CLAUSE 8 : General Obligations of the Contractor This clause sets out the Contractor's general obligation to carry out his dutiescarefully and in accordance with the contract. The Contractor is also obliged toprovide all labour, supervision materials etc necessary to carry out and completethe project.The Contractor is fully responsible for site operations and methods of construction but is not responsible for the design or specification of thepermanent works or for temporary work not designed by him. If the contractrequires the Contractor to undertake any of the design, he shall be fullyresponsible for that design even if the Engineer approves it.
The principle and much of the wording of clause 8 of the 3rd Edition has beenretained but rearrangements and additions have occurred. The reference todesign in sub-clause 8.1 is new as is the final sentence of sub-clause 8.2.8.1:This clause adds detail to the basic obligation set out in the ContractAgreement clause 3 whereby "the Contractor ... covenants with the Employer toexecute and complete the Works and remedy any defect therein ...".In common with the 3rd Edition but unlike the ICE 5th or 6th, the words "with duecare and diligence" are used. It would, however, be no defence to an allegation of breach of a contract which provides strict liability, for the Contractor todemonstrate that he used due care and diligence, for example in the selectionand ordering of a material which proved to be defective. The purpose of thewords may be to make it clear to the Contractor that the Employer is notconcerned solely with the result but with the means whereby the Contractor achieves that result. Under clause 41.1 (Commencement of Works) theContractor is obliged to proceed after the commencement of the works "with
dueexpedition and without delay". Thus, a Contractor is obliged not only to completethe works on time but to work diligently throughout. Some U.K. contracts expressthis as an obligation to proceed "regularly and diligently". This obligation isreflected in clause 46 (Rate of progress) which gives the Engineer power to order the Contractor to expedite the works.The reference to design poses a danger to the Contractor. As the contractincludes the specification, drawings and bills of quantities, the Contractor wouldbe well advised to check carefully that there is no design obligation hidden awayin any of these documents. There is some comfort in clause 8.2 with its generalstatement that the Contractor is not responsible for design and the requirementfor express provision of the Contractor's design obligation. For a comment on thelevel of design responsibility imposed, see clause 7.3 (Responsibility unaffectedby approval).The second sentence of clause 8.1 should be read in conjunction with clause11.1 (Inspection of Site) and clause 12.1 (Sufficiency of Tender). Naturally, it isimpossible for a specification or the Bills of Quantities to specify every nut, boltand screw-driver that may be required. See, however, clause 51.1 (Variations)item (e) "execute additional work of any kind necessary for the completion of theWorks".CLAUSE 8.1 (Contractor's general responsibilities)The following additional paragraph has been added:-"The Contractor shall give prompt notice to the Engineer, with a copy to theEmployer, of any error, omission, fault or other defect in the design of or Specification for the Works which he discovers when reviewing the Contract or executing the Works."The wording closely follows a recommendation contained in the World Bank'sSample Bidding Documents published in December 1991.
The first question raised by this addition is whether a Contractor will be liable for breach of this clause if he should, and any reasonably diligent Contractor wouldhave discovered the error. In other words, is the test purely subjective?It would normally be very difficult to prove that a Contractor knew of but failed toreport a design error. The Employer will therefore no doubt turn to the openingwords of the clause which require the Contractor "with due care and diligence (to).... execute and complete the Works". The Employer will argue that this duty of care applies to the new obligation imposed by the additional paragraph.It is submitted that such an argument should not succeed. As stated in thecommentary to Clause 8 in the main work, the English courts have notestablished a policy in relation to an implied obligation to warn the Employer of adefect actually found. The English courts have therefore been unwilling even toentertain an argument that a Contractor without design responsibility should berequired by implication to perform a check of the design.The wording of the additional paragraph supports the view that it is only designerrors actually discovered that give rise to the duty, particularly because it wouldbe difficult to argue that the discovery of faults is embraced within the meaning of the "Works" which have to be executed and completed with due care anddiligence.The second question raised by the wording is whether there is any obligationupon a tenderer who discovers design errors during his review of the tender documentation either to disclose the error at that stage or immediately uponsignature of the contract. The inclusion of the conditions in the tender documents does not of itself impose obligations upon the tenderer who onlysubmits to those conditions and the obligations contained therein when he signsthe contract. If an Employer wishes to impose such an obligation upon atenderer, he must require
