative and
circulated to all attendees who must confirm and pass such
minutes as a true and correct record of the proceedings at
the subsequent meeting, i.e. the next site meeting.
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End of Site possession Are

there any questions?

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