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The New Edition of the CPA Model Conditions for the Hiring of Plant – What Has Changed?

March 9, 2012 | Construction Contracts

The Construction Plant Hire Association Model Conditions for the Hiring of Plant (“CPA Model Conditions”) 2001 have been updated to reflect changes in legislation and industry practice.

The 2011 version of the CPA Model Conditions seeks to dispel previous ambiguities and provide clarity. It took effect from 1 July 2011.

 

Summary of Major Changes

Definitions

There is now an amended definition of “Plant” and new definitions of “Contract”, “Holiday Period”, “Offer”, “Working Day” and “Working Week”. The new definitions have been inserted to clarify what is classed as a Working Day and a Working Week and that the Hire Period includes any “Holiday Period”.  Offer is the “Owner’s offer to hire the Plant to the Hirer which will include details of the Plant to be hired, the Hire Period, the relevant hire rates and charges and any supplementary conditions to be incorporated into the Contract.”

There are a number of supplementary conditions published by the CPA which may be incorporated into a Contract together with the CPA Model Conditions (such as those in respect of Rail Plant Hire, Concrete Pumping, Hoists, Mobile and Crawler Cranes, Shoring Technology and Piling, Tower Cranes and Tools and Equipment) and the new definitions of “Offer” and “Contract” provide for the inclusion of these supplementary conditions, where applicable.

Extent of Contract

Clause 2 confirms that only those terms contained in the Offer (as defined) shall be incorporated into the Contract (as defined) and “all other terms or conditions which the Hirer may seek to apply under any order or acknowledgement or acceptance or similar document” shall be excluded. Whilst this clause seeks to exclude any terms and conditions which the Hirer seeks to apply, Owner’s should be alive to the risk of the “last shot” principle. 

Delivery in Good Order and Maintenance

Clause 5 now states that the Hirer is responsible for the use of the Plant in accordance with the manufacturers and/or Owner’s recommendations.

Ground and Site Conditions

Clause 7 was previously entitled “Timber Mats or Equivalent” but has now been renamed “Ground and Site Conditions” to clarify that the Hirer is responsible for the ground and site conditions generally. Clause 7(a) states that the Hirer “warrants that the condition of the site or place of delivery of the Plant is suitable for the use of such Plant”. Clause 7(d) goes further by confirming that the Hirer is “responsible for the protection of and liable for any damage to, any underground, surface or above ground services and utilities”. The Hirer must therefore liaise with the relevant statutory authority in respect of such.

Handling of Plant

Clause 8(a) has been extended to confirm that the Hirer shall be “solely responsible” for all claims arising in connection with the operation of the Plant” by the driver or operator supplied by the Owner. New clause 8(c) also states that the drivers and operators supplied by the Owner “shall not operate any other plant or machinery or undertake work other than that for which they are supplied by the Owner” unless agreed otherwise in writing between the Owner and the Hirer. 

Breakdown, Repairs and Adjustment

Clause 9(a) has been amended to clarify that any breakdown or damage to Plant must not only be notified immediately to the Owner, but also “confirmed in writing” and that any claim for breakdown time will only be considered from the date such written notification is received “and acknowledged by the Owner”.

Clause 9(c) clarifies that where the Hirer changes a tyre, the tyre must “be of an equivalent specification” approved by the Owner and the Hirer remains responsible for the cost of such.

Other Stoppages

Clause 10 now confirms that the Owner shall not be responsible for the cost of recovering the Plant from soft or “unsuitable ground, or a hazardous environment.” This clause goes on to clarify that the cost of recovery in these circumstances shall be borne by the Hirer.

Limitation of Liability

A new clause 12(d) has been inserted which confirms the legal position that the Owner cannot exclude liability for claims of death or personal injury caused by the Owner’s negligence or fraud.

