MF/1 contracts — their advantages and limitations

By Robert Weatherley

The MF/1 contract for the supply and installation of electrical, electronic or mechanical plant has been around for some time.

It was first published back in 1988 and we are currently on a fifth version, which came out in 2010 to take account of changes to the Construction Act. So it is well established in the industry and quite user friendly. For example, there is additional drafting contained at the back of the contract that can be incorporated, depending on what type of project you are doing. There is also a whole raft of ancillary documents. These include template forms of sub-contract, tender and parent company guarantee and even a defects liability demand (LD) guarantee. But there are a few quirks to watch out for, especially if you are the purchaser (i.e. the employer).

One such quirk relates to liquidated damages. In contrast to most building contracts in which LDs are expressed as a sum of money payable or deductible per week, under MF/1 they are expressed as a percentage of the contract value. This would be fine if the contract was referring to a percentage of the entire contract value because this would be easy to calculate…

Click on the link below to read the rest of the Mills & Reeve briefing.

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