Author: Michael Mendelblat, Professional Support Lawyer, Construction and Engineering, London
In a construction project, how a builder and/or designer's potential liability is classified in the contract and technical documentation can be crucial to recovery of any costs associated with remedying a defect in design. In some cases, liability arises from failure to comply with a specified level of output, or because the design is otherwise unfit for purpose. If this is the measure of liability, all that matters is the result achieved and not merely whether reasonable care and skill were applied. In other cases, there will be no liability if reasonable care and skill were applied, irrespective of the outcome.
Some recent cases have highlighted the problems that can arise if the contract terms and the technical documentation conflict and prescribe different tests of liability. In the recent SSE case, the Court of Session in Scotland decided that a building contract, when looked at as a whole, provided for an obligation to exercise reasonable care and skill, rather than to achieve a particular result. An earlier case (Hojgaard) had come to the same conclusion but is now being appealed to the Supreme Court.
The lesson of these cases is that consistent drafting is necessary to avoid complications further down the line, but they do also indicate that the courts will not readily read technical documentation in such a way as to override contract terms. A priority of documents clause may also assist.
To read our e-bulletin on the SSE case please click here, and click here for our e-bulletin on the Hojgaard case.
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