Discover the fundamentals of “Duty of Care” Vs. ” Fitness for purpose” in construction contracts

In the construction industry, the principles of “Duty of Care” and “Fitness for Purpose” represent two distinct standards of responsibility, each with its implications for professionals like designers and contractors.

Duty of Care

Definition and Legal Basis:

The duty of care refers to the obligation of a professional, such as a designer, to act with reasonable skill and care. This duty in North America, specifically Canada, is derived from the provincial Sales of Goods Act, and in UK is derived from the Supply of Goods and Services Act 1982. The Act mandates that the supplier of a service must provide it with reasonable skill, care and quality.

Under common law, the duty of care and negligence could be covered without an existing contract between the involved parties under the “Tort Law.” Although a case can combine negligence and contract, and this is called “concurrent liability in tort and contract.”

The test to establish the duty of care can be done by asking the following question :

1- Does one party owe another a duty of care?

2- Has this party breached his duty of care by his/her conduct?

3- Does this breach cause injuries or damages?

Or “The Bolam Test” can be used. The Bolam test was related to a medical case and then widely adopted to measure negligence by laying this principle: “A professional is not negligent if he performs his work to the standard of a reasonably competent professional in his field​​”.

Nature of Obligation:

The duty of care focuses on the process rather than the outcome. It does not necessarily require the achievement of a specific result as long as the requisite level of care is exercised. For instance, a consultant may avoid liability if they can demonstrate adherence to usual practice and professional standards at the time the design was executed​​.

Contractual Implications:

Typically, contracts in the construction industry combine statutory and common law duties into clauses requiring consultants to use a level of reasonable skill and care expected of an experienced professional in their field​​.

Fitness for Purpose

Definition and Legal Basis:

Fitness for purpose implies a higher duty, essentially an absolute obligation to achieve a specified result. This duty originates from the Sale of Goods Act , which implies terms on any seller in business that the goods supplied will be of satisfactory quality and fit their intended purpose when known to the seller​​.

Nature of Obligation:

Under this obligation, the level of skill and care used in the design or construction process is irrelevant. A contractor is responsible for ensuring that the completed works are fit for their intended purpose, regardless of the effort or resources expended​​.

Legal and Contractual Complexities:

The distinction between these responsibilities is contentious, partly because most professional indemnity policies cover negligence but not fitness-for-purpose claims. This leaves designers uninsured against contractual claims for breaches of fitness for purpose obligations​​. In desig and build contracts, a fitness-for-purpose obligation might be implied, especially where a non-professional undertakes a professional activity​​. Furthermore, international construction contracts often include explicit fitness-for-purpose obligations​​.

International Perspective:

Different countries have specific laws related to fitness for purpose. For example, Spain and the UAE have ‘decennial liability’ laws, which provide a ten-year guarantee on the structural integrity of buildings and civil works. This is seen as an implied fitness-for-purpose obligation that cannot be contracted out​​.