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Clarity is King

With the increasing reliance on amendments to standard form contracts, one very recent case and two fairly recent cases illustrate the importance of ensuring that the contract documents between parties are clear and unambiguous.

 

In all three cases, there was a significant disagreement on the bargain that each party, subjectively, considered that they had reached. In all three cases, and despite pre-contractual negotiations, the parties had differing opinions on how risk was to be allocated.

 

 

In the very recent case of John Sisk and Son Ltd v Capital & Centric (Rose) Ltd [2025][1] (“Sisk”), the contractor, Sisk sought declaratory relief by way of Part 8 proceedings that, as a matter of contractual interpretation, it was not responsible for the suitability of the existing structure for the proposed works.

 

The JCT Design and Build contract in question was amended, and Capital & Centric’s clauses 2.42.1 to 2.42.3 stated comprehensively that Sisk took the risk of the suitability of the existing structures, and that no surveys provided by Capital & Centric could be relied upon by Sisk as a warranty as to the condition of the site.

 

Sisk, on the other hand, had negotiated the inclusion of wording at clause 2.42.4 that the entirety of clause 2.42 was subject to the content of a provision in a Clarifications document. The Clarifications document said that the condition of the existing structure was an “Employer Risk”.

 

There was some confusion as to which document was the correct Clarifications document, however, this did not impact on the effect of the wording included by Sisk which made the conditions clauses subject to the Clarifications. The content of the Clarifications document was also not absolutely clear, and required further consideration by the court.

 

Following that consideration, HHJ Stephen Davies decided that the wording introduced by Sisk made it clear that Sisk’s obligations in relation to the condition of the existing structure were subject to the Clarifications document.

 

The wording of the Clarifications document, whilst not entirely clear, was clear enough for the TCC to decide that Sisk had ensured that the risk of the suitability of the existing structures remained with Capital & Centric.

 

Lendlease Construction (Europe) Ltd v Aecom Ltd (Rev1) [2023]

 

In an earlier case from 2023, Lendlease Construction (Europe) Ltd v Aecom Ltd (Rev1) [2023][2] (“Aecom”), one of the issues for the court to decide on was a point of contractual interpretation around the standard for design of the works.

 

The project was a new oncology hospital in Leeds, and Lendlease employed Aecom to provide M&E consultancy services. There were defects discovered in a Plant Room, and Lendlease took the position that Aecom’s design was deficient.

 

Lendlease’s case was based on the fact its consultancy agreement with Aecom provided that Aecom would not put Lendlease in breach of its design and build contract. That design and build contract contained obligations which, if Aecom were held to them, augmented Aecom’s design liability.

 

Lendlease argued that the principles established by the Supreme Court in the case of MT Hojgaard v E.ON Climate[3] applied, in which it was decided that if a contract contains competing obligations, a contractor will generally be obliged to comply with the more rigorous standard.

 

Aecom argued that a provision in its Consultancy Agreement was clear that its design responsibility was limited to reasonable skill and care. The relevant clause stated

 

“Notwithstanding any other clause in this Agreement or the Principal Agreement or term implied by statute or common law, the Consultant shall not be construed to owing [sic] any greater duty in relation to this Agreement than the use of necessary reasonable skill, care and diligence pursuant to this Clause 4.01.”

 

The TCC held that the inclusion of the above overriding provision restricted Aecom’s obligations to using reasonable skill and care, irrespective of other provisions in the Consultancy Agreement or Lendlease’s design and build contract which may have imposed a higher obligation.

 

BNP Paribas Depositary Services Ltd v Briggs & Forrester Engineering Services Ltd [2024]

 

In a case which straddled the Sisk case and the Aecom case, BNP Paribas Depositary Services Ltd & Anor v Briggs & Forrester Engineering Services Ltd [2024][4] (“BNP”), the amended JCT contract in that case included provisions with a similar intent as those contained in the Sisk case. Those provisions included that B&F took responsibility for the condition of the site along with the Employer’s Requirements and the Contractor’s Proposals, and also that B&F could not rely on any survey provided by or on behalf of BNP.

 

However, unlike the Sisk case, there was no provision which made those obligations subject to a Clarifications document, or anything of that nature.

 

When asbestos materials were discovered, Briggs & Forrester sought to rely on the inclusion of initial asbestos surveys as contract documents as limiting its liability for the extent of asbestos to be removed. Briggs & Forrester said that any asbestos discovered additional to that shown in the initial survey was a variation. There was also an issue with structural strengthening works, and whether Briggs & Forrester was responsible for those works.

 

HHJ Stephen Davies (the same judge as decided the Sisk case) decided that the responsibility for the asbestos works and the strengthening works sat with Briggs & Forrester, and so it had terminated illegitimately, as it had relied on BNP’s failure to provide a variation instruction for these works as justifying termination.

 

Summary

 

In all of the three above cases, the Parties came to court with differing interpretations of the contract that they had entered into.

 

The Briggs & Forrester case makes it clear that the Courts will enforce provisions which place responsibility on contractors for the content of Employer’s Requirements, and also provisions which state that contractors cannot rely on surveys provided as part of the tender process.

 

The inclusion of the reference to the Clarifications document in the Sisk case and the “notwithstanding” provision in the Aecom case show the importance for contractors of ensuring that the contract they enter into properly reflects what they have included for within their tender.

 



 
 
 
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