Typically, expiry of a project deed does not affect any accrued rights and obligations under the project deed as at the expiry or termination date (including any rights and obligations accrued as a result of a default). In addition, the project deed will typically include specific provisions that survive expiry of the project deed. These provisions usually relate to:
• indemnities and warranties;
• defects liability period;
• end of term maintenance and refurbishment obligations;
• payment and termination provisions;
• intellectual property;
• confidentiality obligations;
• dispute resolution;
• public relations and publicity;
• records; and
• end of term rights and obligations.
The contract director or project manager will need to review a range of different contractual provisions, which may be affected by any proposed contract extension. These provisions include:
• any existing contractual provisions that are expressed in absolute terms rather than as a percentage of a particular value or amount (e.g. liability caps);
• any contract provisions expressed using actual dates that would not remain valid in an extension period (e.g. a requirement that a parent company guarantee must remain in place until a specific date);
• whether specified usage volumes or other utility arrangements are appropriate for the extension period;
• any access issues that may be affected by leasing arrangements under the existing contract;
• the impact on the service payment model that may have been structured over the existing term; and
• the impact on any KPIs, which may need to be adjusted to meet the required level of service.