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Approvals & Satisfaction

© Daniel Atkinson 2000 07 December 2000

Use of Clauses General Principles The Standard Types of Clauses

Defects Suppliers Drawings & Design Interim Certificates
Final Certificates Standard Forms FIDIC 1998 ICE 7 Edition
ECC 2 Edition IChemE Red Book MF/1(Rev 3) JCT 1998
CECA 1998 DOM/1

Use of Approval/Satisfaction Clauses

Much of construction involves the use of professional skill and judgment in deciding whether work has
achieved a particular standard or in valuing the quantity of properly constructed work. This difficulty is
resolved in many standard forms by adopting the opinion, satisfaction or approval of the Employer or the
Architect/Engineer as the appropriate standard. Such statements of opinion, satisfaction or approval will not
usually be final nor binding on the parties without express and clear provisions in the contract, and are
usually simply intended to be administrative.

In some standard forms a decision on a dispute may become final and binding by the operation of a time bar
if steps are not taken to resolve the dispute by legal proceedings. Similarly some standard forms make the
Final Certificate conclusive in legal proceedings as evidence of the acceptability of the quality and standard
of the work and to entitlements to extension of time under the contract, subject to objection and
commencement of legal proceedings within a specified period. The question remains then to what extent
opinions, approvals and statements of satisfaction are binding on the parties, and the standard to be
adopted.
General Principles
The House of Lords held in Gilbert Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd (1974) that in
interpreting a contract the starting point was the presumption that neither party intended to abandon any
remedies for breach of contract arising by operation of law. Clear express words must be used in order to
rebut this presumption. In deciding the effect of the satisfaction of the Employer or the Engineer, adopting the
principle in Gilbert Ash the presumption is that the contractor is not to be deprived of his right to payment for
work properly carried out.

In Minster Trust Ltd v Traps Tractors Ltd (1954) Devlin J held there was nothing to prevent a party from
requiring that work shall be done to his own satisfaction, even if through an agent. What has to be
ascertained in each case is whether the agent is or is not intended to function independently of the principal.

It is suggested that if the contract does not contain an objective standard to be applied, it may be that the
parties intended that the standard of satisfaction is that of an objective Architect/Engineer in which case the
decision has to be reasonable. If instead the intention was that the Architect/Engineer should adopt his own
standard, then the requirement is likely to be that the decision must be made in good faith.

Reasonableness may not be the appropriate standard where the contract expressly states that the
Employer’s own particular view is intended to be satisfied, as for instance on matters of decoration or finish in
a residential property. In such a case any decision will need to be made in good faith and not dishonestly.
The Standard of Satisfaction/Approval
If the work satisfies the Architect/Engineer, but is below the standard specified in the Contract, then whether
or not the contractor is liable for defective work will depend upon the interpretation of the contract as a whole.
This depends on whether the obligation to satisfy the Architect/Engineer is interpreted as an overriding
obligation or simply cumulative or complementary to the specified standards.
The modern approach is to be found in the decision in National Coal Board -v- Wm Neill & Son (St Helens)
Ltd (1984) 1 ALL ER 555 in which Piers Ashworth QC recognised the difficulty in modern construction of the
Architect/Engineer checking matters which in practice would be left to the Contractor. The Architect/Engineer
cannot check all work himself, such as the quality of welding, since he would in effect have to repeat all the
work himself. Inevitably the Employer has to rely on the skill and expertise of its specialist contractors. It was
held that in the particular contract before the Court, there were two independent obligations. The Contractor
therefore would be in breach of contract if they failed to execute the work in accordance with the contract
even if the Engineer expressed his satisfaction and even if the defect was obvious to the Engineer. The
satisfaction of the Engineer was therefore a superadded protection for the benefit of the Employer in addition
to the contractor's primary obligation to complete the work according to specification.

The importance of establishing the nature of the obligation to satisfy the Architect/Engineer and how the
nature of the obligation may differ depending upon the particular clause under examination, is demonstrated
by the House of Lords decision in City of Westminster -v- Jarvis & Sons Ltd (1970) 7 BLR 64. The
Subcontract required nominated sub-contract piling work to be carried out in a certain period and to the
satisfaction of the Architect and Contractor. The Subcontract allowed the Contractor extension of time for
delay by the sub-contractor. The sub-contractor completed the work and left the site by the due date. There
were latent defects in the piles which showed up later in construction, and the sub-contractor returned to
remedy this breach of contract. Despite the breach of contract, it was held that the piling work had been
completed on time. The criteria for establishing whether at the appointed time performance had been
rendered was whether or not the Architect and the Contractor were satisfied at that time. They were, so there
was no delay which could give the contractor an entitlement to an extension of time.
Types of Approval/Satisfaction Clauses
Modern contracts not only require the Architect/Engineer to approve construction work carried out, but also to
approve drawings prepared by the Contractor, possible suppliers of materials and possible subcontractors. In
addition, the assessment of the amounts due in Interim Payment Certificates requires the Architect/Engineer
to decide whether work has been satisfactorily carried out, and this implied approval will trigger payments to
subcontractors. In addition, the issue of the Final Certificate under the Contract will normally demonstrate
acceptance of the Works. In each of these cases the legal effect of approval depends upon the particular
clause and the terms of the contract.
Defects
It is unusual for contracts for construction only, to state that work is to be carried to the satisfaction of the
Employer as opposed to an independent third party such as an Architect/Engineer. In Subcontract forms it is
usual to find that work is to be to the satisfaction not only of the Architect/Engineer under the Main Contract,
but also of the contractor. In design & build contracts an Architect/Engineer is not usually appointed and the
contractor’s responsibility is specified by reference to the satisfaction of the Employer, or not at all instead
relying only on a fitness for purpose obligation.

