'Fitness for purpose' terms in consultancy agreements



Consultancy agreements are a subset of service contracts. The general principles set out in this chapter will apply to consultancy agreements such that fitness for purpose terms may be express, implied by common law or implied by statute.

Various consultants may seek the deletion of an express fitness for purpose term. There is in some consulting services a high level of resistance to fitness for purpose warranties.

There is authority however for the common law implication of fitness for purpose terms in consultancy agreements. The ultimate question will be the role played by the consultant in the overall project.


CASE STUDY



Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners

[1975] 3 All ER 99



Facts


  • A company employed building contractors to construct as a warehouse which would serve as storage for oil drums.
  • The building contractors employed a firm of consultant structural engineers to design the structure of the warehouse.
  • The building contractors made known to the consultants that the first floor would have to take the weight of loaded forklift trucks moving to and fro.
  • The warehouse was built in accordance with the defendant's design.
  • After a certain time, the floor cracked and became dangerous.

Result


  • The court found that there was a common intention of the parties that the consultants should design a warehouse which would be fit for the purpose for which it was required.
  • The court implied into the agreement an 'absolute warranty' that the design would be fit for its intended purpose.

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