Hirer’s Responsibility for Loss and Damage

Clause 13(b) has been amended to clarify that the Hire Period includes the time Plant is left on site during a Holiday Period and states that the Hirer shall indemnify the Owner “and any personnel supplied by the Owner” in respect of all claims by any person for injury to person or property caused by the storage, transport or use of the Plant during the Hire Period. In the event of loss or damage to the Plant, hire charges shall continue at idle time rates until settlement has been agreed.

Clause 13(b) also now confirms that “payment of settlement must be made within 21 calendar days of the date of the agreement or idle time charges can be reinstated from the date of that agreement. Should idle time charges be re-instated, the agreed settlement figure remains payable in full.”

Notice of Accidents

Clause 14 now confirms that where Plant is involved in an accident resulting in injury to persons or damage to property, immediate notification must be given to the Owner by telephone and confirmed in writing “no later than 24 hours after such telephone notification”.

Commencement and Termination of Contract

New sub-clauses (b) and (c) have been inserted into Clause 23 which confirm that should the Plant not be made available for collection as agreed between the parties, the Plant shall be deemed to be back on hire and the Hirer shall be responsible for the safekeeping of the Plant and “all reasonable costs and expenses incurred by the Owner in seeking to collect such Plant”. Clause 23(c) requires the Hirer to clean and if necessary, decontaminate the Plant upon completion of the Hire Period. The Hirer shall be responsible for any costs, liabilities and expenses incurred by the Owner in respect of the Hirers failure to comply with this sub-clause.

Hirer’s Liability During the Notice of Termination of Contract

This clause has been extended to clarify that where the Hirer fails to make the Plant available for collection by the Owner before the end of the 7 day notice required pursuant to clause 24(a), the Hirer’s obligations under clause 13 (Hirer’s responsibility for loss and damage) shall continue for a further 3 days or until such time as the Plant is made available for collection and the Owner has collected the Plant. Clause 24(c) has been inserted which states that if the Hirer terminates the Contract before the Hire Period commences, then the Hirer shall be liable for all reasonable costs and charges incurred by the Owner or to which the Owner is committed at the time of termination.

Fuel, Oil and Grease

Pursuant to clause 28 of the revised CPA Model Conditions, the Hirer shall be “solely responsible for all damages, losses, costs and expenses incurred by the Owner if the Hirer uses the wrong fuel, oil or grease.”

Government Regulations

Clause 32(b) has been inserted to clarify that the Hirer is responsible for any “charges or fines that the Owner may become liable for as a result of the operation of the Plant during the Hire Period.”

Protection of Owner’s Rights

Clause 33(e) confirms that where the Hirer fails to pay a sum by the final date for payment, the Owner has the right to suspend performance of its obligations under the Contract provided he gives at least 7 days’ notice in writing of his intention to do so.

Dispute Resolution

Clause 35(a) clarifies that if the site is within the UK, jurisdiction depends on where the site is (i.e England or Scotland). If the site is outside of the UK, jurisdiction will depend on where the Owner’s head office is.

Clause 35(b) confirms that the Hirer and the Owner have the right to adjudicate and Part 1 of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (or any amendment or re-enactment thereof) will apply.

Late Payments and Severability

New clauses 36 and 37 have been inserted confirming the position on interest for late payments and the severability of unlawful clauses.

The New Construction Act

Although the Model Conditions provide for contractual adjudication regardless of whether the contract falls within the Construction Act or not, it should be remembered that the payment provisions of the Act will apply where the subject of the contract is a construction operation under the Act. 

This article contains information of general interest about current legal issues, but does not provide legal advice. It is prepared for the general information of our clients and other interested parties. This article should not be relied upon in any specific situation without appropriate legal advice. If you require legal advice on any of the issues raised in this article, please contact one of our specialist construction lawyers.

Wakefield Office

17 Navigation Court
Calder Park
Wakefield
West Yorkshire
WF2 7BJ
Tel: 01924 258719
Fax: 01924 257666
enquiries@hklegal.co.uk

London Office

28 Queen Street
London
EC4R 1BB
enquiries@hklegal.co.uk