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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22480
Experience:  37 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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During a construction contract in nz when does ownership

Customer Question

During a construction contract in nz when does ownership pass to the client for goods installed during the build process?
Submitted: 1 year ago.
Category: New Zealand Law
Customer: replied 1 year ago.
During a construction contract in nz when does ownership pass to the client for goods installed during the build process?
for example, if pipes are laid in the ground, but not connected, because the works are in progress - and are stolen; who do the pipes belong to? Who pays to replace them ? The contractor or the client ?
Expert:  Chris The Lawyer replied 1 year ago.

This can depend on the contract. Many contracts provide that title passes when the good are paid for. So the first step is to see if this term is present, and that answers some, in that when the owner pays for the items, title passes. If there is no such term then the title would pass on delivery to the site. If the contractor ordered the items and they were delivered to the contractor on the site, title would pass on installation. So if they were laid, but not yet connected my opinion is they then belong to the owner. Risk however sometimes is mentioned in the contract, and may not pass until practical completion. So then you need to look at the head contract.

Customer: replied 1 year ago.
The Contract is NZS3916 with Special conditions excluding off site payment (12.1.3(b)(iv), but allowing advances for material not yet incorporated ( 5.9.3) which also vests ownership in the material.
Care of Works is invested in clause 5.6 in the Contractor - and I cant find anything that transfers this to sub-contractors.
So I suppose the question is whether it is reasonable to expect the Contractor to call on their insurances, in the case of a sub-contractor site loss, rather than have the sub call on theirs.
Expert:  Chris The Lawyer replied 1 year ago.

If the contractor ordered the pipes, and has care of the works then it would be their insurance which has to be used, in my opinion

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