'Absolute' and 'skill and care' obligations

We see more and more contracts where contractors give an assurance that complete works will meet a particular specification, believing that reasonable skill and care will achieve that specification.  But that is not always the case!

A recent case determined that a construction or an engineering contract can contain both absolute obligations and obligations to exercise reasonable skill and care.  These are not mutually exclusive and can exist side by side in your contract. 

In this case, the contractor agreed to carry out the design, fabrication and installation of the foundations for 60 wind turbine generators for an offshore wind farm.  The contract contained a number of obligations, one of which was that the foundations must have a minimum design life of 20 years.  In fact, the design failed within two to three years and the contractor was taken to court for the cost of the remedial works, estimated to be 26.25 million euros.  The court said that the contractor had warranted a design life of 20 years on the foundations.  The employer was entitled to rely upon that and therefore the contractor was in breach of his obligation. 

The court noted that it was common for construction and engineering contracts to refer to obligations to exercise reasonable skill and care, to work in a workmanlike manner and to achieve a particular result, the latter being an absolute obligation.  It gave this example: a building is designed and constructed robustly so that it lasts its design life and so meets the absolute obligation.  However, the workmanship is untidy, for example, the bricks although suitable are mismatched and create an eyesore.  An obligation to perform works in a workmanlike manner would not allow for such unsightly brickwork.

Engineering contracts often contain absolute obligations to deliver works to a specification.  This case should serve as a reminder to exercise care when agreeing contract terms and ensure that absolute obligations and obligations to exercise skill and care are clearly indentified as such.  Our team of lawyers would be happy to advise you on your contract and assist with your negotiations.

Claire Wiles
01245 453811
[email protected]