How far can an architect/engineer accept minor deviation at site?

Several case laws had indicated that employer may recover the cost of rectification if the work is defective. But if rectification is not a reasonable solution compare to the minimal benefit, rectification cost would not be awarded.
But it is important to note that the deviations must be aesthetically and technically acceptable. In other words, the employer can still benefit from the works without compromising structural and safety factors.

One of the controversial English cases was Ruxley -v- Forsyth which had shed some lights to such circumstances:

“The 1995 House of Lords decision in the case of Ruxley -v- Forsyth was widely reported since it added to the general understanding of how damages should be assessed for a contractor's failure to meet specified standards in a construction contract.

Forsyth had specified that a swimming pool being constructed for him by Ruxley should have a maximum depth of water of 7'6". Unfortunately the completed pool only had a maximum depth of 6'9" and the depth below the diving board was only 6'. Forsyth sued for the cost of a new pool.

The trial judge concluded that the pool constructed was perfectly safe to dive into and that there was no evidence that the shortfall in depth had decreased its value. The only practical method of achieving a pool of the required depth would be to demolish the existing pool and reconstruct a new one at a cost of some £21,000. There was no evidence that Forsyth actually intended to build a new pool at such a cost.

The judge held that that cost would be wholly disproportionate to the disadvantage of retaining the pool as it had been built. Accordingly he concluded that, despite breach of contract on the part of Ruxley in building a pool which did not meet the required specification, the damages to be awarded was simply a figure to reflect a loss of amenity. This was assessed in the amount of £2,500.

Forsyth appealed the matter to the Court of Appeal and was successful. The Court of Appeal held that Forsyth had suffered a loss as he had a swimming pool less suited to diving than the one he had contracted for. The question to answer was what money would place Forsyth in the same situation as he would have been, had the contract been performed. The answer was the cost of replacement of the pool, otherwise a builder of swimming pools would never need to perform its contract. The Court of Appeal awarded Forsyth damages in the amount of £21,000, being the cost of a new pool.

No doubt Forsyth thought that he could now pocket the £21,000 and continue to swim happily in his 6'9" deep pool. However, the matter did not stop there, and the next port of call was to the House of Lords where the decision was once again reversed, reinstating the earlier decision of the trial judge. Their Lordships stated that to hold in a case of this kind that the measure of the building owner's loss was the cost of reinstatement, however unreasonable it would be to incur that cost, would seem to fly in the face of commonsense. Where the cost of remedying the defect was disproportionate to the end to be attained, the damages were to be measured by the value of the facility built in accordance with the contract, less its value as it stood. Thus Forsyth never saw his £21,000 but instead, no doubt, was faced with a considerably larger legal bill. “

The above case was indeed a controversial one as it went through several appeals and reversal in decisions. Perhaps it is an attempt to meet in between design based and performance based specification in providing the solution. I believe that no man-made law is perfect but perhaps this seems to be a fair solution for such predicament.

Building contract forms has developed over the years to tackle predicaments and eventualities guided by principles of laws and court decisions. The Set-Off Clause 30.4 is now introduced in PAM 06 which among others enable the client/architect to accept works with acceptable performance/aesthetic although not exactly in accordance with the contract.

A new provision in PAM06 i.e. clause 6.5 (e) was introduced to allow such diviation to be accepted subject to employer's consent and the set-off clause.

Under PAM98 contract form, set–off was not expressly an option to remedy works that are not in accordance to contract. In such case, one of the options is to adjust the contact sum as variation.

I certainly hope that the above British court decision is not misconstrued by contractors to take design specifications lightly. The issue of the case was to determine the measure of damages for breach of contract where the cost of reinstatement is disproportionate to the loss suffered. The application in reality shall not be applied vexatiously to compromise the aesthetic value, safety and performance of the works.