tenderers expressly to disclose any errors found and toinclude within the tender form a declaration that no such errors have been found.It will of course be appreciated that the identification of errors is a part of theestimator's art as it enables the tenderer to reduce his overall price in anticipationof additional payment for the variations that are necessitated by the errors.If the error has been discovered during the tender process, it was no doubt theintention of the draftsman that such errors should be disclosed immediately after the signature of the contract if not before. If this was indeed the intention, it mustbe doubted whether it is reflected in the wording which is more consistent with adiscovery after the date when the contract is entered into.Clause 1.5 (Notices, consents etc) requires that notices such as the one to begiven under this paragraph be in writing.".... any error , omission, fault or other defect in the design ...". This wording iswide enough to cover conceptual defects as well as errors in detailed design. Thus, a Contractor may be obliged to give notice if, for example, he considersthat the design of a structural element gives an inadequate factor of safety.Equally, he could be obliged to notify if he considered that the design of theworks did not make proper allowance for the integration of a subsequent phaseof the project. The damages that could flow from breach of such a wide-rangingobligation could be considerable and would
come
as
a
great
surprise
to
anyContractor
from
whom
they
were
claimed.Although it is by no means beyond dispute, it is submitted that the Contractor must not only discover the error but also recognise it as such. It may very wellbe the case that design error is a matter of opinion in which case it is submittedthat the Contractor must form the requisite opinion. This places an even greater burden upon
any Employer seeking to claim from a Contractor under this clause.Notification under this paragraph will generally lead to a review of the element of design in question and, where appropriate, a variation would be ordered under clause 51.1 (Variations). However, this wording is not limited to design executedby the Engineer but also calls upon a Contractor to notify defects in his owndesign. In these cases, notification will lead to the submission of reviseddrawings for approval under clause 7.2 (Permanent works designed byContractor).8.2:The Contractor's responsibility for site operations and methods of construction is reflected in clause 12.2 (Adverse physical obstructions or conditions) where the Engineer may choose to leave the Contractor to suggestmeans of overcoming the obstacles. Under clause 14.1 (Programme to besubmitted) the Engineer may require the Contractor to provide a written generaldescription of the arrangements and methods which the Contractor proposes touse for the execution of the works. Clause 14.4 (Contractor not relieved of dutiesor responsibilities) makes plain that showing the Engineer does not relieve theContractor of his responsibility for his methods. An exception to the principle of leaving method to the Contractor is found in clause 46 (Rate of progress) whichgives the Engineer the right to withhold consent to the Contractor's proposedacceleration measures.The Contractor's responsibility under this clause is qualified by clause 20.4(Employer's risks) which gives to the Employer responsibility for a number of circumstances causing loss or damage including item (g) which makes "loss or damage to the extent that it is due to the design of the Works" by the Engineer arisk upon the Employer.FIDIC does not produce a design and build form of contract. However, design bythe Contractor is referred to in four other clauses namely:-clause 7.2.Permanent Works designed by Contractor clause 20.4Employers
Risksclause 39.1Removal of improper work, materials or plantclause 49.3Cost of remedying defects A Contractor concerned at the number of references to design by the Contractor contained in the conditions will find some reassurance in the statement in thissubclause that he is not responsible for the design and the references toexpress provision in the final sentence of this clause, clause 7.2 (Permanentwork designed by Contractor) and, in relation to nominated subcontractors,clause 59.3 (Design requirements to be expressly stated). For a comment on thelevel of design responsibility imposed, see clause 7.3 (Responsibility unaffectedby approval). A difficult question arises as to the responsibilities of a contractor without design responsibility. In McQuade v Solchek Pty Limited (1989) B&CL131, it was held by the Supreme Court of South Australia that there was noimplied warranty by the contractor that a steeply sloping driveway, the design andlocation of which was specified by the owner, would be fit for its intended use.However the Supreme Court of Canada in Brunswick Construction v Nowlan(1974) 49 DLR(3d) 93 held that where the Employer had obtained a design froma professional but had not retained the designer to supervise, the contractor wasliable where the design was found to be defective as he should have warned theEmployer of the design defects. The duty to warn principle is not settled or wellestablished in the English courts. One Official Referee in Edac v Moss (1984) 30BLR 141 expressed the view that a contractor who finds a defect in the designgiven to him is under an implied obligation to warn the Employer of the defect,whilst another, in University of Glasgow v Whitfield (1988) 42 BLR 66, considereda duty to warn would only exist if the contractor had voluntarily assumed such aduty. See also Investors in Industry Commercial Properties v
South Bedfordshire(1986) 1 QB 1034 where the Court of Appeal held that an architect has a duty towarn in relation to structural design defects even where an engineer had beenappointed.
