In the case scenario, Artless Enterprises Ltd1
(‘Artless’), a property developer appoints2
Pig’s Ear Edifices LLP3
(‘Pig’s Ear’) as the main Contractor for the construction of a modest student
halls of residence in Nottingham, England, under an un-amended 2016 JCT
Standard Building Contract, with quantities (JCT SBC/Q 2016).
Subsequent to obtaining planning permission, Pig’s Ear
completed the site clearance and early work on the foundations. The progress4
of works are good, however, major discrepancies and divergences are discovered
in a number of key aspects when Pig’s Ear are given the project drawings. The
project was managed by Artless without any supervision of the works carried out
by Pig’s Ear and later, serious defects appear from the construction
Here, the numerous issues between Artless and Pig’s
Ear are listed below.
In the project, Artless failed to appoint an architect
or contract administrator to monitor the works, do not supervise the
construction works, are late in issuing relevant construction drawings to Pig’s
Ear and issued faulty roof truss design drawings to Pig’s Ear. Derick Idle, the
managing partner of Pig’s Ear, is worried that the roof trusses specified within
the design documents provided by Artless may not only be inadequate, but
potentially (and positively) dangerous. It is not clear if the works were
completed on time, however, prior to the completion date, the managing director
of Artless, discovers that the narrow exterior disabled ramp to a staircase and
fire escape to an external gable wall installed by Pig’s Ear are defective,
both of which were not built in conformity to the contract documentation.
To evaluate the contractual and legal
responsibilities of Artless and Pig’s Ear, it is necessary to understand the
obligations of the parties under the JCT 2016 suite and compliance to various provisions
The primary Employer’s duties under the contract are to
and provide payment to the Contractor. The obligations under the JCT SBC/Q 2016
suite are to give possession6
of the site (clause 2.4), to administer the site (to make appointments of
contract administrator (clause 3.5.1), to comply with construction design and
not to interfere with certifying powers of architect and to issue instructions to
Contractor (clause 2.12.1).
A Contractor has an obligation to perform works in a
and workmanlike manner (clause 2.1) using the skill and care9
expected of a builder with ordinary competence. The clause specifies that the
works are to be carried out in compliance with (a) contract documents (b)
construction phase plan and (c) statutory requirements10.
The clause 2.15 requires the Contractor to give notice to the Employer in the
event that the Contractor discovers any error, omission or inadequacy or any
discrepancy between any of the contract documents. In limited circumstances,
the Contractor’s obligations may extend to a duty to warn the Employer in
relation to defects11
discovered in the design drawings provided to the Contractor. The Construction
(Design And Management) Regulations 201512
(CDM 2015) imposes general duties for the parties which are broadly categorized
as (i) appointments of professionals (ii) cooperating with each other (iii)
reporting dangerous conditions and (iv) provide clear instructions.
Under clause 2.12.1 of JCT SBC/Q 2016, the architect
is required to issue any further details which are necessary to either explain
the contract drawings or allow the Contractor to carry out the works in
accordance with the contract. Once the Contractor has applied in writing to the
architect for relevant information or instruction, the architect must provide
this within a reasonable timescale. If the architect fails to provide the
required information and instructions within a reasonable timescale, it might
constitute a relevant event13
under JCT SBC/Q 2016. The clause 3.18 states that, where work is not in
accordance with the contract, the architect can require that it is made good at
the Contactor’s cost (in terms of time and money).
A breach of contract will occur when one party to the
contract fails to perform on or more of his/her contractual obligations. The
party pursuing the breach of contract must identify the terms (either express
or implied) of the contract that are not being complied with. In the event of a
breach of contract, the court may either award damages for the loss14
or allow the innocent party to terminate the contract. It is important to note
that the breach itself does not terminate the contract. The
contract comes to an end when obligations have been satisfactorily performed by
the parties and for it to be satisfactory, the performance must be precise and
this context, a construction defect is defined as a defect in the design,
workmanship, and/or materials used on a project that results in a failure of a component
part of a building and causes damage to person or property. The building defects in
construction mostly relate to faulty material16, workmanship or design17 which may result in
to a party associated with the project.
The JCT 2016 suite has provisions where acts or
omission by either party (failure to perform obligations or building defects) will
constitute a relevant delay event. The relevant events under Employer’s obligation relate to
deferment of site possession, suspension of contract works or failure to
provide instructions. A legal remedy might not necessarily require the party to
perform an obligation precisely in the terms undertaken but rather will give
innocent party the right to rescind the contract or monetary compensation.
1 Artless Enterprises Ltd is the Employer for whose benefit the works are carried out.
2 A contract is part of law of ‘obligations’, which may be defined as
the agreements between the two parties, which creates, for those two parties,
legally binding rights and obligations. The basic formula in contract is that
there must be an offer followed by unconditional acceptance, which is how the
agreement is reached.
3 Pig’s Ear Edifices LLP
is the Contractor who is required to execute the contract works.
4 Contractor has an implied obligation under the contract to carry
out works in an orderly manner.
5 The Employer should do nothing that will impede the Contractor in
performing its obligations under the contract and (thereby) from executing the
works in a regular and diligent manner. See London
Borough of Merton v. Stanley Hugh Leach Ltd., (1985) 32 B.L.R. 51.
6 R v. Walter Cabott
Construction Ltd. (1975) 21 B.L.R 42 and T & R Duncanson v. The Scottish County
Investment Co. Ltd. 1915 S.C. 1106 and Ductform Ventilation (Fife) Ltd. v.
Andrews–Weatherfoil Ltd. 1995 SLT 88.
7 Clause 3.23 of JCT SBC/Q 2016 ensures that the Employer’s obligations
under the CDM Regulations are given contractual effect; so that a relevant
breach of the CDM Regulations would constitute a breach of contract,
8 The obligation is
continuous throughout the construction process – it does not simply arise on completion of the
works, Surrey Heath Borough Council v.
Ltd. and Another (1988) 42 B.L.R. 25.
9 The ‘due and proper completion of the work’ does not involve any
absolute or quasi-absolute obligation, but requires the contractor …to adopt
the usual recognised standards and practice in the trade which a careful
would employ in carrying through the contract to its completion’,
refer to dicta of Lord President Clyde in the case of Morrison’s Associated Companies Ltd. v. James Rome & Sons Ltd. 1964
10 It imposes an obligation on the Contractor to comply with any rule
or order made under any statute or directive having the force of law which
affects the Works or performance of any obligations under the Contract.
11 In Chesham Properties v
Bucknall (1996), it was considered by the court whether project managers,
architects, engineers and quantity surveyors had a general duty to Employer to
warn about actual or potential deficiencies. The obligations were decided was
based on terms of engagement which demonstrated the importance of express terms
12 A statutory regulation
in United Kingdom which deals with responsibilities of the Employer and
13 A relevant event is defined as any impediment, prevention or default,
whether by act or omission, by the Employer, which will entitle the Contractor
to time and cost, Clause 2.29.7 of JCT SBC/Q 2016.
14 Photo Production v Securicor
1980 AC 87.
15 Union Eagle Ltd v Golden
Achievement Ltd 1997 AC 5.
16 William Cory & Son v Wingate
Investments (1980) 17 BLR 109.
17 The Co-operative Insurance
Society Limited v Henry Boot Scotland Limited 2002 EWHC 1270.
18 The normal measure of damages for defective work is the cost of reinstatement
taken at the time when the defect was discovered (East Ham Corporation v Bernard Sunley 1966 3 ALL ER 619). The award
of damages is based on compensatory principle, the purpose of which is to put
the claimant back in to the same financial position a he would have been in but
for the breach.