Dan Morris, 30 July 2026
Construction Contractors Can Benefit from Lenders’ Side-Deeds
Lenders’ side-deeds are tripartite arrangements (banker/funder, developer, contractor) that provide finance to pay for construction services.
Benefits to Contractors:
By giving the lender control over contractual responses to time- and cost- impactors (such as direct payment rights to subcontractors, step-in rights, and restrictions on developers’ scope variations), these side-deeds give stability and certainty to a dynamic project. This tends to improve the security and regularity of contractor and subcontractor payments, improving cash flow, efficiency, and contractor reputation.
Actionable Advice:
This requires expert, practical advice because some controls imposed by lenders may limit a contractor’s commercial autonomy in undesirable ways. Contact us at Dan Morris Legal.
Construction Contractor Insurance: Mind the Gap
A mismatch between a contractor’s insurance policies and their construction contracts can be dire, making consultation with insurers and brokers necessary before contract execution.
Common Insurance Mismatches:
Overlapping Cover/Novation Gap: This is seen when a contractor agrees to novation of professional design and consultancy agreements with no consideration for how liabilities are limited under those agreements, and to what extent their own insurances will fill the created cover gap (referencing the dangerous novation article)
Limited Cover Scope: Cover may be limited to damaged works and/or property that the contractor is obliged to insure under its contract, potentially excluding discretionary or voluntary cover.
Inconsistent Duties and Standards: This occurs when a construct-only contractor is burdened with duties typically held by design professionals, or when the standard of care is inconsistently described (e.g., “proper and workmanlike” versus “duly careful, skillful and diligent”).