- We continue our series of articles on the standard form JCT Design and Build Contract 2005 with a look at design obligations.
The employer’s design team provides the initial design in the “Employer’s Requirements”.
The contractor is required by clause 2.1 to complete the design, which is presented to the employer in the “Contractor’s Proposals”.
The contractor is not responsible for the whole of the design. Clause 2.17.1 makes the contractor responsible for the design of the contractor’s proposals and any other design he carries out. The contractor is not responsible for the design in the Employer’s Requirements.
If it is intended that the contractor will take responsibility for the whole of the design, the standard form contract must be amended.
Duty of care for design
In certain circumstances, a contractor will be responsible for the fitness for purpose of the works. This means that the finished project has to satisfy the employer’s intended purpose for the works. This is a higher obligation than is placed upon parties responsible only for design.
To avoid a fitness for purpose obligation in relation to its design, clause 2.17.1 limits the contractor’s liability to the same level as a professional designer. It states that the contractor has “the like liability […] as would an […] appropriate professional designer holding himself out as competent to take on work for such design […] to be carried out and completed by a building contractor who is not the supplier of the design”.
This wording limits the contractor’s responsibility to the relatively low standard of care required of a consultant at common law. The employer may wish to increase this standard of care.
However, many professional indemnity policies will not insure contractors against fitness for purpose, so it may not always be in the employer’s interest to include a fitness for purpose obligation.
The contractor must give notice to the employer of any discrepancies between the design documents.
The parties share responsibility for the cost and time implications of any discrepancies found.
- If the discrepancy is within the Contractor’s Proposals, the contractor bears the cost of changes required as a result of the discrepancy. If the discrepancy is in the Employer’s
- Requirements and it is not dealt with by the Contractor’s Proposals, then the contractor will be entitled to claim for any additional time or cost of making the required changes.
Limitation on design liability
Clause 2.17.3 contains an optional clause capping the contractor’s design liability for “loss of use, loss of profit or other consequential loss”. If the cap is to apply, the level of the cap is inserted at page 8 of the contract particulars.
- The wording of the cap means that direct losses, such as the cost of remedying any defects, do not fall within the cap.
- Any LADs claimed are stated not to count towards the cap.