Briefing: Interpreting contractors’ mandated standard of design

Abstract

This briefing covers contractors’ standard of design responsibility by analysing current standard forms of contract and reviewing recent relevant case law. A report ranks failure to understand and/or comply with contractual obligations as the third top cause of construction disputes in the UK. The distinction between reasonable skill and care and fitness-for-purpose responsibilities is explained. A fitness-for-purpose standard accepted by contractors will not be back-to-back with a designer who will only accept a reasonable skill and care responsibility. Professional indemnity insurance policies will cover a failure to exercise reasonable skill and care but usually exclude protection for fitness-for-purpose obligations. Current Joint Contracts Tribunal, NEC and International Federation of Consulting Engineers contracts are analysed. It is notable that these standard forms of contracts adopt different stances on the important matter of a contractor’s mandated standard of design. Technology and Construction Court, Supreme Court and Scottish Court of Session Inner House decisions are reviewed. The three cases found the contractor liable for a fitness-for-purpose obligation. Therefore, contractors should interpret a contract’s conditions and schedules for their mandated standard of design before agreement.