In the case scenario, Artless Enterprises Ltd1(‘Artless’), a property developer engages2Pig’s Ear Edifices LLP (‘Pig’s Ear’)3(“BDB”) as the main Contractor for the development of a modest student halls ofresidence in Nottingham, England, under an un-amended 2016 JCT StandardBuilding Contract, with quantities (JCT SBC/Q 2016).
Subsequent to obtaining planning permission, the siteclearance and early work on the foundations are completed by Pig’s Ear in quicktime. It seems that that the progress4of works are good, however, major discrepancies and divergences are discoveredin a number of key aspects when Pig’s Ear is later presented with the projectdrawings. The project is managed by Artless without any supervision and later,serious defects emerge from the construction works. 1. IssuesHere, the numerous issues to be deliberated as listedbelow. In the project, Artless failed to appoint an architect/ contract administrator to monitor the works, offer minimum supervision of theconstruction works, are late in issuing relevant construction drawings /information to Pig’s Ear and provided Pig’s Ear with faulty design drawings forroof truss. Derick Idle, Pig Ear’s managing partner, becomes concerned thatroof trusses specified in the design documents provided by Artless may not onlybe inadequate, but potentially (and positively) dangerous. It is not clear ifthe works were completed on time, however, prior to the completion date, the managingdirector of Artless, discovers that Pig’s Ear have installed a faulty narrowexterior disabled ramp to a staircase and fire escape to an external gablewall, both of which were not built in conformity to the contract documentation.
To evaluate the contractual and legalresponsibilities of Artless and Pig’s Ear, it is necessary to understand theobligations of the parties under the JCT 2016 suite and compliance to various provisionsof legislation. 2. RulesThe primary Employer’s duties under the contract relateto an obligation to co-operate5and render payment to the Contractor. The specific duties under the JCT SBC/Q2016 suite will include obligation to give possession6of the site (clause 2.4), obligation to administer the site (to makeappointments of contract administrator, clause 3.
5.1, comply with constructiondesign and management regulation7– clause 3.25 and not to interfere with certifying powers), obligation to issueinstructions – clause 2.12.1, provide information and obligation to providepayment to the contract. A Contractor has an obligation to execute works in agood8and workmanlike manner (clause 2.1) using the skill and care9expected of a builder of ordinary competence. The clause further specifies thatthe works are to be carried out in compliance with (a) contract documents (b)construction phase plan and (c) statutory requirements10.
Clause 2.15 requires the Contractor to give notice to the Employer in the eventthat the Contractor discovers any error, omission or inadequacy or anydiscrepancy between any of the contract documents. In limited circumstances,the Contractor’s obligations may extend to a duty to warn the Employer inrelation to defects11discovered in the plans and drawings provided to the Contractor. The Construction(Design And Management) Regulations 201512(CDM 2015) imposes general duties for parties which can be broadly categorizedas (i) appointments of professionals (ii) cooperating with each other (iii)reporting dangerous conditions (iv) provide clear information or instructions.
Under clause 2.12.1 of JCT SBC/Q 2016, the architectis required to issue any further drawings or details necessary to explain thecontract drawings, or enable the Contractor to carry out and complete the worksin accordance with the contract.
Once the Contractor has applied in writing tothe architect for relevant information and instructions, the architect mustprovide this within a reasonable timescale. If the architect fails to providethe required information and instructions within a reasonable timescale, itmight constitute a ‘relevant event’ under JCT SBC/Q 2016. Clause 3.18 statesthat, where there is work not in accordance with the contract, the architectcan require that it is made good at the Contactor’s cost (in terms of time andmoney). A breach of contract occurs when one party to thecontract fails to perform on or more of his/her contractual obligations. If abreach of contract has occurred, the party pursuing the matter must firstidentify the terms (either express or implied) of the contract that are notbeing complied with. There are consequences for any breach, sometimes an awardfor damages for the loss13or allow the innocent party to terminate the contract, the breach itself doesnot terminate the contract. The contract comes to an end when obligations have beensatisfactorily performed, to be satisfactory, the performance must be preciseand exact14.
