It is not difficult to envisage circumstances in which the Contractor might wish to

postpone the issue of a Taking-Over Certificate. For example, if the Contractor

believes that a defect existed in the work which would disrupt the Employer's use
and occupation of the works, the Contractor may well regard the liquidated
damages as a welcome ceiling to his liability. After substantial completion, the
Employer would be entitled to unlimited general damages to the full extent of his
loss. In a project which had already experienced considerable delay, for
example, the limit of liquidated damages might have been reached in which case
any additional delay prior to substantial completion would involve the Contractor
in no further damages. The question therefore arises as to whether the
Contractor is able to prevent the issue of a Taking-Over Certificat.

Under sub-clause 48.1, the machinery is triggered by a notice from the

Contractor. Under sub-clause 48.2, the matter is not beyond argument: there is
the reference to the procedure in sub-clause 48.1 but it would be hard to
construe the Contractor's request as a condition precedent. Under sub-clause
48.3, the Contractor is not involved and apparently the Engineer may act upon
his own initiative. This however does not apply to the whole of the works. The
Contractor has an additional control in relation to the whole of the works in
projects where the Contractor was obliged to provide part of the design. Under
clause 7.2 (Permanent works designed by Contractor), the provision of operation
and maintenance manuals is expressed as a condition precedent.

It is submitted that a Contractor wishing to take advantage of the liquidated

damages provision as a limitation of his liability is in some difficulty: the Engineer
might well consider it consistent with his duty of impartiality to grant substantial
completion of the great majority of the works that was complete regardless of the
Contractor's wishes. If the Contractor endeavoured to delay substantial
completion by stopping or slowing down the works, the Employer would have a
number of remedies including clause 46.1 (Rate of progress) and clause 63.1
(Default of Contractor).

48.4 Reinstatement has presumably to be distinguished from repair and

maintenance, particularly in circumstances where the Employer has moved onto
and is making use of the surface concerned. On road projects, the wearing
course is sometimes left off when the Employer first takes occupation so that,
shortly before the works are complete as a whole, the entire project can be
brought up to the same standard with the wearing course being laid for the whole
project. Although it is not clear, the natural meaning of the sub-clause is that the
requirement for reinstatement is to be judged as at the date of the Taking-Over
Certificate.

48.5 Part II provides an optional clause for the situation where the Tests on
Completion cannot be carried out prior to taking-over. It introduces a deemed
taking over on the date established by the Engineer's taking-over certificate as
the date on which the Tests on Completion would have been completed.
Compared with the normal taking-over certificate, which states the date on which

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in the Engineer's opinion the Works were substantially complete, this formula
seems even more likely to give rise to dispute. For example, if the test on
completion is carried out during the Defects Liability Period and the work fails the
test, is the taking over certificate open to challenge on the grounds that the test
would not have been "completed" until the works had been remedied and had
passed the test? There is also an unnecessary proviso which could simply say
that the Works should otherwise be substantially complete. The phrase
"...substantially in accordance with the contract" might merely mean that such
works as have been performed are not defective.

The tests are to be carried out in the Defects Liability Period. It may have been
sensible to give the Employer the option to dispense with that, particularly as the
Contractor can claim additional costs for carrying the tests out later. This
proposed sub-clause is ambiguous as to whether the Employer is being granted
an option to dispense with the requirement that the tests are carried out prior to
the taking over certificate. This could be important as, for example, an Employer
whose actual losses were greater than the liquidated damages provided for delay
to the works could increase his recovery by taking over the works as soon as
possible. This sub-clause is, it is submitted, ill thought-out and parties would be
unwise to use it without substantial amendments.

CLAUSE 49 : Defects Liability Period

This clause defines the Defects Liability Period as an agreed period, usually six
or twelve months running from the date or dates of the Taking-Over
Certificate(s).

The Contractor is obliged to complete any outstanding work and remedy any
defects during or shortly after this period.

Unless any remedial work undertaken by the Contractor was due to a cause
which was not the Contractor's responsibility, he receives no extra payment for
works executed during this period. If the Contractor remedies defects not of his
making, he is paid as if the work was a variation.

If the Contractor fails to carry out the remedial works within a reasonable time,
the Employer can take on alternative contractors to execute the works and
charge the Contractor the cost of remedying the Contractor's defects.

In the 4th Edition, the "Period of Maintenance" has become the Defects Liability
Period. This change in name appears to have occurred to avoid any suggestion
that the Contractor is obliged to carry out maintenance as distinct from remedial
works after substantial completion. Clause 49 has retained the structure and the
broad principles of the 3rd Edition but the vocabulary has changed extensively.
The reference to design in item (b) of sub-clause 49.3 is the most material
addition.

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49.1 There is a school of thought that if you have a clause such as clause 1.1
entitled "Definitions", then all definitions should be contained there. That view is
reinforced by the fact that the Defects Liability Period is referred to in some
thirteen clauses throughout the contract.

"...the expression "the Works" shall be construed accordingly". It is far from clear
what effect these words are intended to have or indeed have. The definition of
Works at clause 1.1(f)(i) includes the Permanent Works. It is also qualified by the
phrase in the opening sentence of clause 1.1 "except where the context
otherwise requires". The draftsman is no doubt addressing here the conflict
arising at first sight from the definition of the Defects Liability Period as starting
on "the date of completion of the Works".

The Defects Liability Period most frequently seen in the Appendix to civil
engineering contracts is one year.

49.2 There is no provision for the outstanding works to be listed or otherwise

identified. In practice, however, this may not cause particular difficulty. The
statement of intent in relation to the state of the works at the end of the Defects
Liability Period is of little apparent relevance to the obligation to complete
outstanding work as soon as practicable after the date in the Taking-Over
Certificate consistent with the undertaking given under clause 48.1 (Taking-Over
Certificate).

Sub-clause (b) contains no time limit upon the Contractor for executing the
remedial works save by implication from the statement of intent. Nevertheless,
failure to carry out works instructed within a reasonable time has the
consequence that the Employer may employ others under sub-clause 49.4
below.

It is a question of construction whether the terms "amendment, reconstruction"

are governed by the words "other faults" or whether amendments or
reconstructions which do not derive from defective design, materials or
wokmanship and amount to variations may be instructed by the Engineer during
the Defects Liability Period. The right to order variations under clause 51.1
(Variations) is not expressly limited in time and therefore the Contractor may
have no right to object to variations being ordered during the Defects Liability
Period. The obligation upon the Contractor to carry out variations may only end
upon the granting of the Defects Liability Certificate under clause 62.1. This
might come as a considerable surprise to a Contractor who demobilises in the
usual way after the Taking-Over Certificate has been issued. For further
discussion on whether the Engineer may issue variation instructions after
substantial completion, see the commentary under clause 13.1 (Work to be in
accordance with the contract).

It is obviously in the Employer's interests to have a right to take advantage of the

presence and knowledge of the Contractor to remedy faults arising through

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