It is readily accepted that products, goods, components and materials have to be reasonably fit for their purpose. That is, after all, what statute provides (Sale of Goods Act 1979 and The Supply of Goods and Services Act 1982).
But does this also extend to something as big as a construction project? In IBA v EMI Lord Scarman said that he did not want to equate a D&B contractor’s design obligation with that of an architect. He said that, unless your contract states otherwise:
[a person] who contracts to design an article for a purpose made known to him undertakes that the design is reasonably fit for the purpose.
The courts said they ‘could see no reason why’ a contractor who contracts to design supply and erect a mast (and by analogy other projects) would not be ‘under an obligation to ensure it is reasonably fit for the purpose for which he knows it is intended to be used.’
No guarantee
Requiring a project or product to be reasonably fit for a specific purpose is not the same as guaranteeing a specific performance. In Greaves v Baynham Meikle (1975) the court disagreed that an implied warranty for fitness for purpose…
would mean that every professional man would be warranting the successful outcome of his endeavours. Nothing of the sort…The suggestion that by reason of this finding every professional man or every consultant engineer by implication of law would be guaranteeing a satisfactory result is unfounded.
In the same case, Lord Denning said:
The law does not usually imply a warranty that [a professional] will achieve the desired result, but only a term that he will use reasonable care and skill. The surgeon does not warrant that he will cure the patient. Nor does the solicitor warrant that he will win the case…But when a dentist agrees to make a set of false teeth for a patient, there is an implied warranty that they will fit his gums.
In both IBA v EMI and Greaves the provider was held liable for failing to design works which could be used for a very specific purpose – but this actually came from express terms of the contract.
What should you do?
Consider what performance standards are necessary for the project to be a success and make sure the contract reflects those accurately and consistently – don’t wait for the law to tell you what you promised!
Cases: Independent Broadcasting Authority v EMI Electronics and BICC Construction (1980) 14 BLR 1; Greaves & Co (Contractors) Ltd v Baynham Meikle and Partners [1975] 3 All ER 99, citing Samuels v Davis [1943] KB 526
