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 in a given situation.
In RHG Construction the Queensland Court of Appeal considered the validity of a Principal’s purported revocation of a Superintendent’s authority to issue payment schedules under the BIF Act on its behalf, which revocation had been upheld by a primary judge in the Court below. A deeming provision in the contract authorised the Superintendent to issue payment schedules 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. Following that, the Superintendent issued a payment schedule on behalf of the Principal, and following that, the Principal issued its own payment schedule suggesting the former payment schedule be ignored.
The Court of Appeal (oveturning the decision below) held the Principal’s purported revocation of authority was ineffective as the construction contract failed to provide for a mechanism to revoke the authority of the Superintendent and the deeming provision binds the Principal to accept the agency in that context.
The use of contractual deeming provisions by Principal's in this context should be worded to expressly retain the right of the Principal to revoke, from time to time, authority granted to the Superintendent to issue payment schedules as its agent under the BIF Act (and any other express authority of agency of the Superintendent granted by the contract).
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 in a given situation.
In RHG Construction the Queensland Court of Appeal considered the validity of a Principal’s purported revocation of a Superintendent’s authority to issue payment schedules under the BIF Act on its behalf, which revocation had been upheld by a primary judge in the Court below. A deeming provision in the contract authorised the Superintendent to issue payment schedules 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. Following that, the Superintendent issued a payment schedule on behalf of the Principal, and following that, the Principal issued its own payment schedule suggesting the former payment schedule be ignored.
The Court of Appeal (oveturning the decision below) held the Principal’s purported revocation of authority was ineffective as the construction contract failed to provide for a mechanism to revoke the authority of the Superintendent and the deeming provision binds the Principal to accept the agency in that context.
The use of contractual deeming provisions by Principal's in this context should be worded to expressly retain the right of the Principal to revoke, from time to time, authority granted to the Superintendent to issue payment schedules as its agent under the BIF Act (and any other express authority of agency of the Superintendent granted by the contract).
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