Design and build contracts: conflict between law and practice

Traditional analysis of the contractual relationships established by a building project would commonly reveal the following: the person for whom the building is being constructed (the ‘employer’ or ‘client’) would enter into contracts with professional designers (known jointly as the ‘design team’) for the provision of a design; and would in addition contract separately with a building contractor, in terms of which the latter would agree to supply the necessary materials and to carry out the construction works. A clear demarcation was therefore preserved between the ‘design’ and ‘construction’ functions. The modern tendency is to deviate from this ‘traditional’ procurement method: today, the contents of construction contracts vary considerably, ranging from those which include a restricted element of design to be carried out by the contractor to those variously known as ‘design and build’, ‘turnkey’ or ‘package deal’ contracts where the contractor assumes, in addition to his construction obligations, responsibility for all, or a large proportion of, the design. Many contracts, entered into in either the ‘traditional’ or the ‘design and build’ format, contain express provisions detailing the obligations of the parties, and this practice is supported by the various bodies involved in the construction industry, who produce a number of standard forms of contract. Such contracts will frequently specify in particular the level of responsibility undertaken by the contractor or design team in respect of the design1. In the event, however, that there are no express imposition of design responsibility and a dispute arises between the parties, the courts will seek to imply such an obligation. With a ‘traditional’ procurement method, the standard of care to be employed by the professional design team will usually be implied as that imposed on any professional, namely ‘reasonable skill and care’ whereas in a ‘design and build’ contract, the case laws indicate that the contractor, in the absence of any express contractual rebuttal, will be under an obligation to ensure that the finished product will be (reasonably) ‘fit for its intended purpose’2. The significance of the imposition of this fitness for purpose obligation upon a contractor in a design and build contract is therefore that a higher standard will be required of a single contractor than that which is imposed cumulatively on the contractor and design team in a traditional form of contract. This paper will consider not only the strict liability regime of fitness for purpose obligation as it has been implied in design and build contracts but also its (often conflicted) practical implications, by comparing practices and experience elsewhere