Employer responsible for imprecise project specifications

An employer contracted with a building contractor for the conversion of a property which involved the installation of new dormers. The project specifications had been prepared by the employer in co-operation with a family member who was a retired engineer. It was agreed between the parties that the General Conditions for the provision of works and supplies within building and engineering (AB 92) were to apply. According to section 2.2 of the General Conditions, the employer's project specifications are to be unambiguous and presented so as to make clear the extent and nature of the services. It follows from section 10.1 that the contractor is to perform the work "in accordance with the provisions of the contract, with due professional care and skill or in accordance with any instructions given by the employer".

As the conversion work proceeded, a disagreement arose between the employer and the contractor as to whether the dormers were built with the proper dimensions. The problem was that not all dimensions were indicated directly in the project drawings. Also, the parties disagreed as to whether they had agreed on a specific file format for project drawings. In that format, the drawings and the dimensions could be read precisely.

The contractor offered to replace the dormers at the expense of the employer. The employer refused the offer and demanded replacement of the dormers as part of a defects rectification process. As the parties failed to agree, the employer terminated the construction contract for breach.

The contractor sued the employer for wrongful termination of the contract. The contractor maintained that the dormers were essentially built-in accordance with the project specifications and that consequently they were not defective. The contractor was also of the opinion that the employer had to bear the risk that the project specifications later proved to be imprecise, which did not come to the attention of the contractor until the disagreement arose.

The employer denied that the project specifications were unclear and submitted that the contractor should merely have inquired into the part of the project specifications which gave rise to uncertainty as to the dimensions.

The District Court had one opinion while the High Court had another

The District Court held that the parties had assumed that the file format mentioned was to be used. Consequently, the District Court attached weight to the statements of the expert that the missing dimensions could be found by using that file format. As the project specifications were sufficiently precise, the deviations in the dormers constituted a material defect. The District Court therefore ruled against the contractor who appealed against the judgment to the High Court.

The High Court reached a different outcome. In the High Court judgment, importance was attached to the statements of the expert that the project specifications were not sufficiently instructive and lacked important indications of dimensions. The High Court was not satisfied that the file format mentioned had been agreed between the parties. Therefore, it was not the responsibility of the contractor to see the ambiguities resulting from the employer sending drawings in this format. The risk of unclear points lay with the employer, and the deviations from the project specifications could consequently not be deemed to be a defect. As there was then no defect, the employer had not been entitled to terminate the construction contract for breach. The employer therefore had to bear the costs of replacing the dormers and the contractor had to pay damages for termination for breach.

IUNO's opinion

The drawings constituted a substantial part of the contractual basis between the parties to the building project. This decision establishes that it is the employer who is responsible for the specification of the building project. It is therefore important to have an eye for the details of the project specifications. IUNO recommends a careful review of the drawings to ensure that there is no doubt as to its interpretation and that all important details are clear. If a party wishes to use a specific file format for the project specifications, it should appear from the contract. In this case it may have played a role that the employer was advised by a building consultant in the design of the project specifications.

[High Court judgment of 17 December 2012, case no. B-3759-11]