Whether you’re a building contractor or a pastry-making equipment supplier, the fitness-for-purpose debate rages on – and it isn’t getting any easier
Mention “fitness for purpose” to any contractor and they will go purple with fury. Why should they guarantee the performance of a building when a consultant agrees only to exercise skill and care? How do they know what the future use of the building will be? How can they look into the future and foresee the next high alumina cement disaster? And what about insurance?
You cannot blame contractors for being enraged. From Ronan Point through to warehouse floors and transmission masts, the law reports are full of disasters that were not caused by a lack of skill and care and for which the contractor was only liable because it had assumed some sort of “fitness for purpose” responsibility, whether knowingly or not.
A relevant if tangential example is a recent case relating to the purchase of equipment to be used for the production of samosa pastry – Filobake Ltd vs Rondo Ltd (2005). It was a term of the contract that the equipment would “be able to produce samosas to the attached recipe”. The trial judge found that the sole obligation of the equipment supplier was to supply, as component parts of the factory production line, items that were of satisfactory quality and that were, individually and collectively, capable of enabling pastry containing the ingredients listed in the recipe to be extruded at a thickness of 0.5 mm and passed down the line at the speed of 15 mm per minute.
He rejected the argument that the pastry produced should be capable of being used as samosa pastry. However, the Court of Appeal overturned this, concluding that the provision quoted above amounted to an express warranty that the pastry extruded by the equipment should be capable of use as samosa pastry.
This case neatly illustrates the difference between a warranty in a building contract that “the works when completed shall be suitable for the purpose stated in the requirements” (to quote the alternative clause included in the guidance notes issued with the
JCT Major Project Form 2005) and the warranties implied under the Supply of Goods and Services Act 1982. The act states that, in the absence of anything to the contrary in the contract, and assuming reliance on the contractor, where the contractor is responsible for the selection of materials and goods, then they are responsible for delivering materials and goods “of satisfactory quality”. In other words, if they select a roof system, they must choose a product that will not leak; if a racking system, one that will not topple, and so on.
How can the contractor be expected to warrant matters that are more obviously within the skills of the client?
Plainly, most clients in the construction industry would be reluctant to agree to the exclusion of terms implied under statute. If parliament thinks it is entitled to this statutory protection, why should it specifically agree to exclude it? And most contractors will accept this, even if they are still anxious about this “suitability” warranty, which leaves them carrying liability in circumstances where, even exercising skill and care, they could not have anticipated what might happen – as in the cases of latent defects in bricks or high alumina cement.
But do employers really then need to go and demand express warranties in respect of the suitability of the whole of the building? It is arguable whether the law implies such terms, and in any case, how can the contractor be expected to warrant matters that are more obviously within the skills and knowledge of the client? A client building a supermarket knows those aspects that are vital to its functionality. They should stipulate in their requirements documents those special
features of a building that make it suitable for use as a supermarket. Even a one-off client of the building industry constructing an office building makes the decision whether or not to include a crèche or a gym or whatever.
It would be nice to think that this sort of approach might take some of the hot air out of the continued “fitness for purpose” debate and save a few burst blood vessels. But then again, maybe we all enjoy the confrontation too much to give it up …