Battle of the clauses: ‘Skill and care’ vs ‘fit for purpose’

It is common for construction contracts to contain a clause requiring the contractor to perform the contract works with reasonable skill and care, in addition to a clause requiring the works to be fit for their purpose.

These clauses normally complement each one another, such that if reasonable care and skill is used it is likely that the works will be fit for their purpose. However, if these clauses are inconsistent, which clause should take precedence? This question was analysed in MT Højgaard A/s v E.ON Climate And Renewables & Ors [2014] EWHC 1088 (TCC).

MT Højgaard designed and installed off-shore wind turbines in the United Kingdom. The contract provided that MT Højgaard would use reasonable care and skill and that the turbine foundations would have a life span of at least 20 years. The grouting used to secure the turbines failed and the cost of remedial works was €26.25m.

 

The foundations were constructed in accordance with international standard J101 (the industry standard). However, J101 contained an error that caused the grouting to fail. Despite MT Højgaard complying with the industry standards, the Court found that when the contract was read as a whole the express obligation for the foundations to have a 20year life span took precedence. MT Højgaard was held liable for the remedial cost.

In making this finding, Justice Edwards-Stewart relied on a passage from the construction law text, Hudson’s Building and Engineering Contracts, which states that an express obligation to construct works capable of performing to specified criteria expressly overrides the obligation to comply with the plans and specifications. This approach was justified on the basis that a contractor would have allowed for this additional obligation in their contract price.

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