- clause 8.

1 (Contractor's general responsibility) which requires the

Contractor to design etc "with due care and diligence"; and

- clause 8.2 (Site operations and methods of construction) which makes the
Contractor "fully responsible" where the contract expressly provides that part of
the works are to be designed by him.

It is submitted that references in sub-clause 7.2 to "suitability and adequacy"

relate to the obligation to satisfy the Engineer and do not amount to an absolute
obligation to provide a suitable and adequate design. As to clause 8.2, the
responsibility must be read in the context of "the adequacy, stability and safety of
all Site operations and methods of construction". A normal reading of that clause
would not suggest that the responsibility was intended to go further. Accordingly,
one is left with clause 8.1 and a due care and diligence obligation. Thus, if an
element of design failed but the Contractor was able to demonstrate that he had
used due care and diligence, for example by having state-of-the-art design
techniques or specifications, he would not be liable. In this context, see
Eckersley v Binnie and Partners (1988) CILL 388 and the Court of Appeal's
judgement in relation to the Abbeystead disaster. This level of responsibility
conforms to the normal responsibility imposed on the Engineer by his terms of
engagement. It might be thought peculiar if the Contractor's design duty was
more onerous than that of the Engineer. In this context, it should be noted that
the Contractor's liability for the selection of materials, which itself might properly
be considered a design function, is an absolute one: see clause 36.1 (Quality of
materials, Plant and workmanship).

Two English cases in which the designer's liability was held to be an absolute
one, namely to ensure that the works were fit for their purpose were IBA v EMI
and BICC (1980) 14 BLR 1, a decision of the House of Lords, and Greaves v
Baynham Meikle (1975) 2 Ll R 325. For a case on the Contractor's liability for
design carried out by subcontractors, see Cable (1956) Limited v Hutcherson
Bros (1969) 43 ALJR 321. For a recent consideration, by the Supreme Court of
Queensland, of the standard of responsibility taken by a contractor, see Doug
Rea Enterprises v Hymix Australia (1988) B&CL67.

CLAUSE 8 : General Obligations of the Contractor

This clause sets out the Contractor's general obligation to carry out his duties
carefully and in accordance with the contract. The Contractor is also obliged to
provide all labour, supervision materials etc necessary to carry out and complete
the project.

The Contractor is fully responsible for site operations and methods of

construction but is not responsible for the design or specification of the
permanent works or for temporary work not designed by him. If the contract

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requires the Contractor to undertake any of the design, he shall be fully
responsible for that design even if the Engineer approves it.

The principle and much of the wording of clause 8 of the 3rd Edition has been
retained but rearrangements and additions have occurred. The reference to
design 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 Contract
Agreement clause 3 whereby "the Contractor ... covenants with the Employer to
execute 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 due
care 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 to
demonstrate that he used due care and diligence, for example in the selection
and ordering of a material which proved to be defective. The purpose of the
words may be to make it clear to the Contractor that the Employer is not
concerned solely with the result but with the means whereby the Contractor
achieves that result. Under clause 41.1 (Commencement of Works) the
Contractor is obliged to proceed after the commencement of the works "with due
expedition and without delay". Thus, a Contractor is obliged not only to complete
the works on time but to work diligently throughout. Some U.K. contracts express
this as an obligation to proceed "regularly and diligently". This obligation is
reflected 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 contract

includes the specification, drawings and bills of quantities, the Contractor would
be well advised to check carefully that there is no design obligation hidden away
in any of these documents. There is some comfort in clause 8.2 with its general
statement that the Contractor is not responsible for design and the requirement
for express provision of the Contractor's design obligation. For a comment on the
level of design responsibility imposed, see clause 7.3 (Responsibility unaffected
by approval).

The second sentence of clause 8.1 should be read in conjunction with clause
11.1 (Inspection of Site) and clause 12.1 (Sufficiency of Tender). Naturally, it is
impossible for a specification or the Bills of Quantities to specify every nut, bolt
and 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 the
Works".

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 the
Employer, of any error, omission, fault or other defect in the design of or

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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's
Sample 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 would
have 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 to
report a design error. The Employer will therefore no doubt turn to the opening
words 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 the

commentary to Clause 8 in the main work, the English courts have not
established a policy in relation to an implied obligation to warn the Employer of a
defect actually found. The English courts have therefore been unwilling even to
entertain an argument that a Contractor without design responsibility should be
required by implication to perform a check of the design.

The wording of the additional paragraph supports the view that it is only design
errors actually discovered that give rise to the duty, particularly because it would
be 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 and
diligence.

The second question raised by the wording is whether there is any obligation
upon a tenderer who discovers design errors during his review of the tender
documentation either to disclose the error at that stage or immediately upon
signature of the contract. The inclusion of the conditions in the tender
documents does not of itself impose obligations upon the tenderer who only
submits to those conditions and the obligations contained therein when he signs
the contract. If an Employer wishes to impose such an obligation upon a
tenderer, he must require tenderers expressly to disclose any errors found and to
include 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 the
estimator's art as it enables the tenderer to reduce his overall price in anticipation
of 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 the
intention 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 must
be doubted whether it is reflected in the wording which is more consistent with a
discovery after the date when the contract is entered into.

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Clause 1.5 (Notices, consents etc) requires that notices such as the one to be
given under this paragraph be in writing.

".... any error , omission, fault or other defect in the design ...". This wording is
wide 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 considers
that 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 the
works did not make proper allowance for the integration of a subsequent phase
of the project. The damages that could flow from breach of such a wide-ranging
obligation could be considerable and would come as a great surprise to any
Contractor 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 well
be the case that design error is a matter of opinion in which case it is submitted
that 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 executed
by the Engineer but also calls upon a Contractor to notify defects in his own
design. In these cases, notification will lead to the submission of revised
drawings for approval under clause 7.2 (Permanent works designed by
Contractor).

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 suggest
means of overcoming the obstacles. Under clause 14.1 (Programme to be
submitted) the Engineer may require the Contractor to provide a written general
description of the arrangements and methods which the Contractor proposes to
use for the execution of the works. Clause 14.4 (Contractor not relieved of duties
or responsibilities) makes plain that showing the Engineer does not relieve the
Contractor 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) which
gives the Engineer the right to withhold consent to the Contractor's proposed
acceleration 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 a
risk upon the Employer.

FIDIC does not produce a design and build form of contract. However, design by
the Contractor is referred to in four other clauses namely:-

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