Construction Contracts, Negligence and Breach of Contract.
This article considers a real court case, highlights the key facts and legal point of the case, providing some important lesson that can be considered and applied in Construction Contracts.
In December 2001, Ms. Prim became interested in buying a 200-year old property in Devon. It was originally a coach house or agricultural building built into a hillside. It needed refurbishment. Ms. Prim commissioned a survey; the surveyor, Mr. Pernicks, valued the property at £150,000 and identified several defects, including movement of the structure, with extensive distortion of the walls and roof. Mr. Pernicks did not consider immediate action was essential but did recommend the obtaining of an engineer’s report. Ms. Prim did not take up Mr. Pernicks’ recommendation to instruct an engineer, bought the property and asked Mr. Glib, an Architect, to prepare plans for the refurbishment, making clear that he would deal with the structural defects identified in the report.
Mr. Glib visited the property, carried out a survey and took measurements but did not suggest that Ms. Prim should instruct an engineer.
Mr. Glib provided plans for the conversion of the property into a three-bedroom one; Ms. Prim accepted the plans, instructed a local builder which completed his work in April 2003.
Ms. Prim put the property on the market in 2007 at an asking price of £275,000, but the potential buyers withdrew their offers because of an adverse survey. At that point, Ms. Prim commissioned a survey of the property by a structural engineer which said “The building is in reasonable condition works carried out for its conversion to a dwelling has left some structural elements and in particular the suspended timber floors and the roof structure in a below standard condition. General maintenance and standard of finishes are very good.” He suggested consideration be given to a complete roof replacement.
Ms. Prim reported this to Mr. Glib, whose response was that any structural problems were not his fault; so, Ms Prim sued him for professional negligence claiming damages for breach of contract and tortious negligence.
The judge concluded that Mr. Glid (i) had failed to recommend the appointment of a structural engineer (ii) he had failed to appraise the condition of the property (iii) had failed to make or recommend investigations for upgrading its fabric, and (iv) had failed to take account of its structure in his design proposals.
According to the Judge, Mr. Glib should have paid more attention to the structural makeup of the building and should have consulted, or have advised Ms Prim to consult, a structural engineer to comment on its soundness and its roof.
In fact, according to the Law, where there is a contractual relationship, the professional may owe concurrent duties in contract and in tort. A concurrent duty in contract and tort exists where a claimant can build a tortious claim on either the: (i) Defendant's undertaking based in contract; (ii) Defendant's negligence in performing the contract in a way that caused harm to the claimant's property or commercial interests.
As a rule, professionals are taken to have assumed responsibility towards their clients and so owe both a duty of care in tort and contractual obligations.
However: (i) In contract, the cause of action is completed as soon as the contract is breached; (ii) in tort, no cause of action accrues until all elements of duty, breach and damage are present.
The contract between a professional and his client governs the basis of professional liability and is the source of the professional duties owed to the client.
The contract with the client may be in writing. Where the contract is not in writing, a professional should always take the precaution of writing to his client soon after the initial meeting, setting out the details of the contract as clearly as possible. This will help define the scope of duty and give the client the opportunity to clarify his instructions (if need be), thereby avoiding any confusion. It will also be evidence of the terms of the contract.
If they are not intending to give advice on a topic arising during the retainer, they should advise the client of this and keep a record.
Finally, in contracts for services where the professional is acting in the course of a business, it will be implied that the service will be carried out with reasonable care and skill (section 13, Supply of Goods and Services Act 1982 (SGSA 1982).
This means that the professional undertakes to possess and to exercise reasonable skill in the art he professes and the client is entitled to rely on the professional to exercise the highest degree of care and skill that a competent professional would exercise in work of that kind. It is possible for the contract to exclude or limit this implied duty, subject to the Unfair Contract Terms Act 1977.