If material samples of the standard specified are required to be submitted for approval before work has been
carried out, then compliance with the approved sample may override any other description in the contract,
subject to express terms to the contrary.
Suppliers
In some cases the specification of the material may be in the form of a named supplier. In that case, whether
or not the Architect/Engineer is required to approve a supplier requested by the contractor, depends upon the
terms of the Contract.

In Leedsford Ltd -v- The Lord Mayor, Aldermen and Citizens of the City of Bradford (1956) 24 BLR 45,
Bradford appointed Leedsford as contractor to build a new infants' school. The Bill of Quantities included an
item for artificial stone with the named supplier "Empire Stone Company Limited" but included the term "or
other approved firm". Leedsford was required to submit to the Architect for approval, a list of material prices.
The list submitted included £500 based on quotations from alternate suppliers HK White (Precast Concrete
Works) Ltd and Spencer Parkinson and Sons Ltd. The cost of stone from Empire Stone was £1,250. The
Architect refused to approve the alternative supplier stating that the stone had to be obtained from Empire
Stone. The contractor argued that the words "or other approved firm" had been inserted for its advantage or
benefit. It was argued that Leedsford was entitled to have the benefit of the lesser price for the supply of
stone of the proper quality. In other words that Leedsford had a right to submit the name of a firm for
approval and that the approval should not be unreasonably withheld. It was held in the Court of Appeal that
the words "or other approved firm" did not give the contractor an option to submit any firm of their choice for
the Architect's approval. Leedsford would fulfil its contract if it provided Empire Stone, whether the Bradford
Corporation wanted it or not; and the Corporation Architect could say that he would approve of no other
stone except the Empire Stone. There was an absolute obligation on Leedsford to supply Empire Stone
unless the Architect gave his approval to some other stone. The Architect was not bound to give any reasons
for withholding approval of any other firm. The most that was required of the Architect was that he should act
in good faith and no allegation against his good faith had been made.

In J. Crosby & Sons Ltd -v- Portland Urban District Council (1967) 5BLR121 Crosby contracted with the
Council under the ICE 4th Edition to lay a 15inch trunk water main. Clause 94 of the Specification provided
that pipes were to be manufactured by either Stanton’s or Staveley’s. The Engineer requested Crosby to use
Staveley rather than Stanton pipes, since a provisional order had been placed with Staveley and because
most of the existing pipes in the Council’s area were Staveley. Crosby had based its prices on information
provided by Stanton and would have used Stanton for the works. The use of Staveley pipes did not delay
work, but because of larger joints required additional excavation and bitumen moulding material. The Council
argued that no payment was due, because on a true construction of the contract, the Council through the
Engineer had an option and the contract price covered the cost of whichever make of pipe the Engineer
specified. It was held, rejecting this argument, that Clause 94 of the Specification entitled the supplier of the
pipe to choose the make of pipe. Crosby was the supplier, so that the Engineer’s request constituted a
variation and Crosby was entitled to be paid for it.
Drawings and Design
Most standard forms provide that approval does not relieve the contractor from his responsibilities. If an
Architect/Engineer is involved in checking or approving drawings and designs, by doing so he may incur
liability to the Employer for any defective design. The extent of any such liability depends upon the facts and
the terms of the contract between Employer and Architect/Engineer.

There is a distinction between issuing a drawing for comment and issuing a drawing for approval. In J
Sainsbury plc -v- Broadway Malyan (1999)61ConLR31 BM agreed to pay Sainsbury a sum as a
compromise on an action for breach of contract and negligence in the performance of its services as
Architect in designing or supervising the construction of a fire compartment wall at Sainsbury’s superstore in
Chichester. In third party proceedings BM claimed that consulting structural engineering practice Ernest
Green & Partners was liable to make a contribution to the damages paid, under the Civil Liability
(Contribution) Act 1978.

BM’s case was that EGP had an equal responsibility for the design because it failed to observe or draw
attention to an obvious defect within its own sphere of competence i.e. unprotected steelwork. BM set out the
details of the dry construction wall on a drawing which it sent to EGP, which showed a patent metal framed
panel system which was described as 2 hour fire resisting. It did not in fact provide 2 hour fire resistance to
the lattice girder unlike the wall. Under Building Regulations the girder became a structural member which
needed fire protection. EGP made no comment on the drawing and did not advise BM of the need for fire
protection.

