Fitness for purpose in construction contracts
Fitness for purpose in construction contracts

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • Fitness for purpose in construction contracts
  • Where does the fitness for purpose obligation come from?
  • Who is under a fitness for purpose obligation?
  • Why should a contractor avoid accepting a fitness for purpose obligation?
  • What do the standard forms say?
  • Contractors—recognising fitness for purpose
  • Express exclusion of fitness for purpose
  • Other standards of care

A contractor or consultants’ standard of care in relation to design is a common source of disagreement between the parties to a construction project. In most cases the contractor or consultant will be trying to avoid accepting a 'fitness for purpose' obligation in relation to the design—either express or implied.

This Practice Note examines what the so-called 'fitness for purpose' obligation is, who is subject to it and who isn't, where it comes from and why contractors and consultants are keen to avoid accepting it. It also includes example clauses and considers whether a contractor should accept them.

The amount of design that a contractor or consultant may carry out under their contract or appointment will vary but, regardless of the extent of design undertaken, the principles dictating the standard of care in respect of that design will be the same.

Where does the fitness for purpose obligation come from?

The fitness for purpose obligation derives from legislation regarding product liability and the standards that are required to be met where goods, materials and/or services are being supplied.

Under sections 4(4) and 4(5) of the Supply of Goods and Services Act 1982 (SGSA 1982), an implied term is imposed on the supplier of goods that, where the purchaser makes known to the supplier any particular purpose for which the goods are being supplied, the goods will be reasonably fit for that purpose. See section 9 of the Consumer Rights Act 2015 in relation to contracts with consumers for the supply of goods—the remainder of this Practice Note assumes that the contractor/consultant is contracting with another business entity, rather than an individual consumer.SGSA