Completing the works

3.9 The main obligation of the contractor is to complete the works as set out in the contract documents. In both CBC and DBC, this obligation is set out in clause 1.1, which states:

3.10 The above clause does not refer expressly to ‘materials, goods and workmanship’, as would be usual in JCT contracts, and it is therefore suggested that ‘in a good and workmanlike manner’ refers to the method of carrying out the work, not what work is to be done. Therefore, it is essential that the standards for materials, goods and workmanship are set out clearly in the specification and other contract documents. Clause 1.2 states that:

This is also intended to refer primarily to workmanship, but may also act as a useful catch-all to cover matters that have not been specified in detail. However, it is doubtful whether the obligation would override, for example, any express specification that had set out methods or materials that were unsafe.

Contractor’s design obligation

3.11 Like most traditional contracts these days, the RIBA Building Contracts make provision for some design to be carried out by the contractor. It is an optional provision, but it is likely that on most projects it will be required to some extent. Any decision that affects the final form of the building (as opposed to the method of construction) is a design decision, even if it relates only to small levels of detail, such as the exact size of joist hangers or of central heating pipes. If in any doubt as to whether something is effectively ‘design’, the contract administrator should consider whether it is intending to make all the necessary decisions, and, if not, what would happen if the particular detail were to fail: would it be prepared to accept responsibility? If not, it should take steps to ensure that liability for design of that detail is expressly placed with the contractor.

3.12 The provisions are set out in optional clause A2, and the parts to be designed by the contractor are be described in item U (CBC) or item R (DBC) of the Contract Details. A ‘Contractor’s design proposal’ is referred to in item F (both contracts), therefore the contract anticipates that the contractor may have provided a design prior to the contract being executed, which may be for some or all of the parts, depending on what was requested at tender stage (see paras. 2.15, 2.16 and 2.27). It appears that the contractor is responsible for designing only the parts that are listed. The contract makes it clear that the contractor is not liable for design provided by the client or the client’s agents (A2.4). However, it must notify the contract administrator of any discrepancy it finds in those designs.

3.13 What happens if the contractor makes a design decision relating to a part that has not been stipulated in the Contract Details, but for which the contract administrator has provided no design information? It is possible that the contractor would not be held responsible for that design decision. A relevant case concerns the Museum of Liverpool (National Museums and Galleries on Merseyside v AEW Architects and Designers), where the judge said the contractor was not responsible for designing anything not identified as part of the contractor’s designed portion (CDP), in this case deciding the tolerance gaps between steps. Courts might a take less strict view in a smaller project, but to be safe it is best to use the ‘Contractor Design’ optional clause and to make sure the extent of the contractor’s design responsibility is clear.

3.14 It is therefore very important that the delineation between the parts to be designed by the contractor and the rest of the project is described accurately.¹ This can be quite difficult in practice, especially where several parts or elements are listed, or the list includes a system (e.g. services) that is integral to many parts of the building.

3.15 The RIBA Building Contracts are clear that the contract administrator remains responsible for any integration. This could extend to the physical junctions between the contractor designed parts and other parts, but could also cover the combined performance of several systems or of systems and elements. If it is intended that the contractor is to be responsible for resolving any interface (physical or performance), the interface would have to be identified clearly within the parts to be designed by the contractor. The contractor retains the copyright in any design it provides, but grants the client a license to use it for the Works and related purposes (cl A2.5).

Contractor’s design liability

3.16 Under clause A2 the level of liability of the contractor for design is to use the skill and care of a competent designer. The contractor is also required to ensure that its design meets the client’s requirements. Taken together, this would not be interpreted as an absolute obligation to meet the specification, but a duty to use reasonable skill and care so that it does.