The principal issue was whether EGP failed in its duties to Sainsbury in not advising that the girder needed
fire protection equivalent to that of the compartment wall. The drawing was not sent for approval and BM did
not pursue EGP for an answer on the issue of fire protection. It was held that there was a clear distinction
between a request for comment and a request for approval. It was held that it was clear from the evidence
that a structural engineer would not ordinarily know of the properties of the patent system without consulting
the manufacturer. It was held therefore that the transmission of the drawing to EGP coupled with the request
for comment did not place EGP under any duty to Sainsbury to consider BM’s design for the fire protection of
the girder. BM was therefore not entitled to claim contribution from EGP.
If instead EGP were liable to Sainsbury then it could only be on the basis that it ought to have alerted BM to
the need to look again at its design since the drawing did not provide the girder with the 2 hour resistence
assumed for it. It was held that a failure by a professional person to provide comment, without more, can
rarely, if ever, be treated as a tacit approval, even if the subject-matter was within the person’s competence.
In any event BM had later opportunities to pick up its patent mistakes. It was held that a professional person
is under a continuing duty as regards design. That duty does not require a professional to keep previous
work under constant review, but it does come into play when a professional has occasion to look again at its
design. It was held that if EGP was negligent, then it was essentially a failure to warn, since it was required
by BM to comment, not to redesign. The appropriate apportionment would be 12.5% to EGP and 87.5% to
BM.

In London Underground Ltd -v- Kenchington Ford plc (1998) QBD 63 Con LR 1 Kenchington Ford (KF)
were consulting engineers appointed by LUL for the civil engineering and architectural design of the Canning
Town station as part of the Jubilee Line extension. LUL claimed for negligence in respect of professional
engineering services provided by KF. Part of the claim related to the design of the diaphragm walls which
surrounded the site. The design of these walls was not the direct responsibility of KF, but of Cementation-
Bachy, subcontractor to the works contractor Mowlem. LUL claimed that KF had failed as the technical
contractor to realise that Cementation had made an error in computation, and in consequence the diaphragm
walls were designed as too deep. The contract between Mowlem and LUL dealt with the Engineer’s role and
particularly clauses 14.2.3 and 7.1. Clause 14.2.3 required Mowlem to provide the Engineer with copies of
calculations and drawings for the diaphragm walls for checking 6 weeks before commencement of works on
site. Clause 7.1 required the Contractor to submit drawings and other documents to the Engineer for his
approval, where required. KF’s agreement with LUL comprised written conditions of engagement and a
written Client Brief. Clause 5.4.4 of the Client Brief required KF to provide LUL during the course of
construction, services including the correction of any errors, ambiguities or omissions arising and answering
requests for clarification on design matters from Mowlem. In providing clarification as to whether or not loads
were additive or not, KF had given a wholly inaccurate reply. It was held that a careful engineer should have
checked and had he done so, should have picked up the error. It was held that KF was in breach of the
duties placed on it by Clause 5.4.4 of the Client Brief.
Interim Payment Certificates as Approval
Many standard forms of contract provide a certification system for payments. The amount stated in the
Certificate for payment by the Employer normally involve a degree of assessment by the Certifier based on
his personal opinion. The parties have agreed that he will be the particular expert to carry out this function.

Two types of certificate need to be differentiated, namely interim and final certificates. Most standard forms of
contract state an entitlement on the part of the contractor to interim payment. These payments assist in the
contractor`s cashflow, but the actual determination of the contractor`s entitlement is not made until the final
certificate. The interim payments are therefore sums paid on-account of whatever the contractor might
eventually be entitled to recover from the Employer. Most standard forms make the issue of a certificate a
condition precedent to the contractor`s right to payment.

It is a matter of fact whether payment for work carried out is a statement of acceptance or approval. Most
contract provisions for interim certification and payment are based on cumulative valuation of work done, and
are only for payments on account. They are not binding nor conclusive of acceptance of the work.

In Fairclough Building -v- Rhuddlan Borough Council (1985) 30 BLR 26 the employment of the
nominated subcontractor Gunite was determined by the main contractor. The Architect issued a renomination
requiring the work to be completed by Mulcaster. Gunite had been paid for work which was subsequently
condemned. In a subsequent certificate the amount certified for the work carried out by Gunite was reduced.
By that time Gunite was insolvent. It was held that the Employer was entitled to be credited with the reduced
value of work carried out by Gunite. The loss therefore fell upon the main contractor.
Final Certificates as Approval
Some standard forms of contract, notably JCT Forms, IChemE Forms and MF/1, include clauses which make
conclusive the Final Certificate in relation to the fulfilment of specified obligations under the Contract. The
Courts have upheld such clauses and given effect precisely to the terms of the clause, sometimes to the
surprise of the construction industry. In all cases it is a matter of construction of the particular contract.

In Crestar Ltd -v- Michael John Carr (1987) CA 37BLR118 Crestar was appointed under the JCT Minor
Works form to carry out works on Mr Carr’s house. On 1st October 1985 the Architect signed what was
evidently intended to be a Final Certificate. Disputes arose and particularly whether the Final Certificate was
conclusive of the fact that the work had been carried out to the satisfaction of the Employer, and binding on
Employer and builder alike. It was held that it is a matter of construction of the contract in question, whether
the Final Certificate is to be conclusive and whether or not it can be reopened by the arbitrator. In this case it
was held that the contract contained no express provision that the Final Certificate was to be conclusive
evidence as to the sufficiency of the works and materials or in any other respect. The Employer was
therefore not deprived of the right to raise any defence that might be open to him in any proceedings or by
way of arbitration.

