Does your work scope include provision for any aspect of the design on the project? If you do have design responsibility under the contract, whether permanent or temporary, it is vital to determine exactly what level of responsibility is being allocated to you.
Is the scope of your responsibilities in relation to design clearly defined i.e. does it relate to the whole or only part of the works? If only part of works, which specific part?
Whilst you may only be responsible for
What legal duty of care do you have under the contract? In the absence of any such provision, it’s could be implied that you have a duty to exercise ‘reasonable skill and care’ when carrying out your design. It would be advisable to have a clause expressly limiting your liability to that of ‘reasonable skill and care’, otherwise, it could be implied that your design must be ‘fit for purpose’ which is more onerous.
You should check whether the contract has a ‘fitness for purpose’ clause. These clauses place a responsibility on you to ensure that your design will satisfy the performance specification of the project. Recent case law (SSE Generation Ltd v. Hochtief Solutions AG and another ) has suggested that, where both clauses exist, the fitness for purpose clause will be favoured by the courts, even if you can prove that you have exercised reasonable skill and care and regardless of whether any issues resulted from negligence on your part. If possible, you should seek to include a clause which specifically excludes a ‘fitness for purpose’ design obligation. If this is not possible, then it is important to check that the design is capable of satisfying the performance criteria and highlight any aspects of the design that are not.
Finally, seek to limit your overall financial liability with respect to design. As a worst-case scenario, this should be limited to that of your professional indemnity insurance policy. You should consult with your insurance provider prior to signing any contract as there may be provisions which invalidate your cover such as a ‘fitness for purpose’ clause (most insurance policies exclude cover for breaching such a clause). Furthermore, review the duration of your liability for latent defects after completion of the contract works and determine if this is acceptable. This duration should be stated in the contract.
What do you look out for when reviewing your design liability under a contract? Have you ever signed up to a higher level of responsibility than you realised? What was the outcome?
Please share your thoughts and comments.
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