61 What counts as an instruction?
This is a common question. Standard building contracts refer to instructions and whether they must be in writing or oral, how they may be confirmed and by whom, but contracts do not specify what constitutes an instruction. Usually, to qualify as a written instruction, there must be an unmistakable intention to order something and there must be written evidence to that effect. Not all written instruc- tions are clear – some are decidedly vague (contractors might believe deliberately so). Although an instruction may be implied from what is written down, it is safer from the contractor’s point of view to ensure that the words clearly instruct. To take a common example: a drawing sent to a contractor with a compliments slip is not necessar- ily an instruction to carry out the work shown thereon. It may be simply an invitation to the contractor to carry out the work at no cost to the employer, it may be inviting the contractor’s comments, or it may simply be saying: ‘This is what we thought about doing, but we changed our minds’. Although most adjudicators would no doubt assume that a drawing sent with nothing but a compliments slip was an instruction to do the work shown on the drawing, such an assumption would be subject to challenge.
The same comment applies to copy letters sent under cover of a compliments slip. Architects sometimes send a letter to the employer saying that they are going to instruct the contractor to do certain additional work in accordance with the employer’s wishes. Those same architects misguidedly believe that if they send a copy of that letter to the contractor, it amounts to an instruction to the contractor to get on with the work. Clearly, that is wrong. An instruction on a printed ‘Architect’s Instruction’ form is valid if
signed by the architect. An ordinary letter can also be a valid instruction. If the architect wishes, he or she can write the instruc- tion on a piece of old roof tile or on the side of a brick. Providing they are signed and dated and legible, they are all valid instruc- tions. The minutes of a site meeting may be a valid instruction if the contents are expressed clearly and unequivocally and particu- larly if the architect is responsible for the production of the minutes. However, site meeting minutes are obviously not a good medium for issuing instructions, because of the possible delay in distribution.
62 What can be done if a contractor refuses to carry out an instruction and refuses to allow the
employer to send another contractor on to the site?
Clause 3.10 of SBC requires the contractor to comply forthwith (as soon as it reasonably can do so) with architect’s instructions that are properly empowered by the contract. If the contractor refuses to do so or simply ignores requests to get on with the instruction, the architect is entitled to issue a written compliance notice under clause 3.11. This notice gives the contractor 7 days from receipt to comply with the instruction. If the contractor still refuses, the employer may employ others to do the work and then an appropriate deduction of all the additional costs may be made from the contract sum. So far so good. The question refers to the hopefully rare instance where a contractor refuses to give access to the site to the other contractor engaged by the employer to carry out the instruction.
In a recent case,104the Court of Appeal was faced with an inter-
esting conundrum. Many of the details are unimportant for this purpose, suffice to say that an impasse arose between the employer and the contractor because the contractor, having objected to and refused to carry out an instruction, would not allow the employer to bring another contractor on to the site to do it. The employer sought an injunction to prevent the contractor from refusing access. That is the background. It should be said that both parties must have believed that they had good reason for acting as they did up to that point.
Now the position becomes interesting. Courts are generally reluc- tant to grant injunctions unless there is a true emergency. They will grant an injunction only if the problem is such that no amount of future damages can sufficiently recompense the injured party after trial. For example, a court may well grant an injunction to prevent someone chopping down a five-hundred-year-old oak tree in a prominent position because, once chopped down, no amount of money could restore the tree. However, a court would be unlikely to grant an injunction to prevent the demolition of an ordinary brick wall, because an award of money will certainly be enough to pay for its rebuilding.
The contractor argued that an injunction should not be granted because the contract contained a liquidated damages clause and, if the contractor was ultimately found to be wrong, the liquidated damages would recompense the employer for the resultant delay. The Court of Appeal disliked this argument. In granting the injunc- tion to the employer, they decided that the contractor was in breach of contract for refusing access in this instance and that liquidated damages was not an agreement between the parties that the con- tractor could continue its breach of contract. Although liquidated damages was ordinarily the most damages that could be recovered for delay in completion, they did not properly compensate the employer for the loss it would suffer by the continuing breach.
On the basis of this case, it seems that employers can expect to obtain injunctions if contractors refuse access to the site to other contractors who have been lawfully engaged under the terms of the contract.
It is sometimes said that liquidated damages are not only dam- ages due to the employer in the case of a breach on the part of the contractor to complete in time but are also to be regarded as the price payable by the contractor for the option of taking longer to complete. This case shows that such a view is not correct.
63 Should AIs be signed by an individual or the firm? This question crops up from time to time. It is usually asked by architects fearful that an instruction will be invalid if not signed by the correct person.
