The Dutch Ministry of Housing, Regional Development and the Environment engaged the Dutch Institute for Construction Law at the end of 2009 to draft a proposal for a technical revision of the 1989 Uniform Administrative Conditions for the Execution of Works ("UAV 1989"). A working group headed by Professor M.A.M.C. van den Berg was set up for this purpose.
On commencement of its assignment, the working group had (in brief) the following objectives: to bring the terminology of the UAV- GC 2005 into line with that of the Dutch Civil Code ("DCC"), to make any changes necessitated by the addition of title 12 ("contracting of work") to Book 7 of the DCC and to address bottlenecks from case law and legal literature.
The working group offered market parties and interest groups various opportunities to give their input, for example in an expert meeting held on 23 November 2010 or through the submission of written comments.
On 14 February 2011, the working group presented its draft UAV 2011 to the Minister of the Interior and Kingdom Relations. More clarity on whether, and if so, when, the UAV 2011 will enter into force is expected around mid July/August 2011. The proposed text, a compare version and an overview of the changes and commentary can be downloaded - in Dutch - from www.ibr.nl.
It can be concluded that the working group stuck closely to its assignment. The proposed changes are very limited and mainly of a textual nature. Since the publication of the draft text, many commentators have noted that the working group interpreted its assignment very narrowly and missed an opportunity to truly modernise the UAV. Below we will discuss some of the working group's proposals.
2. Proposed changes
Where relevant, the draft UAV 2011 includes provisions from the 1992 Uniform Administrative Conditions for the Execution of Technical Works ("UAVTI 1992"). Unlike the UAV 1989, the draft UAV 2011 therefore also covers the execution of technical works.
Section 5(5) of the UAV 1989 has been eliminated in the draft UAV 2011. Under this section, the principal is liable for the non-delivery or late delivery of: a) building materials to be procured from a supplier prescribed by the principal and/or b) building materials prescribed by the principal, unless the contractor can select the supplier of those materials. In both situations, the contractor has a best efforts obligation to do everything in all reasonableness necessary to compel performance or recover damages. By eliminating section 5(5) and adding the word "supplier" in section 6(27), the working group brought the supplier's legal position into line with that of the sub-contractor. Section 6(27) of the draft UAV 2011 reads as follows:
"If the principal demands the engagement of a particular sub-contractor or supplier, the principal cannot, as regards the performance of that sub-contractor or supplier, require more from the contractor than the contractor can require from that sub-contractor or supplier under the terms and conditions used by the sub-contractor or supplier and accepted or approved by the principal. If the prescribed sub-contractor or supplier fails to perform or fails to perform properly and on time, and the contractor has done everything in all reasonableness necessary to compel performance and/or recover damages, the principal must compensate the contractor for all extra costs incurred as a result, to the extent these are not compensated by the sub-contractor or supplier. On the other hand, the contractor must, at the principal's first request, assign the contractor's claim against the prescribed sub-contractor or supplier to the principal, up to the amount of the compensation received by the contractor from the principal."
Under the draft UAV 2011 a new paragraph 16a has been added to section 6 (obligations of the contractor):
"16a. If, when executing the work, objects or materials are discovered which can, in all reasonableness, be regarded as a source of possible harm to persons, property or the environment, the contractor must immediately notify the management of this. The contractor must immediately, if possible in consultation with the management, take the safety measures which the circumstances require."
According to the working group, the above paragraph was added in the interest of improved safety and environmental protection, as requested by market parties.
Sections 10 and 11 have been amended slightly. Section 10(3) (use of the work prior to completion) has been amended by adding the requirement that the contractor be heard. Section 11(2) (defects coming to light during the defects liability period) has been amended by adding that the contractor is not required to repair such defects if they "result from improper or careless use or can be characterised as normal wear and tear as a result of actual use".
Under both the DCC and the UAV, the basic premise is that after completion the contractor is no longer liable for defects in the work in the absence of – in short – a hidden defect, a defects liability period or a warranty. Pursuant to Article 7:758(3) DCC, a defect is "hidden" if the principal cannot reasonably be expected to have discovered it at the time of completion. Pursuant to section 12 of both the UAV 1989 and the draft UAV 2011, a defect is "hidden" if the contractor could not reasonably have discovered it despite close inspection at the time of completion of the work and, in addition, despite close supervision during the execution of the work. Under the UAV the contractor therefore has a stronger obligation (inspection at the time of completion as well as supervision prior to the completion) than under the DCC. Given its mandate, it would have been logical for the working group to have brought the rights and obligations under section 12 into line with Article 7:758(3) DCC, but it did not do so. A possible explanation for this is that the principal can have an obligation to object to a defect in a timely manner, and not only upon completion, on more general statutory grounds, such as Article 6:89 DCC (the obligation to complain within an appropriate period after the discovery of the defect) and/or the principles of reasonableness and fairness (Article 2:248 DCC). Seen in this light, the differences between the statutory rules and those under the UAV are perhaps smaller than would first appear.
Section 22(2) of the UAV 1989 and the amended section 22(2) of the draft UAV 2011 both relate to the scope of a warranty required by the contract documents. Under the current section 22(2), the warranty covers all "defects occurring during the warranty period which the principal shows, to a high degree of probability, must be attributed to less than sound quality or defective execution". Under section 22(2) of the draft UAV 2011, the warranty covers defects that "to a high degree of probability must be attributed to a circumstance which under the UAV can be imputed to the contractor". Besides the fact that the new provision is difficult to read, it stands out that the working group has not provided any clarity on the question whether it intended to make a substantive change to section 22(2) of the UAV 1989. It cannot be excluded that the new test differs in scope from the present one. This will ultimately be decided by the Construction Sector Arbitration Board or the civil courts.
Changes that are minor in nature but nevertheless worthy of mention include:
- a.the fine of NLG 75 per day in section 42(2) UAV 1989 has been changed to EUR 60 per day in the draft UAV 2011;
- b.whereas the drawing up of a general time schedule under section 26 UAV 1989 depended on there being an obligation to this effect in the contract documents, section 26 draft UAV 2011 makes this mandatory; and
- c.the wording of section 36 (changes in the contract documents) has, through the addition of section 36(1a) draft UAV 2011, been brought into line with Article 7:755 DCC (which may not be deviated from to the principal's detriment).
As stated above, the amendments are mainly of a technical nature. The change in section 22(2) (scope of warranty required by the contract documents) is perhaps the most striking one, although it is still unclear how the "imputability" criterion will in practice be applied (if and to the extent that the draft UAV 2011 is in fact adopted). The working group did not truly modernise the UAV, although in our opinion that would have been possible given its mandate.