3.17 There are essentially two levels of liability used in construction. Professionals normally undertake to use reasonable skill and care, rather than promise to achieve a particular result. To understand this distinction, consider the case of a medical professional: a doctor would never promise to cure a patient, but simply to use their medical skills competently to achieve the best outcome possible. The fact that the patient does not get better is not of itself sufficient to show the doctor made a mistake. Similarly, with professional designers such as architects, the fact that there is a defect in the design is not sufficient to show they were negligent. Any client bringing a claim must also prove that the architect failed to use the reasonable skill and care of a competent architect. This is sometimes referred to as a ‘negligence-based liability’ and is the normal level of liability that would be set out in an architect’s appointment or would be implied by the courts if no level has been set.

3.18 The alternative, more onerous, level of liability is to promise to achieve a result. This is often referred to as a ‘strict liability’, as there is no need for the claimant to show that there was any negligence on the part of the designer; it would be enough to show that the result did not meet the stated requirements in some respect. A commonly used shorthand descriptor is that the designer has taken on a ‘fit for purpose’ liability. Contractors who undertake design work often take on an express ‘fit for purpose’ liability. Where no level of liability had been set out, the courts may imply that there is a strict liability, provided it can be shown the client was relying on the contractor’s skill and judgment.

3.19 The RIBA Building Contracts contain an option to set a strict liability obligation, in place of reasonable skill and care. This appears in the Contract Details under ‘Contractor Design’ (item U in CBC, or item R in DBC), which states ‘Contractor’s design to be fit for purpose’. No default is given: the parties are required to indicate ‘yes’ or ‘no’. However, the effect of clause A2.3 is that the default would be ‘no’, as it states:

3.20 Clients would usually prefer a ‘fit for purpose’ level of liability. After all, if they have taken the trouble, with their consultant, to set out detailed requirements for the design, including specific performance targets (e.g. in relation to energy use), they are likely to want to be able to bring a claim should the building not perform, without having to also prove a lack of care. However, as the ‘fit for purpose’ level of liability is more onerous on the contractor, some contractors may be unwilling to tender on this basis or might submit higher tender prices. The JCT contracts do not generally contain this option (except in the case of the Major Project Construction and Constructing Excellence contracts). However, it is an optional provision in NEC3 contracts (and standard in the FIDIC and IChemE contracts), and is often asked for in bespoke contracts, therefore its use is increasing.

3.21 Under clause A2.7 the contractor is required to ‘ensure there is adequate professional indemnity insurance for its design responsibilities, as set out in … the Contract Details’ (if no requirement is set out the obligation would fall away). The contractor might not be able to obtain insurance to cover a ‘fit for purpose’ risk, but that would not, of course, affect its liability.

3.22 Note that the contractor is also required to ‘compensate the [client] for all claims in respect of the Contractor’s designs’ (cl A2.6). This is a wide liability – it would cover, for example, claims by tenants for repair work or claims for breach of copyright – wider than a normal professional liability for design errors. There is no requirement to insure to cover this liability, and if the contractor’s design is extensive the client should consider whether to add this requirement at tender stage.

Contractor’s obligations in respect of subcontracted work

3.23 The contractor’s duties with respect to subcontracting the work are set out briefly in the following two clauses:

• 1.6 The Contractor shall inform the Architect/Contract Administrator of any parts of the Works that it has subcontracted.
• 1.7 The Contractor is solely responsible for carrying out the Works and for the performance of all subcontractors and suppliers.

3.24 The contractor may subcontract to anyone it chooses; there is no requirement to inform the contract administrator beforehand, or to obtain permission from the contract administrator or the client, and neither has the power to bar a contractor from using a particular firm. The contractor is, of course, entirely responsible for all its subcontractors (cl 1.7), so in theory there is no risk to the client, even if the contractor selects firms that are not capable of achieving the desired standard of work. However, in practice it can be frustrating to stand by without intervening, as work has inevitably to be redone and delays are caused.

3.25 If the client wishes to take a more proactive stance, there are two possible courses: one is to add a clause requiring the client’s or contract administrator’s permission for any sub-contracting (or perhaps only for subcontracting certain work), with such permission not to be unreasonably withheld. The second is to use the ‘Required Specialists’ provisions for critical areas of work.

