Construction commencement: Overview, definition, and example
What is construction commencement?
Construction commencement refers to the official start of a construction project. It marks the point at which work begins on-site following the completion of preliminary tasks, such as obtaining permits, finalizing designs, and securing financing. The date of construction commencement is often outlined in contracts and agreements, and it triggers various obligations and timelines for both the contractor and the client.
For example, the construction of a new office building may officially commence once the contractor mobilizes equipment on the site and begins site preparation.
Why is construction commencement important?
Construction commencement is important because it signals the beginning of the construction phase and sets the clock ticking on various contractual obligations, such as completion deadlines and payment schedules. It is also a critical point for project management, as it initiates the monitoring and tracking of progress against the agreed timeline. This moment is often tied to performance milestones and legal requirements, ensuring that both parties—typically the client and contractor—are clear on when the project starts and what is expected.
For businesses and contractors, marking the commencement of construction is vital for tracking project timelines and managing risks associated with delays, penalties, and costs. It also ensures that the necessary resources, personnel, and plans are in place to start the project effectively.
Understanding construction commencement through an example
Imagine a developer has hired a construction company to build a residential complex. The construction contract specifies that construction will commence on a specific date, once the necessary permits and approvals are obtained. Once the commencement date arrives, the construction company begins mobilizing workers and equipment on the site, starting with excavation and foundation work.
In another example, a company is building a new warehouse and the contract specifies that construction must begin within 30 days of final approval. Once the site is ready and the contractor has received the green light, the contractor will begin construction on the specified date, marking the official commencement of the project.
An example of a construction commencement clause
Here’s how a construction commencement clause might appear in a contract:
“Construction shall commence no later than [insert date], upon the fulfillment of all conditions precedent, including but not limited to obtaining necessary permits, finalizing site preparation, and securing financing. The Contractor agrees to begin mobilization on the site and initiate work on the commencement date.”
Conclusion
Construction commencement is a crucial milestone in a construction project, marking the official start of work on-site. It sets in motion the project timeline and the obligations of both the contractor and client, ensuring that everyone involved is clear on the start date and associated responsibilities. Properly defining construction commencement in contracts helps prevent misunderstandings and delays, ensuring that projects proceed smoothly and according to plan.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.