Getting contracts right for modular build projects

Modular projects are becoming much more popular in the construction industry, particularly in projects where entire rooms are constructed off site.

Milestone payments will often be agreed between parties, where payment is triggered upon “sign-off” of a certain event, such as completion of a certain number of rooms on a hotel project.

The recent case of Bennett (Construction) Limited v CIMC MBS Limited (2018) highlights the issues that can arise in the event that triggers for payment are not properly defined.  This contract concerned the design, supply and installation of 78 modular bedroom units for a hotel. Payments were triggered by “sign-off” of certain milestones, such as completion of a prototype room.