Callow Construction Limited Problem Question - Assignment Example

Callow Construction Limited Problem Question Question A The architect of GPD has remedial options as specified within the terms of the standard formof contract under the Joint Contract Tribunal (JCT) 98. These options are primarily related to the contractor’s use of inferior material and defective workmanship and are determined by reference to the contractor’s legally binding obligations as set out within the body of the JCT 98 standard form of contract. To this end, the first binding obligation is found in Clause 2.1 of JCT 98. Clause 2.1 of the JCT 98 standard form of contract imposes upon the contractor four specific duties.1 First the contractor under a JCT 98 standard form contract is required to complete the works in a manner consistent with the contractual documents. Secondly, in complying with the contractual documents the contractor is required to use material matching the quality and standards provided for in the contract documents. Thirdly, the contractor is required to ensure that workmanship also matches the standard and quality provided for in the contract documents. Finally, where the quality and/or standard is a matter for which the architect’s opinion is required, the quality and standard will be determined by reference to the architect’s “reasonable satisfaction.”2 It can be gleaned from the facts of the case for discussion that the architect’s satisfaction with the standard and quality of workmanship and material is required. The architect conducted the inspection and by doing so it is reasonably assumed that the inspection was only carried out to test the quality and standard of the material and workmanship. In any event it was held in Crown Estates Commissioners v John Mowlem & Co. [1994] 70 BLR 1 that once the architect under a JCT contract issued a certificate of approval the contractor would not be liable for any defects in material and/or workmanship.3 Implicitly, the architect could therefore refuse to issue a certificate of approval in light of his opinion with respect to the defective nature of the contractor’s workmanship and material. Certification confirms that the work was carried out in conformity with the contract documents.4 Presumably, refusing certification means the opposite. JCT 98 however responded to this Crown Estates ruling by modifying the strength of the architect’s approval so that it is not conclusive evidence of the quality and standard of the contractor’s work and material. Accordingly, under a JCT 98 contract the architect’s approval will only be regarded as conclusive evidence of the architect’s satisfaction and/or approval of the quality and standard of the contractor’s material and workmanship5 Either way, the architect’s approval via certification is entirely important as it speaks to non-conformity on the part of the contractor. The only real consequence of the JCT 98 modification is to ensure that if the architect erroneously approves the quality and standard of the work the contractor can still face liability for defective or non-conforming workmanship and material. Clauses 8.1.1 and 8.1.2 of the JCT 98 standard contract form appear to be repetitious of Clause 2.1 in that clauses 8.1.1 and 8.1.2 require that the materials, goods and workmanship comport with the standards and quality provided for in the contract bills.6 The position under the JCT 98 standard form of contract is therefore unquestionably one that insists that the contractor’s quality and standard of work and material be consistent with specifications contained in the contracting documents. The architect has the power either directly or indirectly to determine whether or not those standards and quality have been met and to determine whether or not to issue a certificate or to make orders requiring rectification. In other words, the architect has the power to issue instructions or confirmation.7 The contractor has two options open to him. First, he might be able to claim that material required in the contract was not reasonably capable of procurement.8 This defence is made possibly be Clause 8.1.1 of the JCT 98 standard form contract which also repeats the provisions of Clause 2.1. The difficulty with this however, is the fact that claiming that material was unobtainable does not explain defective work and moreover, does not explain why the contractor would not have alerted the employer and/or the architect to the fact prior to continuing with the work. The second defence open to the contractor falls under the purview of the doctrine of temporary disconformity. However, this defence is also unlikely to succeed since the volume of defective work is too numerous and too excessive to be considered of a temporary nature.9 Question B Clause 13.2.1 of the JCT 98 standard form contract confers upon the architect the authority to issue “variation instructions”.10 These instructions are obviously meant to bring the nonconforming work to the standard specified in the JCT 98 contract. Essentially, the standard and quality most be consistent with the contract and typically to the reasonable satisfaction of the architect. There could be a conflict between the standards specified in the contract and the architect’s satisfaction. The court held in National Coal Broad v Wm Neill and Son (St. Helens) Ltd [1984] 1 All ER 555 that the contractor would be in breach of the contract should he fail to complete the work in compliance with contract standards even if the architect approved.11 Essentially, the JCT contract requires that the in addition to the contractor’s duty to provide a standard of work and material consistent with the contract documents, the contractor must also comport with the general principle that all material and workmanship be of a “satisfactory quality.”12 This standard is gleaned from Supply of Goods and Services Act 1982. The courts appear to be inclined to adopt the standard similarly. In Crown Estate Commissioners v John Mowlem and Co. Ltd, the court held that the “contract administrator’s satisfaction” would apply to all standards of work under the relevant contract.13 In other words, should the architect require replacement work in accordance with the relevant standard under the JCT 98 contract, those standards would be measured by specific reference to two sources. First it would be measured by reference to contract specifications. The standard and quality of work and material would be specified in the contract bills and the main contract. Secondly, the completed work would be measured by reference to the architect’s satisfaction and approval. Replacement work would also include the imposition of a duty to carry out the work in a “proper and workmanlike manner.”14 Question C With respect to the problem associated with dampness emerging during the defects liability period, the measures open to the architect under JCT 98 largely depends on the facts. For instance JCT 98 Clause 20.1 provides for indemnity on the part of the contractor to the employer for any claims occurring as result of injuries and/or damages arising out of work carried out unless the manner in which the work was carried out was due to negligence on the part of the employer or one of his agents.15 In other words, if the contractor is liable for any damages and/or injuries arising out of the dampness emerging during the defects liability period if the manner in which he conducted his works gave rise to the dampness and by extension the damages and/or injuries. The law of tort may function to complicate matters for the employer. For instance under the Occupiers Liability Act 1957, the employer as the occupier of the construction site is liable for any defects in the property to third parties entering the site. The liability may also be founded at common law under the doctrine of vicarious liability. In this regard, the principle is liable for the negligence or other tort of his agent or servant in respect of any acts or omissions. This is so even if the contractor is an independent contractor.16 Even so, the contractor is not going to be exempt from liability as he too falls under the purview of the Occupiers Liability Act 1957 as a person with substantial control over the premises and for all intents and purposes an occupier of the premises. Clause 20.1 of the JCT98 standard form of contract functions to resolve this issue, ensuring that the contractor cannot by his own negligence benefit from the prospect of sharing liability with the employer. This is entirely unfair since the employer relies on the contractor’s special skill and expertise. The consequences of Clause 20.1 would therefore be to ensure the fair and just allocation of risks. If the dampness emerging is entirely a result of the sub-standard workmanship or sub-standard material used by the contractor, the contract will be liable for any damages arising out of the dampness and the defect that caused it. Likewise, if the employer’s negligence gave way to the defect that caused the dampness and any ensuing damages, the employer would be solely responsible for the damages. Bibliography Chappell, D. and Parris, J. (2007) Parris’s Standard Form of Building Contract: JCT 98. Blackwell Publishing. Crown Estates Commissioners v John Mowlem & Co. [1994] 70 BLR 1. Lintest Builders v Roberts [1980] 13 BLR 38. MacRoberts. (1999). MacRoberts On Scottish Building Contracts. Blackwell Publishing. Murdoch, J. and Hughes, W. (2008) Construction Contracts: Law and Management. Routledge, Taylor and Francis. National Coal Broad v Wm Neill and Son (St. Helens) Ltd [1984] 1 All ER 555. Ndekugri, I. and Rycroft, M. (2009) The JCT 05 Standard Building Contract: Law and Administration. Butterworth. Read More