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was ultimately persuaded to imply a completion date (on the basis that no commercial party would contemplate a contract without one); however, he refused to imply a term for sectional completion, even though it seemed fairly clear that this was what the parties had intended.

10.5LIABILITY IN TORT FOR NEGLIGENCE

The possibility of bringing an action in the tort of negligence is important in the construction context in two distinct situations. The first is where there is no contract between the party who has suffered loss and the party who caused that loss. We consider this problem in relation to claims by a contractor against the contract administrator (Section 18.2.3), claims by an employer against a subcontractor (Section 19.5.1) and claims by a person who acquires a defective building against the designer or constructor responsible for the defects (Section 21.1).

The second situation in which negligence becomes relevant is where the parties are linked by a contract, but the claimant sees an advantage in framing the claim in tort. In practical terms, the most important differences between contract and tort that might prompt such a choice are the different time periods within which each type of claim must be brought if it is not to be statute-barred. Claims under contract might be limited or barred by express contract conditions.

Under the Limitation Act 1980, an action for breach of contract must normally be commenced within six years of the relevant breach (or twelve years if the contract is made by deed). An action in tort, on the other hand, must be commenced either within six years from the date on which the claimant suffers damage or within three years from the date on which any latent damage is or ought to be discovered. Tort claims within these rules are also subject to a final ‘longstop’ time bar 15 years after the defendant’s breach of duty. It is clear from these different rules that there will be many situations in which an action in contract would be barred by the Limitation Act, but an action in tort would not.

After many years of uncertainty, the House of Lords noted in Henderson v Merrett Syndicates Ltd 29 that the liability in contract did not prelude concurrent liability in tort. It was then thought that, where the facts of a case satisfy the requirements of claims in both contract and tort, the claimant is in principle free to choose which cause of action to pursue. It is now clear from Robinson v PE Jones (Contractors) Ltd 30 that concurrent liability should not always be assumed. In that case it was decided that a builder did not owe a duty of care in tort coextensive with the contractual relationship. This was because the builder could not be said to have assumed responsibility for economic loss for any party other than the party with whom he contracted. It was noted that the position might be different in the case of a professional for whom it will be more readily found to have assumed responsibility to a wider range of persons.

In seeking to establish concurrent liability, it is obviously important to know whether the relationship between a claimant and a defendant is one of sufficient

29[1994] 3 All ER 506.

30[2011] EWCA Civ 9.

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‘proximity’ to create a duty of care in the tort of negligence on the basis of an assumption of responsibility. In this connection, the law currently appears to require that the claimant has relied on the defendant for advice, in the sense in which those concepts were used in the case of Hedley Byrne & Co Ltd v Heller & Partners Ltd.31 And here the courts now appear, following Robinson v P E Jones, to be drawing a distinction between consultants and contractors. Hence, it is now clear that the relationship between an employer and an architect or other design consultant will found a duty of care in tort, but that the relationship between employer and contractor will not do so. This follows Nitrigin Eireann Teoranta v Inco Alloys Ltd 32 where it was held that a specialist manufacturer of pipe work could be liable only in contract to the employer who purchased pipes; there was no parallel duty of care in tort.

One final point that is worth making about concurrent liability concerns the defence of contributory negligence. This defence, which operates in cases where the claimant’s loss is attributable partly to the claimant’s own fault, results in a proportionate reduction of the damages payable by the defendant.33 The defence is certainly available where an action is brought in the tort of negligence. It is also available where an action for breach of contract is based on facts that would have supported a tort claim (i.e. where there is concurrent liability).34 It is available in a contract for the supply of goods and services where it is the services which have not been provided with the appropriate skill and care.35 However, the Court of Appeal has confirmed that it does not apply to a claim for breach of a strict contractual obligation.36 In such a case, the court is forced (somewhat unrealistically) to rule that the employer’s loss has been caused entirely by either the contractor’s breach of contract or the employer’s fault.

31[1964] AC 465.

32[1992] 1 All ER 854.

33Law Reform (Contributory Negligence) Act 1945, Section 1.

34Forsikringsaktieselskapet Vesta v Butcher [1988] 2 All ER 43.

35Trebor Bassett Holdings Ltd v ADT Fire and Security Plc [2012] EWCA Civ 1158.

36Barclays Bank plc v Fairclough Building Ltd (1994) 68 BLR 1.

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11 Contractor’s obligations

The contractor’s obligations begin with the obligation to construct the works in accordance with the documents within the required time. This Chapter deals with the fundamental obligations and associated obligations as to workmanship, quality of materials, co-ordination and management of the works. Obligations as to time are dealt with in Chapter 14 and obligations as to insurance and bonds are dealt with in Chapter 17.