Customer acting as contract administrator

3.37 DBC is unusual in that it offers the facility for the customer to name themself as contract administrator (optional cl A6). Although it is sometimes frowned upon, there is no reason why the customer can’t name themself in this way, with the very important proviso that it must have been made completely clear to the contractor at tender stage that this was going to be the arrangement. The customer must also ask themself whether they have the skills and resources (particularly time) necessary to perform the role, and whether they are capable of being truly impartial. Any incorrect or biased decisions are liable to be challenged by the contractor and, if a reasonable solution is not agreed, may result in the contractor being successful in subsequent litigation (as the tribunal is likely to examine the decision very closely). It is unwise for a customer to hope that it may secure a ‘better deal’ by taking on the role of contract administrator.

Pre-start meeting

3.40 The requirement to hold a pre-start meeting, at least ten days before the work is due to start on site, is contained in clause 3.1. Both parties must attend, as well as the contract administrator. Clause 3.1 states that the parties must:

• 3.1.1 set out expectations for each Party
• 3.1.2 set out communication procedures, including any specific rules on electronic communications
• 3.1.3 identify risks and set out the risk mitigation procedure
• 3.1.4 set out any administrative procedures.

3.41 The pre-start meeting is often the point at which the contract documents are signed. None of the discussions ought to result in any changes to the contract terms or the obligations of the parties. However, it would be wise to bear in mind that there is nevertheless a close link between the above and various contractual issues. For example, the ‘expectations’ cannot be more than those that are already set out. The client, for example, cannot demand a higher standard of work than the level specified in the contract documents or that the contractor finishes earlier than the contractual date. If it becomes apparent at the meeting that expectations are at odds with those in the contract, then the documents should be amended before signature.

3.42 The meeting will be used to flesh out and fine-tune some of the procedural matters. Key among these would be whether the client is to remain in occupation, and what the exact arrangements will be with regard to security, safety, access, use of facilities, storage and disposal of rubbish. If any additional or new arrangements are made, these should be recorded and annexed to the contract documents. The same applies to communications and other administrative procedures; the meeting will also be used to agree communication procedures (cl 11.11.1); and if the parties fail to do this the contract administrator is required to issue instructions regarding these (cl 11.11.2). Generally all communication is to be in writing and issued to the parties and the contract administrator (cl 11.10), unless the contract states otherwise. Special procedures are set out in the case of termination (cl 11.12, see para. 8.26).

Progress meetings (CBC)

3.43 CBC requires that progress meetings are held monthly (or other period as agreed) and attended by the contractor, the contract administrator and any other party invited by the contract administrator (cl 3.6). The meetings should cover all operational issues relating to the project. It is common practice to hold such meetings, but including them in the contract means that it becomes an obligation on the contractor to attend, and a breach if it does not. The meeting will normally cover matters such as progress, technical issues and information needed, and is an opportunity to discuss advance warning notices. In particular, the contractor is required to provide an update to its programme five days before the meeting, which is a useful way for the administrator to monitor and record how the job is progressing. Parties using DBC may wish to consider adding in this provision.

Risks register

3.44 This is an optional provision that, if selected, requires the contract administrator to establish and maintain a risks register (cl A10 in CBC, or A8 in DBC). Initially, the register will list the risks and mitigation procedures identified and agreed at the pre-start meeting, but these are likely to be adjusted as the project progresses and new risks are identified. The register could be in the form of a simple list (or more likely a spreadsheet), and it is common practice to place a priority on the risks (e.g. highly likely, not likely), as well as to set out the measures or actions to be taken should a risk materialise and who will take them. Strictly speaking there is no contractual obligation to comply with any actions set out (unless, of course, the register includes obligations already covered in other contractual provisions). Nevertheless, it may be a useful point of reference in day-to-day communications and a good discussion item at progress and other meetings.