Chapter 8

Contractor’s Obligation

Introduction
This section represents the largest number of clauses in the ICE
Conditions of Contract (clause 8 to 35). There is no clauses have been
considered elsewhere. Clause 14 (Programme) has been dealt with in
Chapter 2 (Contract Documents), and clause 15 (Contractor’s
superintendence)

In HK, General Conditions of Contract (GCC) (clause 10 to 38).

There is no clauses have been considered elsewhere. Clause 16
(Programme) has been dealt with in Chapter 2 (Contract Documents),
and clause 17 (Contractor’s superintendence)

Contractor’s General Responsibilities (clause 8)

The contractor’s responsibilities under the contract are to:

 Construct and complete the works

 Provide everything necessary, i.e.
Labour
Materials
Contrcator’s equipment
Temporary works
Transport on and off the site

The permanent works are defined in clause 1(n) of the conditions of

contract:

Permanent works means the permanent works to be constructed and

completed in accordance with the contract.
They represent the finished works or structures for which the project
was commissioned. The definition of temporary works is in clause
1(m):

Temporary works means all temporary works of every kind required in

or about the construction and completion of the works.

In so far as the conditions of contract are concerned, the “works” are

defined as the combination of the temporary and permanent works
(clause 1(o)).

Design responsibility

The contractor is not generally responsible for the permanent works

in terms of their:

 Design
 Specification

However, there is provision in the conditions of contract to cover

permanent works designed by the contractor (clause 7(6). This is
regarded as contractor designed construction and, in some
circumstances, will form a part of the contract. The contractor is
required to exercise all reasonable skill, care and diligence in
designing any part of the permanent works. The contractor is also
not responsible for sufficiency of the temporary works that have been
designed by the engineer. However, the responsibility for the majority
of the temporary works will be the contractor’s. the provision of
temporary works will be greatly influenced by the methods that the
contractor chooses to carry out and complete the works.

Contractor responsible for safety of site operations

The contractor must take full responsibility for both the temporary
or permanent works during construction. This includes responsibility
for all site operations and methods of construction in respect of their:
 Adequency
 Stability
 Safety

Contract Agreement

The contractor may be required to complete a Contract Agreement.

This will be at the expense of the employer, using the form in the
Conditions of Contract.

Performance Security

It has become common today for employers to require performance

bonds for construction contracts. This is to ensure that the contractor
completes the works. The bond provides for a third party, often a
bank, to provide the additional funds that may be required to
complete a project in the event of the contractor becoming insolvent
or for some other reason not completing the works. Where a bond is
to be provided, this will be stated in the contract documents, usually
in the specification. Under the Conditions of Contract the employer
can request such a security for up to 10% of the tender total. This
will be required within 28 days of the awarding of a contract to a
contractor. The security for the bond must be provided in the
Appendix to the Conditions of Contract. It is usual for the fees
associated with a bond to be paid by the contractor, unless the
contract provides otherwise. Since the employer is likely to benefit
where a bond is brought into use, the employer is deemed to be a
party to the security.

In practice, a contractor may be prohibited from even tendering for a

project where it is known either that it will not be possible to arrange
a bond, or that it will be prohibitive in terms of its fee. For example, a
civil engineering contractor who has traditionally carried out repairs
to urban roads and sewers, up to one million pound, may be unlikely
to obtain a bond (at the appropriate price) for culverting a small
river at a cost of ten million pound. The provision of a bond is not
solely restricted at past performance but also the general financial
and a management capability of a contractor.

Provision and interpretation of information (clause 11)

The employer will be deemed to have made available to the

contractor, before the submission of a tender all information on:

 Nature of ground, subsoil and hydrological conditions

 Pipes and cables in, on or over the ground

This information will have been obtained by the employer through a

site investigation prior to the design of the works. It is the
contractor’s responsibility to correctly interpret this for the purpose
of constructing the works. It must also be used where the contractor
is responsible for designing any part of the works.

