Practical completion is often easier to recognise than it is to define. Despite its importance, there is no precise legal interpretation of the term.
Indeed, most standard form contracts do not define practical completion in detail, and if they do it is via an amendment.
Completion of a construction project often directly triggers a number of consequent actions or obligations and marks the end of any further liabilities under the contract.
Some common actions that are triggered or powers and obligations that end include:
As JCT contracts dominated the UK construction industry for most of the past 100 years, much of the case law and textbooks look at the meaning of 'practical completion' as defined by this suite.
The principles can often be applied to other forms of contract even if the terminology differs. A brief summary of what the standard forms say is as follows.
Case law and construction law textbooks offer various opinions on what practical completion is. These are described in detail in RICS' Defining completion of construction works and can be summarised as follows.
Mears Ltd v Costplan Services (South East) Ltd and others [2019] EWCA Civ 502 in the Court of Appeal provides a good summary of the case law on practical completion.
The works in this case, which started in the middle of 2016, were delayed. In late summer 2018, the tenant, Mears, alleged that some of the rooms in a block of flats it was leasing were more than 3% smaller than specified in the contract.
However, by then the rooms had been built and the works were complete. Notwithstanding Mears' complaints, the employer's agent, Costplan, indicated that it intended to issue a certificate of practical completion.
Mears sued and sought an injunction restraining Costplan from doing so and claimed any reduction in room size exceeding 3% was a breach of contract that prevented practical completion from being certified. The original judge did not grant the declaration sought by Mears.
This was challenged in the Court of Appeal which upheld the original decision, but helpfully the Court of Appeal reviewed the case law applicable to practical completion and summarised it as follows.
Whether or not it is referred to as practical completion in the contract, completion is important, both from a contractual and commercial perspective; but what this requires varies from project to project.
Practical completion comes in various shades. As there is no common definition of the term you need to consider the specific wording in your contract, as well as considering the principles from wider case law.
This lack of definition leads to disputes as to whether or when practical completion has been achieved. Some practical considerations you should identify when seeking or awarding completion include the following.
RICS provides further guidance on completion in Defining completion of construction works.