Contractor's obligations under JCT Design and Build

Two of the contractor's key obligations are to:

• complete the design for the works; and
• carry out and complete the construction of the works in a proper and workman-like manner in accordance with the contract documents (article 1 and clause 2.1).

The scope of these obligations is clarified by reference to the contract documents and the definition of the works in clause 1.1.

Carry out and complete the construction

The obligation to carry out and complete the works in a proper and workmanlike manner is derived from the traditional form of procurement (whereby the contractor is tendered to build works which are already designed for a lump sum and has no design responsibility).

To satisfy this obligation the contractor is to carry out the works with all proper skill and care. A universal standard cannot be specified as this will be determined by reference to the terms of the contract (and the contract documents) as a whole.

If the contractor does not carry out and complete the works in a proper and workmanlike manner, clause 3.14 enables the employer, after consultation with the contractor, to issue instructions that are necessary. Even if these instructions constitute a change under clause 5.1, the contractor will be precluded from bringing a claim for an extension of time or loss and/or expense.

Complete the design

The contractor's obligation to complete the design is less clear.

The case of Co-operative Insurance v Henry Boot (2002) suggested that completing the design meant understanding the principles underlying the work carried out prior to appointment and forming a view of its efficiency.

However, clause 2.11 of the JCT Design and Build provides that the contractor is not required to take responsibility for the contents of the employer's requirements or for verifying the accuracy of the design contained within it (except as limited by clauses 2.13 to 2.15).

The duty imposed on the contractor for the design work is the same as the duty on an architect or other professional designer (clause 2.17) in that he or she is to exercise reasonable skill and care in the performance of his or her duties. This standard of care applies to any design comprised in the contractor's proposals or any design the contractor is to complete in accordance with the employer's requirements or the conditions of the contract. The case of Bolam v Friern Hospital Management (1957) held that the standard required by a professional was that of its professional peers.

At common law, where the design and build method of procurement is used there is an implied duty that the contractor will design and construct a building that will be reasonably fit for purpose. It was held in IBA v EMI and BICC (1980) that there is

'no good reason ... for not importing an obligation as to reasonable fitness for purpose into these contracts or for importing a different obligation in relation to design from the obligation which plainly exists in relation to materials'.

However, clause 2.17.1 expressly limits design liability to reasonable skill and care, therefore excluding the duty that the design is to be reasonably fit for purpose. This is significant as many professional indemnity insurers will not cover the fitness for purpose risk and the contractor is unlikely to agree to a duty, which in the event of a breach, he or she would have to remedy using his or her own funds.

Limitation of liability

Under clause 2.17.3 the liability of the contractor for loss of profit and consequential loss can be limited to the amount specified in the contract particulars. However, this limitation will not apply to work undertaken on dwellings and will not preclude the employer from claiming liquidated damages.

Contractor's design documents

Prior to practical completion, the contractor is to supply to the employer 'as-built drawings' (clause 2.37). This is so that the employer can carry out operations and maintenance of the constructed building.

By virtue of clause 2.38.1, copyright in all contractor's design documents remains vested in the contractor. However, clause 2.38.1 will not override any agreement between the contractor and the subcontractor and therefore should the architect, as subcontractor, retain copyright the contractor will not be able to pass on rights of copyright in the architect's design to the employer.

The employer is granted an irrevocable, royalty-free and non-exclusive licence to use and copy the contractor's design documents in clause 2.38.2. This is only enforceable if the contractor has obtained a similar licence from the relevant subcontractors.