Inspection of site

Before submitting a tender, the contractor will also have inspected

and examined the site and its surroundings and used the information
described above. The contractor will be deemed to have determined
the:

 Form and nature of the site including the ground and subsoil
 Extent and nature of the project
 Work and materials necessary for constructing and completing
the works
 Communication and access to the site
 Accommodation that may be required
 Possible risks and contingencies

Basic and sufficiency of tender

The contractor will therefore formulate the tender on the basis of:

 Information supplied to them from the employer

 Inspection of the site
 Examination of the contract documents
 Correctness and sufficiency of the rates and process in the bills of
quantities which will cover all of the contractor’s obligations

Adverse Physical Conditions and Artificial Obstructions (clause 12)

During the execution of the works the contractor may encounter

physical conditions or artificial obstructions. If these could not have
been reasonably foreseen by an experienced contractor, a written
notice of such should be given to the engineer. These conditions
exclude weather conditions and conditions due to bad weather.
The use of this clause on major civil engineering works is common in
the support of claims for additional expense. This is due in part
because of the nature of civil engineering works and the fact that
much of the work is at or below the ground level. More sophisticated
means of determining the full extent of the ground conditions are
constantly being brought in to use. However, it is often not until the
contractor has commenced work that the full extent of the site is
properly understood.

Intention to claim

At the time of writing to the engineer the contractor should state

whether a contractual claim is to be made. The claim may be in the
form of an additional payment (clause 52) or an extension of time
(clause 44). Where it is not possible to provide this information about
the adverse physical condition at the time of writing, the engineer
should be informed about this possibility as soon as possible.

Measures being taken

The contractor should also provide details to the engineer of any

anticipated effects of the adverse physical condition. This will include
the measures that the contractor has taken, is taking or will tak to
deal with the problem. The contractor should also inform the
engineer of the:
 Estimated costs involved
 Extent of anticipated delay
 Effects upon the works

Action by engineer

Following the receipt of the notification relating to possible adverse

physical conditions, the engineer should consider whether to

 Ask the contractor to investigate and report upon possible

alternative measures that might be used together with their costs
and timing
 Give written consent to the measures notified by the contractor
 Give the contractor written instructions on bow the adverse
physical condition is to be dealt with
 Suspend the works under clause 40
 Issue a variation under clause 51

Conditions reasonably foreseeable

The engineer may decide that the physical conditions or artificial

obstructions could have been reasonably foreseen by an experienced
contractor. In this case the engineer will inform the contractor as
soon as possible in writing of this decision. Where the contractor’s
notification under clause 12 has resulted in the engineer issuing a
variation under clause 52, then the costs of this variation will be
added to the contract price.

Delay and extra cost

Where the engineer considers that such conditions or obstructions

could not have been foreseen by an experienced contractor then an
additional payment, including a reasonable amount for profit and/or
an extension of time should be granted to the contractor. The
engineer will notify the contractor in writing with a copy given to the
employer.
Works to be to satisfaction of the engineer (clause 13)

The contractor is to construct and complete the works in strict

accordance with the contract and to the satisfaction of the engineer.
Only if the work is illegal or physically impossible to carry out, will
the contractor have any redress for non-compliance. The contractor
must comply with all the engineer’s instructions connected with the
project. The contractor must take instructions only from the engineer
or, subject to certain limitations (clause 2), the engineer’s
representative. The engineer has wide powers, but if the contractor
feels that these are being exceeded, the matter should be brought to
the attention of the engineer (clause2 (7)).

Mode and manner of construction

The materials equipment and labour provided by the contractor

(clause 8) and the mode, manner and speed of construction of the
works are of a kind and conducted in a manner acceptable to the
engineer.

