Sam Bawden, Construction Law solicitor and Partner at Holmes & Hills, advised an internationally recognised food producer in relation to, and assisted it with negotiating the terms of, a bespoke building contract which it entered into with a national housebuilder.
The context of the negotiations was unusual. The client was selling land, adjacent to its food production facilities, to the developer. Not only was the developer to pay a sum of money for the land, but part of the transaction also involved the developer agreeing to build a number of houses for the client, on land which the client was retaining, which were to be for the purposes of housing some of the client's employees..
The build contract set out the terms on which the developer would build those houses intended for the employees.
Negotiating the contract was interesting because it gave rise to a number of issues that were unique to the way the deal was structured. For example, the value of the contract covering the construction of the employee houses was the sum of £1, which meant that applying a percentage retention would have been almost entirely meaningless. A similar issue arose in relation to valuing any instructed omissions from the contract. Resolving these issues involved looking not just at the effect of the proposed clauses, but also the commercial context of the transaction and the geographical layout of the proposed site, all of which enabled the client to make an informed decision as to how much risk the client was prepared to accept in relation to the housing that was to be delivered.
Further, it was necessary to ensure strong lines of communication with other specialist departments within Holmes & Hills Solicitors which were drafting and negotiating the agreement of the sale of the land to the housebuilder (dealt with by specialist development and land solicitors), as well as the applicable section 106 agreement (dealt with by specialist Planning Law solicitors), to ensure consistency between all transactions.