In Colbart Ltd -v- H Kumar (1992) 59 BLR 89, Judge Thayne Forbes QC had to consider the effect of a
Final Certificate given by an Architect under Clause 1.1 of the terms of the JCT Intermediate Form of
Contract, 1984 Edition. Judge Forbes held that although the quality of materials and standards of
workmanship had not been stipulated as having to be to the Architect's satisfaction, they were inherent
matters for the opinion of the Architect and that therefore the certificate applied to them. In other words, the
Architect's Certificate was conclusive. Any attempt by the Purchaser to subsequently commence an action
outside the expiry date of 21 days after the issue of the Final Certificate for faulty workmanship or materials
where approval of quality is inherently a matter for the Architect would fail.

In Crown Estate Commissioners -v- John Mowlem & Co. Ltd (1994) 70 BLR 1, C.A. the issue was the
interpretation of Clause 30.9.1.1 of the JCT 80 form before Amendment 15. The clause provided that the
Final Certificate was conclusive evidence that where the quality of materials or the standard of workmanship
are to be to the reasonable satisfaction of the Architect the same are to such satisfaction. It was recognised
that there are three different criteria for the standards and quality of work. First the criteria could be stipulated
in the contract documents, for example British Standard Specifications. Second the standard and quality may
not be stated in the contract documents but by terms implied. Third the standards and quality may be
expressed to be to the Architect’s satisfaction. It was therefore necessary to decide whether the conclusive
effect of Clause 30.9.1.1 applied only to those standards expressed to be to the Architect’s satisfaction or
whether it extended to all works on which the Architect was required to form an opinion.

It was held that the conclusive effect of clause 30.9.1.1 applied not only to such materials and workmanship
as are expressly reserved by the contract to the opinion of the Architect but includes all approvals of
materials and workmanship which is inherently something for the opinion of the Architect. It was a matter of
fact and degree in each case whether the quality of materials or the standard of workmanship is inherently a
matter for the Architect.

Amendment 15 to the JCT 80 Form, incorporated in JCT 1998, makes the Final Certificate conclusive only of
the Architects satisfaction, where it so expressly provides, but not conclusive that the works have been
carried out in accordance with the contract.

In London Borough of Barking and Dagenham -v- Terrapin Construction Ltd (2000) CA the issue was
the interpretation of Clause 30.8.1.1 of JCT 1981 Conditions - with Contractor’s Design. Clause 30.8.1.1
provides that the Employer’s Final Account and Employer’s Final Statement are conclusive evidence that
where it is stated in the Employer’s Requirements that the quality of materials or the standard of
workmanship are to be to the reasonable satisfaction of the Employer the same are to such satisfaction. It
was argued that claims in relation to either failure to meet any statutory requirements or in relation to failure
in design were subject to a defence of conclusive evidence. It was also argued that there were no Employer’s
Requirements.

It was held that in this case the Employer’s overriding requirement was that the execution, completion and
maintenance of the work would be to the satisfaction of the Employer, and this is what Clause 30.8.1 related
to. The term Employer’s Requirements meant simply that which the Employer wants done. The Contract as a
whole contains the Employer’s Requirements.

It was held that the absence of a designated Architect was not a relevant distinction and that the decision in
Crown Estate was to be followed. Clause 30.8.1 of the 1981 Form was to be construed in the same way as
Clause 30.9.1 of the JCT 80 Form as to the conclusiveness of the Final Account and Final Settlement. It was
also held however that Clause 30.8.1 does not apply to breaches of the obligation of the Contractor to
complete the design of the Works.

It was argued that Clause 30.8.1 did not apply to latent defects, that is defects which were not discoverable
on reasonable inspection by the Employer, because if not discoverable then the Employer could not have
been satisfied with that aspect of materials or workmanship. This argument was not accepted. It was held
that Clause 30.8.1 makes no distinction between patent and latent defects. If the Employer wished to exclude
latent defects from the conclusiveness effected by Clause 30.8.1.1 this could easily have been done.

In respect of statutory obligations Clause 6 required the Contractor to comply with, and give all notices
required by any Act of Parliament etc. The Court acknowledged that there was a clear distinction between a
contractual requirement to comply with regulations, bylaws, Act of Parliament etc. and the obligation imposed
by law to build in particular way or to a specified standard. It was held that the obligation to carry out the
works in all respects to the satisfaction of the Employer included the contractual obligation under Clause 6.
Once the Final Account and Final Statement are agreed as conclusive evidence, then the contractual
obligation under Clause 6 is discharged, although this could not affect the Contractor’s statutory liability.

In Matthew Hall Ortech Limited -v- Tarmac Roadstone Limited (1997) the interpretation of Clause 38.5 of
IChemE Red Book 1981 was considered. Clause 38.5 provides that the issue of the Final Certificate is
conclusive evidence that the Contractor has completed the Works and made good all defects therein in all
respects in accordance with his obligations under the contract. It was held that the issue of the Final
Certificate meant that the contractor had a complete defence to a claim for breach of contract.

Most standard forms of contract identify the Final Certificate as conclusive evidence of the completion of a
specified obligation. This is not the same as discharging the Contractor from liability to the Employer for
breach of the obligation. In practice the Final Certificate will prevent the Employer from establishing the
Contractor’s liability, even if it is subsequently found that the Final Certificate should not have been issued. In
that case the Employer may seek to recover from the Architect. The issue which then arises is whether the
Architect has a right of contribution and indemnity from the contractor pursuant to the Civil Liability
(Contribution) Act 1978, and whether the conclusive effect of the Final Certificate is a complete defence.

