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Fitness for purpose in construction contracts

Fitness for purpose in construction contracts A contractor or consultants’ standard of care in relation to design is a common source of disagreement between the parties to a construction project. In most cases the contractor or consultant will be trying to avoid accepting a 'fitness for purpose' obligation in relation to the design—either express or implied. This Practice Note examines what the so-called 'fitness for purpose' obligation is, who is subject to it and who isn't, where it comes from and why contractors and consultants are keen to avoid accepting it. It also includes example clauses and considers whether a contractor should accept them. The amount of design that a contractor or consultant may carry out under their contract or appointment will vary but, regardless of the extent of design undertaken, the principles dictating the standard of care in respect of that design will be the same. Where does the fitness for purpose obligation come from? The fitness for purpose obligation derives from legislation regarding product liability and...

NEC contracts—variations

NEC contracts—variations This Practice Note looks at how variations are dealt with under the NEC Engineering and Construction Contract (ECC). For a more general discussion on variations, see Practice Note: What is a variation on a construction project? This Practice Note covers both the NEC3 and NEC4 editions of the ECC and focuses on variations instructed by the Project Manager where the Contractor is not at fault eg where the Client decides that additional works are required. For consistency, the term ‘Client’ is used throughout this Practice Note as this is the term used for the developer/employer in the NEC4 contracts (the NEC3 ECC uses the term ‘Employer’). The term ‘Scope’ is used throughout this Practice Note as per the NEC4 ECC to describe the document which specifies and describes the works which the Contractor is to carry out (in the NEC3 ECC the term ‘Works Information’ is used). For a glossary of NEC terms, see Practice Note: NEC contracts—glossary. Where no distinction is made between clause numbers, the...

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Form of Agreement—NEC3 [Archived]

Form of Agreement—NEC3 [Archived] ARCHIVED: This Precedent has been archived and is not maintained. [Stop press: The NEC4 suite of contracts was published in June 2017. See Precedent: Form of Agreement—NEC4 ECC] Agreement in relation to [insert brief details of the works/project] at [insert address of works] (Incorporating (inter alia) the NEC3 Engineering and Construction Contract 2013 modified and supplemented in the manner indicated in this Agreement and the Schedules hereto) This Agreement is made on the [insert number] day of [insert month] 20[insert year] Parties 1 [insert name of the Employer] (company registration number [insert number]) whose registered office is situated at [insert address of the Employer] (‘the Employer’), 2 [insert name of the Contractor] (company registration number [insert number]) whose registered office is situated at [insert address of the Contractor] (‘the Contractor’) Background (A) The Employer wishes for certain works, namely [insert brief details of the works/project] as more particularly described in this contract, to be executed. (B) The Employer...

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How can a consultant seek compensation under an NEC3 Professional Services Contract 2013 for additional costs incurred as a result of a survey provided by an employer that was discovered to be incorrect after the works had been completed?

How can a consultant seek compensation under an NEC3 Professional Services Contract 2013 for additional costs incurred as a result of a survey provided by an employer that was discovered to be incorrect after the works had been completed? The starting point would be to consider the status of the survey and whether it forms part of the Scope. In the NEC3 Professional Services Contract 2013 (PSC), the consultant's services are set out in the Scope. This is the equivalent of the Works Information in NEC3 ECC and a combination of the Employer’s Requirements and Contractor’s Proposals in JCT contracts. The definition of the Scope is set out in clause 11.2(11) of the PSC. If the survey does not form part of the Scope, then clause 12.4 (entire agreement clause) applies and there is unlikely to be any recourse under the compensation clauses because the survey does not form part of the contract. In this case, it will be necessary to rely upon potential...