Beware pitfalls of buildings

Apr 22 2008 by Sue Scott, Evening Gazette

IN THE last column we examined some general rules for avoiding the pitfalls in construction contracts.

The areas of greatest concern are design liability, ground conditions and time and money. In this column we will look at these more closely.

Design: It is a common misconception that design obligations only arise in design and build contracts. They are not always obvious and sometimes will be implied wherever a contractor has agreed to do something that involves an element of professional judgment.

The definition of design is very wide; it is not only calculations and drawings but also encompasses choice of materials or choice of a particular work process.

Contractors entering into a design and build contract should take care over the actual level of design responsibility being assumed and whether they are taking on responsibility for checking the design of others.

A client will often try to offload responsibility for design on to his contractor, even where he retained the design team at the outset.

The JCT 2005 Design and Build form makes it clear that the contractor is not responsible or liable to check the design contained within the employer’s requirements. A cute employer may amend this.

Ground Conditions: Clients often seek to transfer liability and responsibility for the ground on to their contractor. If you are a contractor, watch out for this.

Take care if you are using or relying on information supplied by others and are not actually the author of a site investigation report or survey. Do you have recourse against the author if the information is incorrect? Are you prepared to warrant the information supplied by a third party?

Time and money: Most contracts contain pre-conditions to the contractor’s entitlement to claim time and additional money as a result of delay.

Many standard forms and bespoke forms of contract contain provisions giving contractors only one bite of the cherry, i.e. if they do not do exactly what the contract requires at the exact time, they will lose their chance to claim.

Clients will look to tighten up the requirement for the provision of notices and pre-conditions to the recovery of loss and expense. They may try to exclude the recovery of financing charges, making time and money claims subject to the benchmarks provided by the contract programme.

Contractors should be aware of amendments to these provisions which make their recovery of loss and expense unduly onerous.

There are a number of issues to be considered by employers, contractors and consultants alike undertaking construction projects. Careful review of a contact before signature can identify these and other areas of concern.

Andrea Gardner is a Partner specialising in construction at BHP Law in Darlington. Contact her on 01325 466794.