The exact nature of what the contractor undertakes depends upon the way the contract is written. If the contract is for a complete building, such as a dwelling, then it is implied that the contractor will provide everything that is indispensably necessary to achieve the result, regardless of what is contained in the specifications.1 Where the contract makes clear that the bills of quantities contain an exhaustive definition of the works (as under JCT SBC 11, clause 4.1), the contractor’s obligation is limited to providing what is described in the bills. If this is not sufficient for completion of the building, the employer must pay for extra work.2 Similarly, NEC3 (clause 20.1) limits the contractor’s obligation to providing the works as described in the Works Information. Under FIDIC Red Book 1999, the contractor is to design, execute and complete the Works in accordance with the contract, meaning the specification, drawings, schedules and other contract documents, taken together (clause 4.1).

11.1STANDARD OF WORK

The contractor’s basic obligation, so far as the standard of work is concerned, is to comply with the terms of the contract. This includes both express terms (such as the requirement of JCT SBC 11, clause 2.3 that work shall be of the standards described in the bills) and implied terms (such as the principle that all materials shall be of ‘satisfactory quality’).

In addition, there are often provisions in the bills for work to be to the satisfaction of the contract administrator. This might seem to suggest that the contract administrator has an absolute right of rejection of such work, but JCT SBC 11 places a limit upon this power. Clause 2.3.3 makes clear that, where approval of workmanship or materials is a matter for the opinion of the contract administrator, ‘such quality and standards shall be to his reasonable satisfaction’. So, where work is subject to the subjective test of the contract administrator’s satisfaction, the wording of the JCT contract applies reasonableness to the test of satisfaction. This

1 Williams v Fitzmaurice (1858) 3 H & N 844.

2 Patman & Fotheringham Ltd v Pilditch (1904) HBC 4th ed, ii, 368.

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can be contrasted sharply with ICC 11, clause 13 in which the engineer has complete authority to approve or reject work, regardless of what the bills might say about quality or workmanship, with no apparent test of reasonableness.

Where a contract requires work to be to the satisfaction of the contract administrator, an important issue is whether this becomes the only contractual standard, or whether the contractor must also satisfy whatever objective standards are contained, expressly or impliedly, in the contract documents. In other words, is it open to an employer to argue that, notwithstanding its approval by the contract administrator, certain work does not comply with a standard set out in the contract bills, or falls below the standard of ‘satisfactory quality’ laid down in the Supply of Goods and Services Act 1982? In short, is the contractor under one obligation or two?

The answer to this question, as is so often the case, is that everything depends upon the wording of the particular contract. The weight of authority has traditionally been in favour of making the contractor satisfy both standards although, under an early version of JCT 98, the position appeared to be different. In Crown Estate Commissioners v John Mowlem & Co Ltd,3 it was held by the Court of Appeal that the clause making the final certificate conclusive as to the contract administrator’s ‘satisfaction’ applied to all items of work under the contract, not just to those for which that satisfaction was expressly required. This ruling is discussed in Section 18.2.1, under the heading ‘Conclusiveness of certificates’.

The phrase ‘standard of work’ in fact contains three separate, though linked, ideas, which are discussed below.

11.1.1Workmanship

The standard of workmanship may be defined in considerable detail by the contract, for example by requiring it to comply with an appropriate code of practice. Under JCT SBC 11, such a requirement would appear in the bills, and would have contractual force by virtue of clause 2.3.2. This provides that ‘workmanship for the works … shall be of the standards described in the contract bills’. Clause 2.3.3 adds that, where the bills do not set a standard, the workmanship ‘shall … be of a standard appropriate to the works’. By contrast, in clause 7.1 of FIDIC 1999 Red Book the works are to be executed in the manner specified in the Contract and in a proper workmanlike and careful manner, in accordance with good practice. A similar, if not identical, obligation would in any case be implied by law since, in the absence of any express terms covering this issue, the courts will imply a term in the contract that the work will be carried out with proper skill and care, i.e. in a ‘workmanlike’ manner. If part of the work is to be designed by the contractor, then the standard of workmanship will be set out in the Employer’s Requirements for the Contractor’s Design Portion (CDP) or otherwise in the Contractor’s Proposals.

3 (1994) 70 BLR 1.