In Oxford University Fixed Assets Limited -v- Architects Design Partnership (1999) TCC the University
had entered into a contract with Wimpey Construction Limited for the construction of building to house the
Department of Pharmacology and the Anatomical Neurapharmocology Unit. The form of contract was JCT
1980 without Amendment 15. The Architect was ADP.

The University alleged that partition walls of blockwork were not protected from weather and kept dry, so that
when they dried out widespread cracking was caused. ADP issued a list of defects after Practical
Completion, to be made good in the Defects Liability Period, which included cracking in the plaster to the
blockwork. Remedial works were carried out and the Final Certificate issued under Clause 30.9 of the
building contract.

The University sought damages from ADP for the cost of rectifying the problem of cracking walls. It alleged
that ADP had negligently issued the Final Certificate. ADP denied liability and issued a third party notice
against Wimpey claiming that Wimpey was liable to the University due to breaches of the building contract. It
was assumed in the proceedings that the defects in the blockwork constituted damage which occurred prior
to the issue of the Final Certificate.

In order to decide the issue, His Honour Judge Humphry Lloyd QC examined the nature and effect of the
Final Certificate. He recognised that the JCT Form envisaged that within a specific period from practical
completion of the works, finality would be achieved both as regards the final account and also the
contractor’s liability for the extent and quality of the work, material and services which it undertook to provide.
It was held that the effect of the Final Certificate was not that it left Wimpey with no liability in law, but that it
operates only as an evidential bar which would preclude an employer from being able to prove the facts
necessary to establish such liability.

Once the Final Certificate has been issued, no liability could be established by the University against
Wimpey, since a claim by the University in respect of the same damage for which ADP sought contribution
from Wimpey (the defects in the blockwork) would have been defeated. In any ordinary and natural meaning
of the word, liability could not have been established. The issue of the Final Certificate is thus tantamount to
a decision discharging the liability of the contractor. It would be rank injustice for the Civil Liability
(Contribution) Act 1978 to permit the person who by its own negligence to the common client procured that
liability could not be established by that client, to then claim contribution as if that act had not occurred and
as if the client could have done so. It was held that although the Final Certificate did not constitute a
cessation of liability for the purposes of the Act, liability could not be established so that the Final Certificate
afforded a defence to Wimpey to the action for contribution.
Standard Forms
The modern trend is to rely on Quality Assurance Systems for checking of drawings and designs, and to
adopt objective testing standards instead of the subjective opinion of a third party. Nonetheless the
Architect/Engineer’s approval is still adopted in some standard forms, particularly in the building industry. The
device of the conclusive effect of the Final Certificate is used to achieve finality particularly in processing and
mechanical/electrical works, but less so in building works.
FIDIC 1998
The FIDIC Forms do not expressly state that the Works should be carried out to the Employer’s (Silver Form)
or Engineer’s (Red and Yellow Forms) satisfaction. As expected there is a distinct difference in approach
between the Red Form and the design and construct forms of Yellow and Silver. The latter rely on the main
obligation that the Works when completed shall be fit for their purpose since the Works are designed by the
Contractor. The Red Form in which the Employer is responsible for design, except where specified
otherwise, requires the Contractor to follow instructions and the contract procedures imply that consents and
approvals will be given as the Works proceed. Only the Performance Certificate is stated to constitute
acceptance of the Works. As expected in a modern contract, reliance is placed on the Contractor’s quality
assurance system. The Contractor is not relieved of his obligations by any approvals or consents.

Clause 4.1(Red Form) requires the Contractor to execute the Works in accordance with the Contract and the
Engineer’s instructions. Clause 4.1 of the Yellow and Silver Forms do not refer to the Engineer’s instructions.
Clause 7.2 (Red Form) requires the Contractor to submit specified samples of Materials and relevant
information to the Engineer for consent prior to using the Materials in or for the Works. Clause 7.2 of the
Yellow and Silver Forms do not refer to consent but instead refers to review and there is no express
requirement for review before use. Clause 7.6 (all Forms) provides that notwithstanding any previous test or
certificate instructions may be given for the removal of Materials or re-execution of any work not in
accordance with the Contract.

Clause 4.9 (all Forms) requires the Contractor to institute a quality assurance system, and allows the
Engineer (Red and Yellow Forms) or the Employer (Silver Form) to audit any aspect of the system. When
any document of a technical nature is issued to the Engineer, evidence of prior approval is required to be on
the document itself. Compliance with the quality assurance system does not relieve the Contractor of his
obligations under the Contract.

Clause 1.3 (all Forms) provides that approvals, certificates, consents and determinations shall not be
unreasonably withheld or delayed. Clause 3.1(c) (Red and Yellow Forms) provides that except as stated in
the Conditions any approval, check, certificate, consent, test etc or similar act of the Engineer including
absence of disapproval shall not relieve the Contractor from any responsibility he has under the Contract.
This provision is not repeated in the Silver book, but Clause 3.3(a) provides that unless otherwise stated in
the delegated person’s communication relating to approval, check, certificate, consent, etc shall not relieve
the Contractor from any responsibility he has under the Contract. Clause 3.2(a) of the Red and Yellow Forms
and 3.3(b) of the Silver Form provides that any failure of any assistant with delegated authority to disapprove
any work shall not constitute approval and shall not prejudice the right to reject the work.

