It is important Principal’s retain the right to revoke the authority of a Superintendent to act as their agent under a construction contract. Contractual deeming provisions granting specific authority to a Superintendent as agent may (without expressly stating as much) effectively remove common law rights of a Principal to revoke a Superintendent’s authority.
Although not the only or primary reason for overturning the earlier decision of the judge at first instance, the Queensland Court of Appeal (link below) recently considered the validity of a Principal’s revocation of a Superintendent’s authority to issue payment schedules under the BIF Act on its behalf. A deeming provision in the contract meant any payment schedule issued by the Superintendent was as agent for the Principal pursuant to the BIF Act. Despite that deeming provision, prior to issue of the payment schedule by the Superintendent, the Principal by written notice to the Contractor purported to revoke the Superintendent’s authority to do so.
However, the Court held the Principal’s purported revocation of authority was ineffective as the contract failed to provide for a mechanism to revoke the deemed authority of the Superintendent. Principal’s use of contractual deeming provisions in this context should be sparing, or otherwise be worded to expressly retain the right of the Principal to revoke any authority granted to the Superintendent from time to time.