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It is at least arguable that ‘workmanship’ refers only to the standard of the finished item, and not to the method used to achieve that standard, certainly in building contracts. If this is so, then the contract administrator has no power to control the manner of working at the time it is being carried out. However, JCT SBC 11 clause 2.1 gives the contract administrator such power by providing that ‘the contractor shall carry out … the works in a proper and workmanlike manner’. If the contractor breaches this, then clause 3.19 empowers the contract administrator to issue whatever instructions are necessary. Even if these constitute a variation, the contractor will not be entitled to any payment nor to any extension of time. By contrast, the custom in civil engineering is for a more open and involved relationship between engineer and contractor as regards methods of work and temporary works. For example, clause 13.1 in FIDIC 1999 Red Book gives the engineer power to give instructions about or to vary plant, materials or services necessary for the permanent works including tests on completion, boreholes and the like. Changes can also be made to the sequence and timing of the execution of the works.

NEC3 makes no reference to workmanship. The contractor’s obligation is to complete the works in the works information, and that specifies and describes the works or states constraints on how the contractor provides the works (clause 11.2 (19)). The NEC3 form is unusual in stating that this information can be given either as part of the contract documents in the contract data or in an instruction. Under clause 27.3 the contractor is obliged to obey an instruction which is in accordance with the contract. It is important to note that, in any contract, the contractor is responsible, not only for personally performing unsatisfactory workmanship, but also for that of any sub-contractor, either domestic or nominated.

11.1.2Standard of materials

Clause 2.3.1 of JCT SBC 11 states that all materials and goods shall … so far as procurable, be of the respective kinds and standards described in the Contract Bills. This wording allows for the eventuality that some things available at the time of tender may become unavailable. Again, ICC 11 and JCT IC 11 all place a similar obligation upon the contractor, but none of them makes allowance for materials that may have become unprocurable.

Contemporary construction contract drafting seems to be developing in two ways. First, quality of materials is increasingly a matter dealt with in the specification (or NEC3’s works information). Second, there are increasingly detailed provisions relating to testing. For example, FIDIC 1999 Red Book, clauses 7.2 to 7.5, covers provision of samples, inspection of work done, testing and rejection of work; all anticipating that testing might be carried out during the works, not just at completion. NEC3 clause 40.1 anticipates that any tests carried out will be limited to those specified in advance in the Works Information.

It sometimes happens that the contract bills (inadvertently or deliberately) fail to specify the quality of the materials and goods. JCT SBC forms before 2005 made no express provision for this situation, leaving the issue to be decided on the basis of a term, implied by statute, which requires all goods and materials supplied

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to be of ‘satisfactory quality’. This phrase, which replaced the time-honoured expression ‘merchantable quality’,4 means that they are to be as free from any defects as it is reasonable to expect, given such factors as their price and the way they are described.

The situation has changed, at least in theory, under JCT SBC 11 clause 2.3.3 now provides that where the contract bills are silent as to standards, materials and goods supplied must be ‘of a standard appropriate to the works’. However, it is not easy to see what, if anything, this express term adds to the normal implied term.

It has been held by the House of Lords that a contractor will be liable if materials are unsatisfactory, even where it is the employer who has selected those materials (for example by nominating a particular supplier).5 However, the contractor will not be liable for defective materials where forced by the employer to obtain those materials from a supplier who, to the employer’s knowledge, excludes or limits liability for defects.6

11.1.3Testing and approvals

The question of whether or not a contractor’s work is up to the contractual standard may arise in arbitration or litigation, in the course of a claim for damages for breach of contract. More frequently, however, it will be something for the contract administrator to decide through the certification procedure, for which see Chapter 18. Whatever the precise nature of the contract administrator’s role in approving work, many contracts oblige the contractor to open up or uncover work for inspection or testing (JCT SBC 11 clause 3.17, ICC 11 clause 36). Such clauses usually make provision for the contractor to be paid compensation in the event that no defects are found.

11.1.4Suitability of materials

Even where materials are of satisfactory quality, in the sense of being free from defects, they may still not be fit for the purpose for which they are used. Where this is the case, it is again possible for the contractor to be liable, but the term to be implied here is of a more limited kind. Section 4 of the Supply of Goods and Services Act 1982 implies a term that goods shall be reasonably fit for the purpose for which they are supplied, but only where it is clear that the recipient is relying on the skill and judgement of the supplier. In practical terms, such reliance on the contractor (and thus liability for unfit materials) can only be found where the contractor has the choice of materials. There will be no such implied term in respect of materials specified by the employer or the architect, for here there is no reliance on the contractor. However, the mere fact that the contractor is given a limited choice does not necessarily mean that the employer is relying on the contractor’s skill and judgment; all the circumstances of the case must be taken

4 Sale and Supply of Goods Act 1994.

5 Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454.

6 Gloucestershire CC v Richardson [1969] 1 AC 480.