Parties’ Responsibilities

Employer’s Role

The employer has a passive role under a building contract.  His principal obligation is to facilitate access to the works for the contractor and pay monies certified as due under the contract when due.

The employer must cooperate with the contractor where necessary to enable the contractor to discharge his duties.  He must not interfere with the contractor in carrying out his obligations.

The contractor cannot order the omission of work in order to give the work to another contractor. This is against his fundamental obligations.

The employer may or may not be obliged depending on the term of the contract, to obtain planning permission and procure building regulation compliance.  Under traditional contracts, the planning permission has been already obtained.  Under design and build contracts, the contractor may be obliged to work up and evolve the employer’s requirements and obtain planning permission for the same.

Failures of Employer

The employer may be obliged to nominate subcontractor.  Failure to do so may grant the contractor further time or entitlement to further payments for loss arising from the delay. Requisite nominations must be made within a reasonable period.  Where instructions are required, they must be given within a reasonable timeframe.

If the employer fails in his obligations such as to give possession of the site, give instructions or make nominations, he may forfeit his right to claim liquidated or fixed damages, for late completion. He may be liable to pay damages.

Standard contracts allow a choice as to who shall insure the works. Under one option, the employer may be obliged to insure the work. Under another option, the contractor insures.

Employer and Administrator

Many of the employers’ obligations in the broader sense are carried out by the architect or contract administrator.  However, the administrator/architect is not the agent of the employer for all purposes.  In some context he may be.

However, in other context the architect / contract administrator has independent and discretionary powers.  He must exercise these powers fairly and without improper interference by the employer. If the employer interferes with the free exercise of the architect’s/contract administrator’s independent functions (e.g., in relation to matters including particular issue of certificates) he may be in breach of contract to the contractor.

Liability of Contractors

The liability of the contractor derives from the express and implied terms of the contract. In some circumstances the contractor may also incur liability under the law of torts/civil wrongs.

The basic contractual obligations of the contractor are determined by the terms of the contract. The general principles of contract law will apply in relation to defining the terms of the contract and interpreting them. The contract may be spread amongst a number of documents.

General contract provisions apply to exemption The courts will seek to interpret the contract as expressed in the contract documents. The parol evidence rule applies. Generally, evidence will not be admitted to add, vary, contradict or detract from the written terms. However, there are exceptions.e.g.

• where words have a technical meaning which requires expert explanation
• where there are background circumstances that inform the contract
• where there is ambiguity or contradiction.

The contractor must use proper workmanship and use materials of good quality and fit for the purpose. There may be an implied warranty that the works will be fit for purpose.

The contractor’s basic obligation is to construct the works in accordance with the documents on time. Where the bill of quantities is part of the contract and contains a statement of the works, the contractor’s obligation is to do what is provided in the bill. If this is insufficient the contractor must pay for additional works necessary to complete the job as contemplated.

The contractor must comply with the express and implied terms of the contract. Where the bills form part of the contract, he must comply with the standards set out in the bills. He must also comply with implied obligations such that materials will be of merchantable quality.

Standard Required

Many building contracts provide that works are to be to the satisfaction of the contract administrator. However, the contract administrator does not possess absolute discretion in this regard. He must act reasonably.

here there are obligations in the contract to ensure that the work is of satisfactory quality, the contractor will generally be obliged to both satisfy this requirement as well as the specific requirement in the contract document.

It is generally the interpretation that the general requirements to provide good and workmanlike materials are not met, even though specified materials are used unless these have been selected by the employer. This is so even though materials have been approved by the contract administrator/architect.

The contract will state or imply that the works must be undertaken with proper skill and care. This is sometimes expressed in a good and workmanlike manner. Generally, the contract administrator may order that work be replaced where he is of the view that it is not in compliance with the contract.

The materials are to be of the respective types specified in the contract. Where not specified, they are to be of merchantable quality. They must also be fit for purpose, provided the employer is relying on the contractor’s skill. This will only be the case where the contractor may choose the material. If the employer has specified them, there is no reliance.

Where the bills specify the material to be used and the contractor has limited discretion, it may be held the employer has not intended to rely on the contractor’s skill and judgment.

In a traditional contracting job, there is no implied or expressed term that the final works itself will be fit for purpose. This may be the case however in design and build arrangement.

Liability to Others

Where there is a sufficiently proximate relationship between the contractor and a third party, there may be a liability in tort. In principle, where the relevant facts satisfy the possibility of a claim both for breach of contract and for tort. the claimant may choose which claim to make.

Where the relationship is sufficiently proximate and the claimant has relied on the defendant for professional services there may be a liability in tort. The relationship between a contractor or other design professional is likely to give rise to a duty of care in torts. It is less clear whether the relationship between an employer and contractor will do so. In these cases, it appears that there is a duty in contract only and no concurrent duty in tort.

Responsibility for Ground Conditions

The basic principle is that the physical state and condition of the site is the contractor’s risk.  It may be that the condition of the soil requires extra expense to make the works stable and performing and compliant to building regulation. In some cases, there may be specific works

The broad principle is that site conditions are a matter for the contractor’s even if plans and conditions are showed which contemplate certain types of works.  There is usually no general warranty that these works are sufficient.

There may, however, be circumstances which the employer expressly or impliedly warrants the accuracy of documents and proposed works, for example, relative to site conditions and foundations.  It is a matter of interpretation as to what, if anything is warranted.

Where the building contracts states that the bill of quantities has been prepared in accordance with standard methods of measurement, this may be sufficient in some circumstances. If a misrepresentation is made as to the true position on which the contractor relies, the employer is likely to be liable if it is a negligent or fraudulent or misrepresentation.