2022-06-12（264）Engineering law and the ICE Contracts

Notes to Clause 20:

1. CONTRACTOR’S RESPONSIBILITY FOR THE WORKS. By cl. 20 and his duty to hand over completed works to the employer, the contractor is bound to make good at his own cost (irrespective of whether he is insured) any damage to the works before completion. This clause confirms the liability of the contractor to make good any such damage to the works (and “Works” now includes all temporary works by cl. 1 (1) (1)) from “any cause o whatsoever”, with the relief provided by this clause that the contractor is not liable in respect of the excepted risks defined in sub-cl. (3).

Until recently it seemed clear that the phrase just quoted included damage to the works due even to the negligence of the employer. The law has become less certain as a result of a recent decision. Nevertheless interpreting cls. 20 and 21 as a whole and taking into account that the specific excepted risk of faulty design, which will usually although not always be due to the negligence of the employer’s agent, implies that negligence of the employer and his agents is covered unless specifically excluded, it seems that the intention of the clauses will not be frustrated by the courts. The manifest intention is that the contractor is responsible for the overall insurance of the works for the benefit of both himself and the employer, and ultimately at the employer’s expense, save for the risks expressly excluded. But there is an element of uncertainty that cannot be tolerated in a clause as important as this, so that the words “and including any negligence or default of the Employer his servants or agents” should be added after the words “of this Clause” within the brackets at the opening of sub-cl. (2). Even that alteration does not produce absolute safety, because of the Unfair Contract Terms Act 1977, but for the reasons given on p. 433 it is suggested that these cls. 20 and 21 clearly pass the test of reasonableness applied by the Act.