Wragge Lawrence Graham & Co

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Getting your priorities in order — precedence clauses in commercial contracts

The Court of Appeal case of RWE Npower Renewables Ltd v J N Bentley Ltd [2014] EWCA Civ 150 acts as a reminder to draftsman not to place too much reliance on these clauses and highlights the risks when all contractual documents are not properly reviewed before finalising agreements.

RWE engaged Bentley to carry out civil engineering works in relation to a hydro-power scheme in the north of Scotland. The contract value was approximately £4m. At some point during the works, various delays occurred and a dispute arose between the parties regarding when certain sections of the work should have been completed.

The timings for completing the works were set out in different documents. The key section of work in dispute was known as ‘Section 2’, which related to the construction of an intake, some penstock pipeline, a tailrace, a powerhouse and the hydro plant. Failure to complete all works for Section 2 within a certain time would, under the contract, result in Bentley paying liquidated damages to RWE…

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