SPOA Terms and Conditions of Hire Briefing Note -Suspension of work on site: shut down or lock down.

The contract

The Terms and Conditions are clear that the Hire Charges run from the time of commencement of the Period of Hire until:-

1.       Where the hire is for a fixed period, the expiry of that fixed period; 

2.      Where the hire is not for a fixed period, or where the hire is continued after the expiry of the                 fixed period without any new period being determined, two days after either party shall have               given to the other written notice to terminate the hire; or

3.      In any event, when the Hirer receives from the Owner a valid Off Hire Number in respect of                   the Plant;

When the Hirer shall forthwith deliver the Plant to, or allow its uplift by, the Owner. Failure to do so will result in the Hirer being liable for the Hire Charges in respect of any period where there is delay in delivery or uplift which is not due to any act or omission of the Owner.

 

So under contract, ongoing liability is clear subject to:-

1)      The fixed period of hire continuing; or

2)     If there is no fixed period, whether written notice is given to terminate the hire.  

 

Practical issues

We believe that ongoing accrual of hire charges (all of which might be disputed in shutdown/lockdown scenarios) will be a secondary issue to wanting to secure the equipment.

Overall, a risk analysis will come into it. For smaller sites, Owners might be keener to off-hire and uplift than for sites controlled by major contractors.

Key points of the risk analysis will be:-

• Check that the SPOA Terms and Conditions have been properly incorporated into the hire contract 
• Make sure that you have a documented conversation with the customer and agree whether (1) the equipment is being taken off hire; or (2) the hire contract is suspended.
• If off hire the customer needs to make the equipment available for collection. 
• If the hire contract is suspended it is still a hire contract but, by agreement, the Hire Charges cease for the agreed period.
• If the hire contract is continuing with (or without) suspension of Hire Charges, the Owner needs to satisfy themselves that the equipment will be covered under the customer’s hired in plant insurance or if not that it will be covered under the Owner’s insurance while still on the customer’s site. 

Then, for shutdown/lockdown scenarios where the equipment is being left on site the following points would be the key message to your customers:-

• The hire contract is not at an end and it remains the responsibly of the hirer to insure equipment and ensure the safe keeping of all equipment/attachments whilst suspended. 
• Whether operated or non operated it is the responsibility of the hirer to ensure fitting of shutters and clean tracks of excavators (where available). 
• All equipment should be left with minimal fuel to limit fuel theft and attachments/buckets gathered and secured or “jammed” to the main equipment.
• As long as lock down is not in force you reserve the right to off hire and collect equipment at agreed transport cost.

To Clarify

All members should be satisfied that if equipment is to stay on site that the Hirers "hired in insurance" will cover it during these unprecedented times. 

Work with your customers to find a mutually beneficial solution. 

 

The information contained in this email  is for general guidance only. It is not legal advice. SPOA cannot be held liable for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter.

March 2020

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