A contractor should seek clarification as to where his shop drawing responsibility begins at the outset.
In many construction contracts, the issue of contractor's responsibility for the design of the project when it is provided by an architect, engineer or some other third party often arises. It is of particular problem where the general clauses in the general conditions of the contract are not specific as to the contractor's responsibility.
Under clause 8.1 of the much used old 1987 Fdration Internationale des Ingnieurs Conseils (FIDIC) fourth edition General Conditions of Contract for Works of Civil Engineering and Construction, the contractor is given a responsibility for design and materials. Clause 8.1 states: "The contractor shall, with due care and diligence, design (to the extent provided for by the contract), execute and complete the works and remedy any defects therein in accordance with the provisions of the contract. He shall provide all superintendents, labour, materials, plant, contractor's equipment and all other things, whether of a temporary or permanent nature, required in and for design, execution, completion and remedying of any defects, so far as the necessity for providing the same is specified in, or is reasonably to be inferred from the contract."
Upon first reading, this general clause imposes both design and material supply responsibilities on the contractor. However, read in conjunction with the specification and bill of quantities preamble, such responsibility may be restricted to specific areas. Experience suggests that these documents in particular need to be carefully reviewed to understand the extent of design responsibility.
Clause 4 of the 1999 FIDIC fourth edition covers many of the contractor's general obligations. Sub-clause 4.1 states his obligation to execute the works and requires any contractor-designed work to be (when completed) fit for the intended purpose defined in the contract. This is an important matter to be borne in mind when the tender documents are being written, particularly because of the absence of any reference to purposes which may reaso-nably be inferred from the contract. This obligation is implied in many jurisdictions, presumably on the basis that the risk should not be allocated to the employer. Although the risk is fairly allocated to the contractor, he may not be able to be indemnified by his insurers or his subcontractor consulting engineers.
In the new FIDIC clause 4, the contractor is only responsible for the design of permanent works to the extent specified in the contract. Sub-paragraphs 4.1(a) to (d) specify general requirements with respect to such designs, unless they are amended or replaced in the particular conditions. These general requir-ements are also stated in sub-clause 13.2 as being applicable to any subsequent contractor-designed 'value engineering' proposals, unless otherwise agreed by both parties.
Duty to warn
If the engineer's contractual drawings or specification prove to be defective, the contractor cannot be held liable under the contract. Moreover, under the laws of most Gulf States, including those of Oman, there is no express duty to warn and such duty can only be considered in the context of the customary rules applicable under the business transaction and any duty to mitigate.
In spite of this, the contractor should not keep silent if a contractual specification or design defect comes to light. If the defect leads to a total or partial collapse or threatens the safety or sturdiness of the building, then under the laws of some of the Gulf States, such as that of the UAE, a strict liability is jointly and seve-rally imposed on the consultant, architect, engineer and contractor.
If the contractor had alerted the engineer to the defect but was still compelled to proceed, he should seek some written protection from the engineer or the employer. Failing this, he should ensure written evidence of his concerns is registered in the project documentation. This may not necessarily prevent the strict liability laws applying but will facilitate the inclusion of the engineer in any legal proceedings or in cases of recovery against the engineer where the action is based on the operation of law and an obligation created by legislation rather than contract.
Contractor's losses from an engineer's defective design
If the contractor suffers delay or incurs costs as a result of defects in the engineer's design, it may be necessary to consider whether or not the engineer could be held liable directly to the contractor. The engineer would not be party to an FIDIC-type contract and thus, normally, the contractor would have no contractual right of action against the engineer as there would be no privity of contract. Any claim would have to be brought by the contractor against the employer.
However, it is possible that the law gover-ning the contract may impose liability upon the engineer in certain circumstances. In Dubai, the engineer will not generally be liable to the contractor for any failure on his part, such liability only being owed by the engineer to the employer and in accordance with the agreement between the employer and the engineer. However, elsewhere, for example, in Bahrain and Qatar, if the facts warrant it, the contractor may have a cause of action against the engineer.
Design and drawings
'Where is the line between an architect/engineer's duty to design the works or a system and the contractor or subcontractor's obligation to produce working shop or installation drawings,' is a common question raised by construction professionals. The reality is that such line depends on each case, bearing in mind the contract, law and facts. For example, there have been arbitral decisions whereby 'design drawings' have been found not to include installation drawings.
The most appropriate approach would be for the contractor to seek clarification as to where his shop drawing responsibility begins in relation to the contractual specification and drawings at a tender stage in the project.
In practical terms, the contractor should be intimately familiar with the contract at all stages of the project and ensure it is strictly applied. All contracts should be scrutinised in the context of relevant state law to understand the full extent of the risks.
By Nigel Truscott
© businesstoday 2005
