Once upon a time a man built a hut. He employed no architect, hired no builder and entered into no contracts. If it worked, he was happy – if not, he fixed it.
With industrialisation construction becomes an enterprise to be procured by clients who do not themselves build and may not occupy the completed buildings. They may have to borrow to finance and, in some cases, sell projects on concepts and promises long before they are built. To fulfil their undertakings, clients draw from the building trades and professions to form project teams. These teams will be bound by contract, regulated by statute and judged by the written authorities found in ever-evolving codes and standards. This brings with it scope for misunderstanding and sometimes disputes.
To reduce the risk of such misunderstandings and manage the threat of potential dispute, the adequate definition of roles and responsibilities is fundamental. The more clearly the role, responsibility and authority of each party is defined at the outset the less the risk of a dispute later on in the project.
Successful projects can often begin with good co-ordination and the development of an effective brief which expresses the client or clients’ aspirations or needs. The firmer and more clear the clients’ idea of what they want at the outset, the more straightforward it is to write the initial brief – a foundation for the entire contract and working relationship.
Along with developing the brief and exploring the possibilities it is important to agree probable costs and available budgets at an early stage. A brief should contain four key elements. Firstly it should cover the broad parameters and functional requirements for the facilities, and matters of quality and form. It should look at the costs and expenditure not only as items in themselves but also related to the quality parameters. A time scale for the project development and construction programme related to cost and quality should also be agreed among all parties. And finally, a lifetime assessment should be considered for the operating expectations, life expectancy, management and maintenance requirements.
Despite initial agreement, however, it is advised that these four components are reviewed at all stages of the evolution of the brief. In doing so it is helpful to gain the skills and expertise of the designer, cost consultant, project planner and facility manager.
The brief is the most important part of the Employer’s Requirements in design and build contracts and should form the basis of contracts when appointing designers. Getting this wrong often does not come to light until work is partly completed on site. However, this is usually a time when rectification is expensive and dispute even more costly.
A further issue to consider is that failure to comprehend and accommodate statutory and civil obligations can lead to abortive work and expensive mistakes. At the outset, it is the employer’s duty to obtain the necessary planning consents and Building Regulations approvals. This may be delegated to consultants or the contractor. Either way, the contractors are obliged, by statute, to build in compliance with applicable laws.
It is important to ensure that every party knows who is responsible for dealing with the regulating authorities. It is often difficult, where aspects of demonstrating compliance are allocated to individual sub-contractors to control and co-ordinate the work.
English property law is derived from custom, overlaid with statute, and can be confusing. A property right is a durable and transmissible right over property. These derive not only from ownership but also by way of easements, covenants, etc.
An important starting point is to establish ownership of the land or buildings to be developed and any way in which the owner’s rights are compromised by licenses, easements and covenants. Commencing work on a development which cannot proceed because of, for example, a right of way, results in abortive work. An employer may regard such an action as negligent and seek to recover their losses from those employed to carry out the development.
Detailing which is made difficult by an early lack of forethought increases the risk of failures in the performance of the finished work. This is often the consequence of separating the ‘conceptual design’ team from those who produce the detailed drawings for construction. A typical arrangement where consultant design is stopped at planning stage and the work thereafter carried forward by a design and build contractor. If the consultants know at the outset they will have to develop there concepts into working details, it is likely that more attention is paid to practicality and buildability.
If the detailing creates work which is difficult to perform or to supervise on site this not only creates the probability of error but potentially a claim that the design is defective. The designer should ensure that the work can be performed by those likely to be employed to do it, in the conditions that can be foreseen, by the exercise of the care and skill ordinarily to be expected of them. Similarly, the design should not create great difficulty for those who are to supervise and/or check that the work has been done correctly. Contractual requirements that designers thoroughly consider the ‘buildability’ and ‘supervisability’ of their designs could usefully be added to designers’ terms of appointment.
A well-drafted contract comes from a good understanding of the employer’s requirements. Production information should be produced in a form that is appropriate to the form of contract.
It is desirable to provide consistency and compatibility between the terms of each contract used for each member of the project team, including suppliers and sub-contractors. Where a contract is evidenced in writing by more than one document, the order of priority of the documents should be set out. Take care when setting out matters of detail. If these are in an incomplete form it can lead to dispute and disappointment. You must also be clear about the distinction between prescriptive and performance specifications.
In terms of oral and written agreements, whilst strictly, an oral agreement is as binding as a written contract, dispute is more likely and proof more difficult where the paperwork is deficient or non-existent. There can be merit in the old saying 'an oral contract isn’t worth the paper it is written on'.
Finally, the most important thing to remember is that all parties should understand what their contract requires of them before they execute it. Knowledge is what you get from reading the contract. Experience is what you get from not reading it. Many disputes arise because one or other of the parties to a written contract assumed, rather than read, its contents.