Fitness for Purpose or Skill and Care

How to Ensure a Building is, on Completion, Reasonably Fit for its Intended Purpose

Implied and Express Terms

In the UK, a requirement that a building be reasonably fit for its intended purpose may be an implied term of a design and build contract unless expressly excluded. For build only contracts, that is where the builder does not contribute to the design, fitness for purpose is not ordinarily a term of the building contract unless expressly included. In its place there is likely to be a requirement to carry out and complete the works in a proper and workmanlike manner and in compliance with the Contract Documents, etc. There is no guarantee that building in a proper and workmanlike manner will satisfy the employer's expectations.

Contracts may introduce fitness for purpose liabilities without using the term ‘fitness for purpose’ and a fitness for purpose liability may be created where, for example, a contractor undertakes to design, supply and install something which was not included in the original contract and where the contract does not exclude fitness for purpose. A term such as; 'on completion, the work shall comply in all respects with the requirements of the Employer as defined in the Contract', may impose no less a fitness for purpose liability than the FIDIC expression; “When completed, the Works shall be fit for the purposes for which the Works are intended as defined in the Contract.”

Fitness for purpose requirements may be imported by reference to specifications, standards, written authorities, etc. Take for example an NHBC draft proposal for a standard for waterproofing below ground structures, which, in relation to structural design, states that; "All elements (including foundations, walls and floors) forming a below ground structure requiring waterproofing shall be suitable for their intended purpose." This may be interpreted to impose a fitness for purpose liability on the structural designer. Without a careful reading of the whole of the documents this may not be noticed when entering the contract for structural design.

Benefits and Risks

The advantage to the employer of a fitness for purpose requirement is that, if work is defective, it is not necessary to prove negligence, i.e. a lack of due skill and care. The disadvantage is the risk that there will be no professional indemnity insurance, as much standard professional insurance for building designers will not cover a fitness for purpose liability. As the uninsured may not be able to satisfy a claim for breach of contract, some care is needed to ensure those who are invited to undertake work on a fitness for purpose liability are aware of this and have informed their insurers.

Whether or not the finished building is fit for purpose may be subject to differing interpretations. Some contracts restrict fitness for purpose to that which is stated in the contract documents. For example some FIDIC contracts state; “When completed, the Works shall be fit for the purposes for which the Works are intended as defined in the Contract.”