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Erschienen in:
Blockchain Technologies in Construction Kapitel lesen Erstes Kapitel lesen

2022 | OriginalPaper | Buchkapitel

Smart Contracts and Payment in the UK Construction: The Legal Framework

verfasst von : David S. Christie, Joseph Mante

Erschienen in: Blockchain for Construction

Verlag: Springer Nature Singapore

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Abstract

This chapter critically evaluates the way in which the existing United Kingdom (UK) construction payment regime will function with—and assist—payment mechanisms which utilise smart contracts. Blockchain is one of several new developments in the increasingly technologically developing UK construction industry. Whilst the law translates real-world actions into legal obligations to pay and then assists in turning those obligations into payment, the blockchain with smart contract mechanisms will automate that process, providing security and removing any intermediation which could stop or slow the process down illegitimately. Coupled with the use of smart contracts, therefore, blockchain technology has the potential to facilitate a solution to the payment and cash flow issues in the UK construction industry. To achieve the added functionality described and thereby make it a useful tool for payment in construction, however, these developments would need to coexist with the existing legal framework. There are important points in the detail that should be more fully understood by users of the blockchain/smart contract systems, and which are explored in this chapter.

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Vorheriges Kapitel Conceptual Model Utilizing Blockchain to Automate Project Bank Account (PBA) Payments in the Construction Industry
Nächstes Kapitel Private Distributed Ledger for Indoor Scene Annotation
Fußnoten
1
Tsui S. Ng, ‘Blockchain and Beyond: Smart Contracts,’ Bus. L. Today (September 2017) (Am. Bar Assoc.)). This definition was endorsed in the American case Rensel v. Centra Tech Inc., 17–24,500-CIV, 2018 WL 4,410,110, at 10 (S. D. Fla. June 14, 2018). See also Kevin Werbach & Nicolas Cornell, Contracts Ex Machina, 67 Duke L. J. 313, 319 (2017).
 
2
‘A Primer on Smart Contracts,’ U.S. Commodity Futures Trading Commission, Lab CFTC, Nov. 27, 2018, available at cftc.gov/PressRoom/PressReleases/7847-18.
 
3
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd (1973) 71 L. G. R. 162, 167.
 
4
The Scheme for Construction Contracts (England and Wales) Regulations 1998/649 (there is an equivalent set for Scotland).
 
5
S110(1).
 
6
S110B and the subject of a number of cases on the ‘smash and grab’ adjudications which arise as a result.
 
7
The operation of these different systems is set out well in Pickavance [16], part II (albeit it needs an update).
 
8
The distinction was discussed, albeit in a different context by Judith Hackitt in her review of the Building Regulations following the Grenfell Tower fire [8] pp 6–8).
 
9
Housing Grants, Construction and Regeneration Bill [Lords] HC Deb 07 May 1996 vol 277 cc45-122 at col. 53.
 
10
[2021] EWHC 356 (TCC) (22 February 2021).
 
11
That is, of the three jurisdictions: Scotland, Northern Ireland and England and Wales which make it up.
 
12
see e.g., S&T v Grove Developments Ltd 2018 EWCA 2448 at para 108 per Jackson LJ.
 
13
then the UK’s highest court.
 
14
Melville Dundas Limited (in receivership) and others (Respondents) v. George Wimpey UK Limited and others (Appellants) (Scotland) 2007 UKHL 18 Para 9.
 
15
Ibid.
 
16
See, for example, Pentland Investments Ltd v Aitken Turnbull Architects Ltd 2018 SLT (Sh Ct) 284 at para. 36 (although the origins of the phrase in the context of adjudication go back to Lord Howie in the debates on the then Bill in Parliament, and beyond).
 
17
Commonly referred to in case law, the phrase appears to have been coined by Robert Fenwick Elliott see Fenwick Elliot [6].
 
18
S105 of the 1996 Act.
 
19
S104(2).
 
20
Re National Crime Agency [2020] EWHC 268 (Admin) at para 50.
 
21
S109(1).
 
22
Sections 109 to 114.
 
23
S110(1).
 
24
Ibid.
 
25
See n. 4 above.
 
26
2019 EWCA Civ 1515.
 
27
[2001] ScotCS 199, discussed in paras. 20–30.
 
28
S110A (2).
 
29
S&T v Grove Developments Ltd 2018 EWCA 2448 at Para 92.
 
30
Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 (in particular 768 A–D).
 
31
S&T v Grove Developments Ltd 2018 EWCA at para 50.
 
32
Scottish Law Commission (2018) Report on Review of Contract Law: Formation, Interpretation, Remedies for Breach, and Penalty Clauses, Ch. 11.
 
33
COD Hyde Limited v Space Change Management Limited [2016] EWHC 820 (Ch) is a rare example—and see discussion in paras. 43 to 51.
 
Literatur
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Raskin M (2017) The law and legality of smart contracts. Geo Law Tech Rev 1:305–306
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Temte M (2019) Blockchain challenges traditional contract law: just how smart are smart contracts? Wyoming Law Rev 19:87
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Metadaten
Titel
Smart Contracts and Payment in the UK Construction: The Legal Framework
verfasst von
David S. Christie
Joseph Mante
Copyright-Jahr
2022
Verlag
Springer Nature Singapore
Buch
Blockchain for Construction

Print ISBN: 978-981-19-3758-3

Electronic ISBN: 978-981-19-3759-0

Copyright-Jahr: 2022

DOI
https://doi.org/10.1007/978-981-19-3759-0_9