Delay and extra cost

The engineer’s instructions can sometimes cause delay or disruption

to the contractor’s arrangements or method to be used for
construction purposes. Where the contractor incurs costs beyond
those reasonably foreseen by an experienced contractor at the time of
tender, the engineer will take these into account when determining an
extension of time under clause 44. the contractor will be paid for such
delays or disruptions in accordance with clauses 52 (variations) and
60 (certificates and payments). Profit will be added to the costs of
additional temporary or permanent work. If the delays or
disruptions are partially due to the contractor, the amount of delay
and costs involved will be adjusted accordingly. Where such
instructions require a variation, the same shall be assumed to have
been given pursuant to clause 51.

Removal of contractor’s employees (clause 16)

The contractor must employ only those who are careful, skilled and
experienced in their several trades and callings.
The engineer can object to any person employed on the works and
require the contractor to remove them from site. This must not be
done unreasonably or to the specific annoyance of the contractor. The
contractor should therefore have been previously warned of this
impending situation, and given an opportunity to take appropriate
corrective action. It is, thankfully, an uncommon occurrence.
However, it may arise in circumstances where persistently bad
workmanship arises or where a member of the contractor’s staff has
consistently failed to carry out the engineer’s instructions as
requested. If, in the opinion of the engineer, a person is guilty of:

 Misconduct
 Incompetence
 Negligence
 Failing in the performance of duties
 Failing to conform with particular provisions regarding safety
 Persisting in conduct which is prejudicial to safety or health

Then such a person must not be re-employed upon the works without
the permission of the engineer. For example, where an employee is
dismissed by the contractor for one of the above reasons, that same
person would not be able to work again on that project, in the
services of a subcontractor.

Setting out (clause 17)

The engineer is responsible for providing the contractor with all the
information necessary for the contractor to set out the works. This
information should comprise properly dimensioned drawings
showing line, level and location. Delays in the presentation of the
information from the engineer could result in an extension of time.
The setting out of the works is the responsibility of the contractor.
This includes the provision of all necessary instruments, appliances
(e.g. profile boards) and labour. The setting out involves the
correctness of the:
 Position
 Levels
 Dimensions
 alignment

Safety and security (clause 19)

The contractor should, throughout the progress of the works, have

full regard for the safety of all people who are entitled to be upon the
site. The contractor should keep the site, which is under the control of
the contractor, and works which are not completed or occupied by
the employer in an orderly stated appropriate to the avoidance of
danger. The contractor should also provide and maintain:

 lights
 guards
 fencing
 warning signs
 watching

These are to be available when and where necessary or required by

the engineer or engineer’s representative or competent statutory
authority, such as the Health and Safety Executive. They are to be
provided for the protection of the works and for the safety and
convenience of the public and others.

Employer’s responsibilities

The employer may employ other contractors or use a form of direct

labour for certain aspects of the work (clause 31). In these cases the
contractor has little jurisdiction over such firms. It is the employer’s
responsibility in these circumstances to ensure that the same regard
for safety and the avoidance of danger is adopted by such firms and
workmen.
Care of the works (clause 20)

The contractor is to take full responsibility for the care of the works
and the materials, plant and equipment that are to be incorporated in
the works from the contract commencement date until the date of the
issue of the certificate of substantial completion for the whole of the
works. At this point the responsibility for the care for the works
passes to the employer. If the engineer issues a certificate of
substantial completion for any section of the permanent works, the
contractor will cease to be responsible for the care of that section of
the works. The contractor is responsible for the care of any
outstanding work during the defects correction period or until such
work is completed.

Excepted risks

There are a number of excepted risks for which the contractor is not
liable for loss and damage. These include:

 use or occupation by the employer and those who are directly

responsible to the employer
 any fault, defect, error or omission in the design of the works,
other than in contractor-designed construction
 riot, war, invasion, act of foreign enemies or hostilities
 civil war, rebellion, revolution, insurrection or military or
usurped power
 ionizing radiations or contamination by radioactivity from any
nuclear fuel or from nuclear waste from the combustion of
nuclear fuel, radioactive toxic explosive or other hazardous
properties of any nuclear assembly or nuclear component
 pressure waves caused by aircraft or other aerial devices
traveling at sonic or supersonic speeds
Rectification of loss or damage