Clause 14.6 (all Forms) provides that any Payment Certificate shall not be deemed to indicate the Engineer’s
acceptance, approval, consent or satisfaction. Clause 14.12 (all Forms) requires the Contractor to submit a
written discharge when submitting the Final Statement, confirming that the Final statement represents full
and final settlement of all monies due to the Contractor. Clause 14.14 provides that the Employer is not liable
to the Contractor for any matter in connection with the Contract, except to the extent that the Contractor shall
have included an amount expressly in the Final Statement and in the Statement at Completion, but does not
limit the Employer’s liability under his indemnification obligations.

Clause 11.9 (all Forms) states that only the Performance Certificate shall be deemed to constitute
acceptance of the Works. Clause 11.10 (all Forms) provides that after issue of the Performance Certificate,
each party remains liable for the fulfilment of any obligations unperformed at that time.
ICE 7th Edition
The ICE 7th Edition assumes that the main part of design will be the responsibility of the Employer. The role
of the Engineer in giving instructions and giving approval and consents is prominent. The Contractor is not
relieved of his obligations by any approvals or consents. The issue of the Defects Correction Certificate is not
intended to affect the obligations or rights of the parties.

Clause 13(1) requires the Contractor to construct and complete the Works in strict accordance with the
Contract to the satisfaction of the Engineer and to comply with and adhere strictly to the Engineer's
instructions.

Clause 2(1)(d) provides that the giving of any consent or approval by or on behalf of the Engineer shall not in
any way relieve the Contractor of any of his obligations under the Contract or of his duty to ensure the
correctness or accuracy of the matter or thing which is the subject of the consent or approval.

Clauses 7(6) and (7) recognise that the contractor may be responsible for some design and requires the
Engineer to accept the design so as to coordinate all design of the Permanent Works. Clause 7(6) provides
that where the Contractor is responsible for design of part of the Permanent Works he shall submit to the
Engineer for acceptance documents including drawings, calculations and manuals. Clause 7(7) provides that
such acceptance shall not relieve the Contractor of any of his responsibilities under the Contract.

Clauses 14(1)(a) and (4) requires the Contractor to submit programmes at various times and on the
happening of various events for the Engineer’s acceptance. Clauses 14(1)(b) and (6) require the Contractor
to submit information on the Contractor’s method of construction for the Engineer’s consent. Clause 14(9)
provides that the Engineer’s acceptance of the programmes and consent to the proposed methods of
construction do not relieve the Contractor of any of his duties or responsibilities under the Contract.

Clause 36(1) provides that all materials and workmanship shall be of the respective kinds described in the
Contract and in accordance with the Engineer's instructions. Clause 39(1) allows the Engineer to give
instructions in relation to materials, workmanship or design which in the opinion of the Engineer are not in
accordance with the Contract. Clause 39(3) provides that failure of the Engineer to disapprove any work or
materials does not prejudice the power of the Engineer subsequently to take action under Clause 39.

Clause 61(2) provides that the issue of the Defects Correction Certificate is not to be taken as relieving either
the Contractor or the Employer from any liability the one towards the other arising out of or in any way
connected with the performance of their respective obligations under the Contract.
ECC 2nd Edition
The ECC 2nd Edition makes the Project Manager central to the administration of the Contract. He is required
to accept designs before they are implemented and subcontractors before they are appointed. The
programmes are required to be accepted. The only limit on the power of the Project Manager is that
withholding acceptance for a reason not stated in the contract is a compensation event.

Clause 29.1 requires the Contractor to obey an instruction which is in accordance with the contract and is
given to him by the Project Manager or the Supervisor.
Clause 14.1 provides that the Project Manager's or the Supervisor's acceptance of a communication from the
Contractor or of his work does not change the Contractor's responsibility to Provide the Works or his liability
for his design. Clause 13.8 allows the Project Manager to withhold acceptance of a Contractor’s submission
for any reason. Clause 60.1(9) provides that withholding acceptance for a reason not stated in the contract is
a compensation event.

Clause 21.2 requires the Contractor to submit particulars of his design to the Project Manager for
acceptance. The Contractor is not allowed to proceed with the relevant part until the Project manager
accepts the design. Clause 23.1 makes similar provisions in relation to the Contractor’s design of an item of
Equipment if instructed.

Clause 26.2 requires the Contractor to submit the name of each proposed Subcontractor to the Project
Manager for acceptance. The Contractor is not allowed to appoint a proposed Subcontractor until the Project
Manager has accepted him.

Clauses 31.1 and 32.2 require the Contractor to submit programmes to the Project Manager for acceptance.
IChemE Red Book
The IChemE Red Book requires the Contractor to carry out work to the satisfaction of the Project Manager as
well as in accordance with the Contract. The Form is a design and construct form and requires the Plant
when completed to be suitable for the purpose intended as defined in the Specification. Test are prominent in
the Form. For this reason the IChemE Red Book brings finality for liability for latent defects. The Final
Certificate is intended to be conclusive on the matter of latent defects.

Clauses 3.1 and 3.2 require the Contractor to execute the Works to the reasonable satisfaction of the Project
Manager as well as to execute the Works in accordance with the provisions of the Contract. It is suggested
that the two obligations are independent cumulative obligations. The Contractor is required to execute the
works in accordance with the Contract. The Engineer's satisfaction is a superadded protection for matters
related to quality of materials and standards workmanship.

