NEC4 ECC: Does the Contractor have a duty to Provide the Works using reasonable skill and care or fitness for purpose?

The Supply of Goods and Services Act 1982 implies a term into a contract that a supplier of a service will provide the service with reasonable skill and care. The accepted test for whether a professional person has provided the service with reasonable skill and care is the Bolam Test (Bolam v Friern Hospital Management Committee [1957] 2 All ER 118). The Bolam Test sets out that if a professional person carried out their work to a standard that a responsible body of competent members of the same profession would have accepted as proper, then that professional person is not guilty of negligence. As such, in the absence of any express term to the contrary in the contract, a professional designer has a duty to design the works with reasonable skill and care.

However, the Sale of Goods Act 1979 (amended by the Sale and Supply of Goods Act 1994) implies a term into a contract that where goods are supplied, the goods must be of a satisfactory quality and fit for all the purposes for which goods of the kind in question are commonly supplied. This is an absolute obligation to achieve a specified result and does not require any proof of negligence. As such, in the absence of any express term to the contrary in the contract, a contractor supplying goods has a fitness for purpose obligation, thus guaranteeing that the goods and the completed building will be fit for their intended purpose.

The core clauses in the NEC4 engineering and construction contract set out that the Contractor is required to Provide the Works in accordance with the Scope. Furthermore, a reason for the Project Manager not accepting a Contractor’s design is that it does not comply with the Scope. Whilst the contract does not specifically state that the works must be fit for purpose, in the absence of any express term to the contrary, the Sale of Goods Act implies that the completed building should be fit for its intended purpose.

However, if secondary option clause X15 “The Contractor’s Design” is selected in the contract, the standard of care is reduced to that of reasonable skill and care. The express term sets out that the Contractor is not liable for a Defect which arose from its design unless the Contractor failed to design the works using the skill and care normally used by professionals designing works similar to the works.

It should be noted that the NEC4 engineering and construction short contract also requires that the Contractor Provides the Works in accordance with the Scope. As such, the Contractor has a fitness for purpose obligation. However, the short contract does not include secondary option X15. Accordingly, a bespoke additional condition may be added in the Client’s Contract Data to reduce the standard of care to reasonable skill and care.

Relevant clauses: 20.1, 21.2, X15

 

Produced by Andrea Rae, Head of Legal and Commercial at Stradia, in conjunction with Quantity Surveyors International

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October 2021

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