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Construction Law/Managing Acquisitions and Successor Liabilities in Subcontracts

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Question
We had a subcontract with a Company for design review services. The Subcontractor is now acquired by another company. The person who was point of contact from original Subcontractor sent an email informing about the acquisition and explained that they will continue to perform the services but with a new name and under a new ownership.

In the subcontract, where we defined Parties right at the start, it was stated that ".. the term "Subcontractor" shall mean and include its authorized representatives AND LEGAL SUCCESSORS"

My question is, after this acquisition how should we formalize it and its associated transfer of liabilities to successor? Should there be an amendment/some other instrument to formalize this change Or the statement quoted above from the Subcontractor's definition is sufficient and does not require any action? Please advise.

Answer
Dear Muhammad,

Thank you for this question.

To be safe it is better to have a formal transfer via a novation agreement, signed by the original parties.


I hope that this assists you.

Kind regards,
John Dowse
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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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