Clause 2.4 provides that no approval or consent required to be obtained under the Contract shall be
unreasonably refused or delayed.

Clause 13.2 and 13.4 require the Contractor to and submit to the Project Manager for his approval various
programmes.

Clause 20 of the Red Book deals with approvals of Documentation. Documentation is defined in Clause 1 to
include technical documents such as drawings, documents, designs or records including those produced by
or contained within data processing systems. Clause 20.1 requires the Project Manager to either give
approval, disapproval or conditional approval within 14 days of submission by the Contractor of any
Document for approval. If the Project Manager fails to take any action within 14 days then the Document is
deemed to have been approved. The Contractor is required to notify the Project Manager accordingly.
Clause 20.2 provides that the Project Manager’s approval does not relieve the Contractor of his
responsibilities under the Contract for the accuracy or sufficiency of the Documents. Clause 20.3 requires the
Project Manager to give reasons for disapproving a Document. The valid grounds are limited to non-
compliance with the express provisions of the Contract, or being contrary to good engineering practice.

If Clause 37.8 forms part of the Contract, then acceptance of the Plant by the Purchaser does not affect the
obligations of the Contractor in relation to defects under Clause 36.

Clause 38(4) states that the issue of the Final Certificate shall be conclusive evidence for all purposes and in
any proceedings whatsoever between the Purchaser and Contractor that the Contractor has completed the
Works and made good all defects in all respects in accordance with his obligations under the Contract,
subject to fraudulent misrepresentation or fraudulent concealment. The parties have thereby limited the
period of liability for latent defects to the defects liability period.
MF/1(Rev 3)
The MF/1 Form is intended to be for supply of electrical, electronic or mechanical Plant. It would be
expected, and this is the case, that the Engineer’s approval is decisive and final in terms of design as shown
in the contractor’s documents submitted for approval, Clauses 15 and 16. Otherwise the Engineer’s approval
does not relieve the contractor from his obligations under the Contract. Similarly no certificates are final
approval except for the final certificate for payment under Clause 39.12.

Clause 2.4 requires the Contractor to proceed with the Contract in accordance with the decisions,
instructions and orders given by the Engineer in accordance with the Conditions. Clause 13.2 requires the
Works to be manufactured and executed in the manner set out in the Specification or, where not so set out,
to the reasonable satisfaction of the Engineer and all work on Site shall be carried out in accordance with
such reasonable directions as the Engineer may give. These provisions therefore make clear that in relation
to the manner of manufacture and execution the Engineer’s satisfaction is a fall back requirement if the
Specification is silent.

Clause 2.7 requires the Engineer when he is required to exercise his discretion by giving his decision,
opinion or consent or by expressing his satisfaction or approval to exercise such discretion fairly within the
terms of the Contract and having regard to all the circumstances.

Clause 3.2 provides that except where otherwise stated the Contractor shall not sub-contract any part of the
Works without the prior consent of the Engineer but not for contracts for minor details nor for purchases of
materials nor for any part of the Works of which the manufacturer or supplier is named in the Contract.

Clause 14.1 requires the Contractor to submit a programme to the Engineer for approval. Clause 14.3 states
that approval by the Engineer of the programme does not relieve the Contractor of his obligations under the
Contract.

Clauses 15.1, 15.5, 15.6 and 15.9 provide details of the information which is to be supplied by the
Contractor. Clause 15.1 provides that the Engineer is required to state his approval or disapproval of the
information submitted. If he fails to do so within the time given in the Contract or the Programme, or if no time
limit is specified within 30 days of receipt, then the information is deemed to have been approved. Clause
15.1 also requires approved drawings to be signed or otherwise identified by the Engineer.

Clause 15.3 states that approved drawings shall not be departed from except as provided in Clause 27 which
relates to variations. Clause 16.1 states that the Contractor shall be responsible for any errors, omissions or
discrepancies in the information he has submitted for approval to the Engineer unless they are due to
incorrect information supplied by the Purchaser or the Engineer, notwithstanding approval by the Engineer of
the information. This suggests therefore that any change to an approved drawing will be a variation unless it
arises from any said error, omission or discrepancy by the Contractor. It is suggested that approval provides
the information submitted with a contractual status similar to Contract drawings except for error, omissions or
discrepancies of the Contractor.

Clause 23.1 allows the Engineer at all reasonable times to inspect, examine and test materials and
workmanship and performances of all Plant. Clause 23.1 states that such inspection, examination or testing
does not release the Contractor from any obligation under the Contract.

Clause 29.4 requires the Contractor to rectify or complete outstanding work noted on the Taking-Over
Certificate to the reasonable satisfaction of the Engineer.

Clause 37.2 provides that no interim certificate of payment issued by the Engineer shall prejudice his right to
reject Plant which is not in accordance with the Contract. Clause 39.8 provides that no certificate of payment
other than a final certificate of payment shall be relied upon as conclusive evidence of any matter stated
therein, nor shall it affect or prejudice any right of the Purchaser or the Contractor against the other.

