Last edited 29 Sep 2014

Duty of care in building design and construction


[edit] Introduction

A duty of care to ensure that another party does not suffer unreasonable harm or loss can arise in the construction industry as a result of:

[edit] Contractual obligations

Contractual obligations can be express terms of the contract or implied terms. Terms may be implied as a matter of law (legislation of general application to all contracts) or as a matter of fact (the presumed intention of the parties).

Generally, the contractual obligation is a duty to perform services with reasonable skill and care, that is, to the standard of a reasonably competent professional. However, if an appointment is made on the basis of specialist capabilities, then the duty will be to perform services with the standard of care that would be expected from a reasonably competent specialist, rather than the standard of a general practitioner operating in that field.

On design and build projects (subject to the express terms of the contract) there is an implied term that the building will be fit for purpose. This duty exists provided there is reliance by the client on design decisions taken by the contractor, for example, there is no reliance if the client insists on a particular construction method which subsequently fails.

The “fitness for purpose” obligation is not generally extended to designers unless the contract specifically provides for this (for example if they have accepted obligations under a design and build contract.

The Defective Premises Act 1972 provides that a contractor building a residential dwelling or converting or enlarging an existing dwelling, has a duty to ensure that the building work ' done in a workmanlike or, as the case may be, professional manner with proper materials and so that as regards the work the dwelling will be fit for habitation when completed'

A duty of care can be restricted (subject to the Unfair Contract Terms Act 1997) or extended by agreement, and contractual rights (but not obligations) can be assigned to other parties unless the contract specifically prohibits this.

NB Other statutory duties may exist, for example in relation to waste handling, CDM, environmental protection and so on. Duties here may apply not only to contractors and consultants, but also to the client and workers. In addition, there is an implied duty to warn, if proposed works are likely to pose a danger.

[edit] Tort of negligence

A concurrent duty of care exists in tort of negligence unless the contract has specifically restricted this duty.

Contractors and consultants will generally owe a duty of care in tort to their clients and third parties to take reasonable care to avoid causing personal injury or damage to property (other than to the works themselves).

Consultants will normally also owe their clients a duty of care in tort for the quality of their work, but this duty is not generally be owed by contractors.

In the absence of a contract, contractor design liability may arise in tort by reason of a duty to warn. This arises when a reasonably competent contractor should have realised that a design or elements of the design were likely to be defective.

Purely economic loss is generally not recoverable in tort other than where the loss is consequential upon damage for which a duty is owed, or where there is an assumption of responsibility, special relationship or reliance.

[edit] Collateral warranties

The case of Murphy v Brentwood District Council made clear that there is no duty of care to subsequent purchasers in respect of latent defects as they are a purely economic loss. As a result, collateral warranties have emerged creating a contractual duty of care to a third party who is not party to the original contract. A typical example would be where an architect accepts a duty of care to the occupier of a development in relation to defects which may arise.

[edit] The Contracts (Rights of Third Parties) Act

The Contracts (Rights of Third Parties) Act, 1999 enables third party rights to be created by a contract. This is seen by some to offer an alternative to collateral warranties.

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