The contractor is responsible for making good any loss or damage,

other than excepted risks described above, to the works or a section
of the works and to materials, plant or equipment to be incorporated
in the works. The contractor is also responsible for making good any
loss or damage that might occur during the compliance with the
obligations under clauses 49 and 50 (outstanding work and defects).
The contractor is not liable for any loss or damage arising as a result
of one of the excepted risks, listed above. Thee engineer may require
the contractor to rectify such loss or damage, but this will be at the
expense of the employer.
Where loss or damage is a combination of both excepted risks and
the contractor’s own negligence, then the costs of rectification will be
apportioned between the contractor and the employer.

Insurance of the works (clause 21)

The contractor must insure the works in the joint names of the
contractor and employer. This will include the materials, plant and
equipment that are to be incorporated within the works. The extent
of the insurance cover is to be the full replacement costs, plus an
additional 10 per cent to allow for incidental costs. These incidental
costs might include demolition and removal of debris, professional
fees and extra costs incidental to the insurance work. The principle of
the insurance clause is that the employer should be left in the same
financial position as would have been the case prior to an insurance
claim arising.

Extent of cover

The insurance required for the contract must cover any loss or
damage other than that arising from the excepted risks that have
been defined in clause 20 (2). The period of cover runs from the
works commencement date until the issue of the certificate of
substantial completion.
The insurance must also extend to cover any loss or damage arising
during the defects correction period from a cause occurring prior to
the issue of the certificate of substantial completion. The insurance
must also cover the work carried out by the contractor in competing
any outstanding work and defects under clause 49 and 50.
Any amounts that are not insured or cannot be recovered from the
insurers, e.g. excess amounts, are to be borne by either the contractor
or the employer in accordance with their respective responsibilities
under clause 20.

Interference with traffic and adjoining properties (clause 29)

The contractor should carry out the works so as not to interfere

unnecessarily or improperly with the public. This includes access to
public and private roads, footpaths or property. The contractor must
indemnify the employer in respect of all possible claims arising from
such matters.

Noise disturbance and pollution

All of the works are to be carried out without unreasonable noise,

disturbance or other pollution.

Indemnity by contractor

Noise, disturbance or other pollution is often unavoidable in

construction works. The contractor must indemnify the employer
against any liability for damage and claims that might arise in this
context.

Indemnity by employer

Similarly, the employer is to indemnify the contractor in respect of

damage and claims that might occur.
Avoidance of damage to highways (clause 30)

The contraction is to use every reasonable means to protect highways

and bridges on route to the site. The contractor must not subject
these to extraordinary traffic within the meaning of the Highways
Act 1980. The contractor must ensure that subcontractors also
conform to this requirement. The contractor should be careful in
selecting routes and in using appropriate vehicles to move the
contractor’s plant and equipment, materials and prefabricated
components. Care should be exercised at all times and no
unnecessary damage or injury should be made to highways and
bridges.

Transport of contractor’s equipment

The contractor is responsible for the strengthening of bridges that

may be required during the transportation of contractor’s equipment
and temporary works. In some cases it may be necessary to alter or
improve a highway for these purposes. The cost of this is to be borne
by the contractor, who must also pay any other charges that may be
involved. The contractor must also indemnify the employer in this
respect and negotiate and pay all claims should these arise.

Transport of materials

The contractor should notify the engineer as soon as any damage

occurs to bridges or highways due to the transportation of materials
or manufactured articles. Normally the hauliers of such items are
required under an Act of Parliament or statutory instrument to have
indemnified the highway authority against the possibility of such
damage occurring.
In other cases the employer will negotiate and settle any sums that
may be due. Where, for example, the work results from a variation,
the contractor should be repaid the costs incurred under this clause.

Clearance of site on completion (clause 33)

Upon completion of the works, the contractor must clear away and
remove from the site:

 contractor’s equipment
 surplus material
 rubbish
 temporary works

the whole of the site and permanent works must be left in a clean and
workmanlike condition to the satisfaction of the engineer.