Clause 39.12 provides that the final certificate of payment is conclusive evidence that the Works are in
accordance with the Contract and that the Contractor has performed all his obligations under the Contract in
respect thereof. Clause 39.12 also states that payment of the amount certified in a final certificate of payment
is conclusive evidence that the Purchaser has performed all his obligations under the Contract in relation to
the Works. Clause 39.13 makes clear however that this does not affect the Contractor’s obligations in
relation to latent defects due to gross misconduct.
JCT 1998
The JCT Form is intended for use in building works and the Architect’s role is central. It is the nature of
building works that many matters are not easily defined by reference to an objective standard. The
Architect’s approval or satisfaction is therefore an important part of the management of building contracts.
The Final Certificate is intended to be conclusive of such satisfaction, but only if expressly stated in the
contract.

Clause 1.5 provides that notwithstanding any obligation of the Architect to the Employer, irrespective of
inspections, valuation in certificates or issue of the Certificate of Practical Completion or Certificate of
Completion of Making Good Defects, the Contractor is wholly responsible for carrying out and completing the
Works in accordance with the Conditions.

Clause 2.1 provides that to the extent that approval of the quality of materials or of the standards of
workmanship is a matter for the opinion of the Architect, such quality and standards shall be to the
reasonable satisfaction of the Architect.

Clause 8.1.1 and 8.1.2 requires all materials and goods and workmanship to be of the kind and standards
described in the Contracts Bills, provided that they shall be to the reasonable satisfaction of the Architect
where and to the extent required in accordance with Clause 2.1.

Clause 8.2.2 provides that in respect of such materials, goods or workmanship under Clause 2.1, the
Architect’s dissatisfaction is to be expressed within a reasonable time from the execution of the
unsatisfactory work.

Clause 4.1 requires the Contractor to comply with all instructions issued to him by the Architect, for a matter
for which he is expressly empowered by the Conditions to issue instructions.

Clause 8.1.4 prevents the Contractor substituting materials or goods described in the Contractor’s Statement
for Performance Specified Work without the Architect’s consent, which is not to be unreasonably withheld or
delayed. Clause 8.1.4 provides that such consent does not relieve the Contractor of any obligation under the
Contract.

Clause 8.4.4 refers to a Code of Practice for the opening up for inspection or test to establish to the
reasonable satisfaction of the Architect, the likelihood or extent of any further non-compliance. The Code of
Practice provides criteria for the Architect to consider.

Clause 17.4 provides that when the Architect issues a certificate stating his opinion that defects, shrinkages
and faults which appeared during the Defects Liability Period have been made good, then they are so
deemed for all the purposes of the Contract on the date named in the Certificate.

Clause 30.9.1.2 provides that the Final Certificate is conclusive evidence in any proceedings under or arising
out of or in connection with the Contract that where and to the extent that any of the particular qualities of
materials or goods or the standard of any workmanship was described expressly in Contract Drawings or
Bills as to be the approval of the Architect, the particular quality or standard was to the reasonable
satisfaction of the Architect. Clause 30.9.1 states that the Certificate is not conclusive evidence that such or
any other materials or goods or workmanship comply with the Contract. Under Clause 30.9.2 and 30.9.3 this
effect is limited if proceedings have been commence before or within 28 days of the Final Certificate. Clause
30.10 provides that save as provided in Clause 30.9, no certificate shall of itself be conclusive evidence that
any works, materials and goods are in accordance with the Contract.
CECA Blue Form 1998
Clause 2(1) provides that the Sub-Contractor shall execute, complete and maintain the Sub-Contract Works
in accordance with the Sub-Contract and to the reasonable satisfaction of the Contractor and the Engineer.

Clause 7(1) provides that subject to Clause 8 (Variations) the Subcontractor shall in relation to the Sub
 Contract Works comply with all instructions and decisions of the Engineer which are notified and confirmed in
writing to him by the Contractor. Clause 7(2) provides that the Contractor has the like powers in relation to
the Sub Contract Works to give instructions and decisions as the Engineer has in relation to the Main Works
under the Main Contract.
DOM/1
Clause 4.1.1 requires the Sub-Contractor to carry out and complete the Sub-Contract Works in compliance
with the Sub Contract Documents and in conformity with all reasonable directions and requirements of the
Contractor.

Clause 4.1.2 and 4.1.3 requires that all materials and goods and workmanship where and to the extent
approval of the quality standards or workmanship is a matter of opinion of the Architect, such quality,
standard and workmanship are to be to the reasonable satisfaction of the Architect.

Clause 4.3.2.3 refers to a Code of Practice for the opening up for inspection or test to establish to the
reasonable satisfaction of the Contractor, the likelihood or extent of any further non-compliance. The Code of
Practice provides criteria for the Contractor to consider.

Clause 21.10 deals with the effect of the Final Payment. Unless adjudication, arbitration or other legal
proceedings have been commenced before the Final Payment has been made, the Final Payment is
conclusive evidence that where and to the extent that qualities of expressly stated to be for the approval of
the Architect, the particular quality or standard was to the reasonable satisfaction of the Architect. The Final
Payment is not conclusive evidence that the materials or goods or workmanship comply with any other
requirements of the contract. The Final Payment is also conclusive evidence that effect has been given to the
payment and valuation terms of the Contract, and that extensions of time due have been given and that any
reimbursement of loss and expense is in final settlement of all claims which the Sub Contractor has or may
have. If adjudication, arbitration or other legal proceedings are commenced within 10 days of the Final
Payment, then the Final Payment has the above conclusive effect, except in respect of all matters to which
those proceedings relate.

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