In relate to an obligation to co-operate[5] and

In the case scenario, Artless Enterprises Ltd1
(‘Artless’), a property developer engages2
Pig’s Ear Edifices LLP (‘Pig’s Ear’)3
(“BDB”) as the main Contractor for the development of a modest student halls of
residence in Nottingham, England, under an un-amended 2016 JCT Standard
Building Contract, with quantities (JCT SBC/Q 2016).

 

Subsequent to obtaining planning permission, the site
clearance and early work on the foundations are completed by Pig’s Ear in quick
time. It seems that that the progress4
of works are good, however, major discrepancies and divergences are discovered
in a number of key aspects when Pig’s Ear is later presented with the project
drawings. The project is managed by Artless without any supervision and later,
serious defects emerge from the construction works.  

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1.      Issues

Here, the numerous issues to be deliberated as listed
below.

 

In the project, Artless failed to appoint an architect
/ contract administrator to monitor the works, offer minimum supervision of the
construction works, are late in issuing relevant construction drawings /
information to Pig’s Ear and provided Pig’s Ear with faulty design drawings for
roof truss. Derick Idle, Pig Ear’s managing partner, becomes concerned that
roof trusses specified in the design documents provided by Artless may not only
be inadequate, but potentially (and positively) dangerous. It is not clear if
the works were completed on time, however, prior to the completion date, the managing
director of Artless, discovers that Pig’s Ear have installed a faulty narrow
exterior disabled ramp to a staircase and fire escape to an external gable
wall, both of which were not built in conformity to the contract documentation.

 

To evaluate the contractual and legal
responsibilities of Artless and Pig’s Ear, it is necessary to understand the
obligations of the parties under the JCT 2016 suite and compliance to various provisions
of legislation.   

     

2.     
Rules

The primary Employer’s duties under the contract relate
to an obligation to co-operate5
and render payment to the Contractor. The specific duties under the JCT SBC/Q
2016 suite will include obligation to give possession6
of the site (clause 2.4), obligation to administer the site (to make
appointments of contract administrator, clause 3.5.1, comply with construction
design and management regulation7
– clause 3.25 and not to interfere with certifying powers), obligation to issue
instructions – clause 2.12.1, provide information and obligation to provide
payment to the contract.

 

A Contractor has an obligation to execute works in a
good8
and workmanlike manner (clause 2.1) using the skill and care9
expected of a builder of ordinary competence. The clause further specifies that
the 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 event
that the Contractor discovers any error, omission or inadequacy or any
discrepancy between any of the contract documents. In limited circumstances,
the Contractor’s obligations may extend to a duty to warn the Employer in
relation to defects11
discovered 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 categorized
as (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 architect
is required to issue any further drawings or details necessary to explain the
contract drawings, or enable the Contractor to carry out and complete the works
in accordance with the contract. Once the Contractor has applied in writing to
the architect for relevant information and instructions, the architect must
provide this within a reasonable timescale. If the architect fails to provide
the required information and instructions within a reasonable timescale, it
might constitute a ‘relevant event’ under JCT SBC/Q 2016. Clause 3.18 states
that, where there is work not in accordance with the contract, the architect
can require that it is made good at the Contactor’s cost (in terms of time and
money).

 

A breach of contract occurs when one party to the
contract fails to perform on or more of his/her contractual obligations. If a
breach of contract has occurred, the party pursuing the matter must first
identify the terms (either express or implied) of the contract that are not
being complied with. There are consequences for any breach, sometimes an award
for damages for the loss13
or allow the innocent party to terminate the contract, the breach itself does
not terminate the contract. The contract comes to an end when obligations have been
satisfactorily performed, to be satisfactory, the performance must be precise
and exact14. In
this 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 a
component part of a building and causes damage to person or property. The
building
defects in construction mostly relate to faulty material15, workmanship or design16 which may result in
financial loss17
to a party associated with the project.

 

The JCT 2016 suite has provisions where acts or
omission by either party will constitute a relevant delay event due to breach
of obligations or building defects. The relevant events under Employer’s obligation relate to
force majeure, compliance to instruction deferment of site possession and
suspension of contract works. A legal remedy might not necessarily require the
party to perform an obligation precisely in the terms undertaken but rather
will 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 as
the agreements between the two parties, which creates, for those two parties,
legally binding rights and obligations. The basic formula in contract is that
there must be an offer followed by unconditional acceptance, which is how the
agreement is reached.

3 Pig’s Ear Edifices LLP
is the Contractor who is required to execute the contract works.

4 Contractor has an implied obligation under the conrtact to carry
out works in an orderly manner.

5 The Employer should do nothing that will impede the Contractor in
performing its obligations under the contract and (thereby) from executing the
works in a regular and diligent manner. See London
Borough of Merton v. Stanley Hugh Leach Ltd., (1985) 32 B.L.R. 51.

6 R v. Walter Cabott
Construction Ltd. (1975) 21 B.L.R 42 and T & R Duncanson v. The Scottish County
Investment 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 obligations
under the CDM Regulations are given contractual effect; so that a relevant
breach of the CDM Regulations would constitute a breach of contract,

8 The obligation is
continuous throughout the construction process – it does not simply arise on completion of the
works, Surrey Heath Borough Council v.
Lovell Construction
Ltd. and Another (1988) 42 B.L.R. 25.

9 The ‘due and proper completion of the work’ does not involve any absolute
or quasi-absolute obligation, but requires the contractor …to adopt the usual
recognised standards and practice in the trade which a careful contractor

would 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. 1964
S.C. 160.

10 It imposes an obligation on the Contractor to comply with any rule
or order made under any statute or directive having the force of law which
affects the Works or performance of any obligations under the Contract.

11 In Chesham Properties v
Bucknall (1996), it was considered by the court whether project managers,
architects, engineers and quantity surveyors had a general duty to Employer to
warn about actual or potential deficiencies. The obligations were decided was
based on terms of engagement which demonstrated the importance of express terms

12 A statutory regulation
in United Kingdom which deals with responsibilities of the Employer and
Contractor.

13 Photo Production v Securicor
1980 AC 87.

14 Union Eagle Ltd v Golden
Achievement Ltd 1997 AC 5.

15 William Cory & Son v
Wingate Investments (1980) 17 BLR 109.

16 The Co-operative Insurance
Society Limited v Henry Boot Scotland Limited 2002 EWHC 1270.

17 The normal measure of damages for defective work is the cost of reinstatement
taken at the time when the defect was discovered (East Ham Corporation v Bernard Sunley 1966 3 ALL ER 619). The award
of damages is based on compensatory principle, the purpose of which is to put
the claimant back in to the same financial position a he would have been in but
for the breach.