1 THE CONTRACTOR ’ S GENERAL OBLIGATION
In both Books, the Contractor is to:
●
design, execute and complete the works in accordance with the contract,
and
●
remedy any defects in the works, so that
●
when completed, the works shall be fit for the purposes for which the
works are intended as defined in the contract.
An important feature of this general obligation is the requirement to
complete the works so that they are ‘
fit for the purposes ’ for which they are
intended ‘
as defined in the contract ’. The Contractor under such a fitness for
purpose obligation is in principle liable even if he took reasonable care in, for
example, the design of the facility if the end product does not achieve the
purposes for which it was intended.
But how are these intended purposes to be assessed? In the FIDIC Books
this is by reference to the terms of the contract: the works are to achieve the
purposes
defined in the contract ; these definitions are to anchor the intended
purposes which the end product must achieve. This places a lot of weight,
therefore, on the contract documents specifying the intended purposes suffi-
ciently clearly and adequately; but care needs to be taken to avoid doing so too
narrowly or too broadly for the design-build contractor to do his job and be
responsible for the end result.
Note also that ‘defined’ is not the same as
express : an intended purpose for
some part of the plant or facility (light fittings, for example) could be implied
or to be inferred from the descriptions of the items used rather than expressly
stipulated.
Whether the works or some part of them is ‘fit for the intended purpose’
may not always be clear. Take, for example, a contractor who is to design and
constructs a spa hotel in a seaside resort. The site directly faces the open sea.
The Employer ’ s Requirements specify ‘
steel frame windows ’ of certain dimen-
sions ‘
for all sea-facing windows ’.
Within the fixed price the contractor supplies and installs carbon steel
frames with a much lower corrosion resistance than inox or chromium-alloy
steel. However, following installation the employer requires that the win-
dows be replaced with inox frames, on the basis that carbon steel frames are
not fit for the purpose. The employer contends that, in the sea-facing posi-
tion, they will corrode at more than three times the rate of chromium-alloy
steel of median grade.
We can sympathise with the employer, but is he right? The contractor, after
all, might reply that the Employer ’ s Requirements did not include any particu-
lar type or grade of steel and no service life was (let us assume) ever specified.
He could say he was entitled to design for the less expensive carbon steel solu-
tion and was not in breach of any contract terms. In a case like this there are
arguments which could be adduced on either side. Can the contractor be
required, he might ask, to install more expensive materials within the lump-
sum fixed price even if they were never specified? Or any performance stand-
ard in terms of service life ever stated?
The words of clause 4.1 are ‘…
for which the Works are intended as defined in
the Contract ’. But what was the intended purpose as defined in the contract?
Could one say that the contract at least implicitly defined the intended pur-
pose as ‘use of frames to windows directly facing the sea’, as the plans and site
details showed the location? Or could one argue persuasively that in the
absence of any express service life requirement the need to replace the carbon
steel frames more frequently than chromium-alloy frames is at bottom a
maintenance issue and not one about fitness for purpose?
Again arguments could be adduced on both sides. The employer here
would certainly be helped by the fact that an intended purpose might be
implied or implicit; but to avoid arguments of this kind the Employer ’ s
Requirements, or other contract documents, should have been more explicit
on the point if (as it evidently was) it was an important one.