Inthis context, a construction defect is defined as a defect in the design,workmanship, and/or materials used on a project that results in a failure of acomponent part of a building and causes damage to person or property. Thebuildingdefects in construction mostly relate to faulty material15, workmanship or design16 which may result infinancial loss17to a party associated with the project. The JCT 2016 suite has provisions where acts oromission by either party will constitute a relevant delay event due to breachof obligations or building defects. The relevant events under Employer’s obligation relate toforce majeure, compliance to instruction deferment of site possession andsuspension of contract works.
A legal remedy might not necessarily require theparty to perform an obligation precisely in the terms undertaken but ratherwill give innocent party in the form of damages or monetary compensation. 1 Artless Enterprises Ltd is the Employer for whose benefit the works are carried out.2 A contract is part of law of ‘obligations’, which may be defined asthe agreements between the two parties, which creates, for those two parties,legally binding rights and obligations. The basic formula in contract is thatthere must be an offer followed by unconditional acceptance, which is how theagreement is reached. 3 Pig’s Ear Edifices LLPis the Contractor who is required to execute the contract works. 4 Contractor has an implied obligation under the conrtact to carryout works in an orderly manner.
5 The Employer should do nothing that will impede the Contractor inperforming its obligations under the contract and (thereby) from executing theworks in a regular and diligent manner. See LondonBorough of Merton v. Stanley Hugh Leach Ltd.
, (1985) 32 B.L.R.
51.6 R v. Walter CabottConstruction Ltd.
(1975) 21 B.L.R 42 and T & R Duncanson v.
The Scottish CountyInvestment Co. Ltd. 1915 S.C. 1106 and Ductform Ventilation (Fife) Ltd.
v.Andrews–Weatherfoil Ltd. 1995 SLT 88. 7 Clause 3.23 of JCT SBC/Q 2016 ensures that the Employer’s obligationsunder the CDM Regulations are given contractual effect; so that a relevantbreach of the CDM Regulations would constitute a breach of contract,8 The obligation iscontinuous throughout the construction process – it does not simply arise on completion of theworks, Surrey Heath Borough Council v.Lovell ConstructionLtd. and Another (1988) 42 B.L.
R. 25.9 The ‘due and proper completion of the work’ does not involve any absoluteor quasi-absolute obligation, but requires the contractor …to adopt the usualrecognised standards and practice in the trade which a careful contractorwould employ in carrying through the contract to its completion’,refer to dicta of Lord President Clyde in the case of Morrison’s Associated Companies Ltd. v. James Rome & Sons Ltd.
1964S.C. 160.10 It imposes an obligation on the Contractor to comply with any ruleor order made under any statute or directive having the force of law whichaffects the Works or performance of any obligations under the Contract.11 In Chesham Properties vBucknall (1996), it was considered by the court whether project managers,architects, engineers and quantity surveyors had a general duty to Employer towarn about actual or potential deficiencies. The obligations were decided wasbased on terms of engagement which demonstrated the importance of express terms12 A statutory regulationin United Kingdom which deals with responsibilities of the Employer andContractor. 13 Photo Production v Securicor1980 AC 87.
14 Union Eagle Ltd v GoldenAchievement Ltd 1997 AC 5.15 William Cory & Son vWingate Investments (1980) 17 BLR 109.16 The Co-operative InsuranceSociety Limited v Henry Boot Scotland Limited 2002 EWHC 1270.17 The normal measure of damages for defective work is the cost of reinstatementtaken at the time when the defect was discovered (East Ham Corporation v Bernard Sunley 1966 3 ALL ER 619). The awardof damages is based on compensatory principle, the purpose of which is to putthe claimant back in to the same financial position a he would have been in butfor the breach.