The simple answer to the question is that an AI may be signed by any person who is authorised to do so. The architect is the person named in the contract. Only the architect may issue certificates and
instructions under the terms of the contract, but that necessarily includes anyone authorised by the architect. The architect should be careful to inform all interested parties of the names of all per- sons authorised to act on behalf of the architect.
Very often, the name of the architect in the contract will be a firm ‘XYZ Architects’ or some such name. Therefore, the letter informing all parties of authorised persons, must be signed by ‘XYZ Architects’. If the firm is a limited company, the signature of a director will do: if a partnership, it should be one of the partners. If it is a limited liability partnership, it ought to be one of the desig- nated members.
Where AIs, certificates or letters are signed by an authorised per- son, that person should sign ‘for and on behalf of’. This is undoubtedly the best method. It is not sufficient that the letter, etc. is on headed paper. The important thing is that it must be plain that the signatory is not signing on his or her own behalf, but on behalf of the architect, be that company, partnership or sole principal. So it is probably sufficient if the name of the firm is typed where the signa- ture would normally go and the authorised person signs immediately underneath. Sometimes people sign the actual name of the architect. For example, if the named architect is John Smith, one of the autho- rised persons, say Alice Davis, may sign ‘John Smith’ provided she initials the signature.105
The use of mechanical impressions of signatures are of doubtful validity and should be avoided. A mechanically impressed signa- ture together with the initials or signature of an authorised person is probably valid.
64 Can the architect issue an AI if the client says NO? Obviously, because the client engages the architect for his or her professional skill, the client is able, at any time, to dispense with the architect’s services. If the RIBA terms of engagement are not being used, such termination of the architect’s engagement may amount to repudiation on the part of the client and the architect may be able to claim substantial damages. Therefore, the client can stop the architect issuing instructions or performing any other duty under the building contract by simply terminating the engagement.
However, the question is whether the employer can stop the archi- tect issuing an instruction without terminating the engagement. The answer to this question lies in the purpose for which the archi- tect may issue instructions. The architect is empowered to issue instructions by various clauses in the building contract. The archi- tect’s terms of engagement with the client may well limit the issue of instructions and require the architect to seek authorisation before issuing any instruction that involves the expenditure of addi- tional money.
The contractor, of course, is not interested in the contents of the architect’s engagement. Provided that an instruction issued by the architect is empowered by the terms of the contract, the contractor is secure in carrying it out, because it will be paid for it. If the con- tractor is in any doubt whether the instruction is empowered it can always ask the architect to name the empowering clause (see SBC clause 3.13). If the instruction that the architect proposes to issue has any monetary or design implications, there is little doubt that the client can instruct the architect not to issue and the architect is obliged to comply. The position is less clear in the case of instruc- tions that simply clarify something on a drawing or in a specification. Such instructions actually do not change the Works at all. In a nutshell and depending upon the precise terms of the con- ditions of engagement, the client can stop the architect issuing any instruction that results in a variation to the Works. It is unlikely that, short of termination, the client can prevent the architect issu- ing any other kind of instruction.
65 If the employer gives instructions on site directly to the contractor, must the architect then confirm those instructions in writing?
Many employers seem to find it difficult to stay away from site. It should go without saying that employers should never be allowed to visit site unaccompanied. At best they will get a warped idea of what is happening (for example, all the rooms look too small at foundation stage); at worst they may answer questions from the contractor or give instructions even when no questions are asked. The contractor should be carefully briefed at the pre-start meeting always to refer any queries to the architect and never to ask the employer any questions directly. Despite this, instructions may be given directly to the contractor and the contractor may carry out
the instruction without reference to the architect. The architect is not obliged to confirm the instructions in writing.
The first thing to establish is why and in what circumstances the instructions were given. The second is to establish the effect of the instructions on the Works as a whole. It may be that the instruction was given by the employer who told the contractor to check with the architect, or it may be that the employer gave the instruction without really understanding what was being asked. Neither of these circumstances exonerates both employer and contractor from the charge of failing to act in accordance with the contract of course, but life is like that. People fail to act as they should.
If the architect decides that the instruction, although given directly, is simply the kind of instruction that, if the employer had asked the architect to issue, would have been issued without diffi- culty, the architect will presumably have no problems with ratifying the instruction. The position becomes more difficult if it is an instruction that the architect would not have issued and which per- haps has a detrimental effect on the project. There is no doubt that the employer and contractor, as parties to the contract, are entitled to vary the terms as they wish. If the employer decides to give a direct instruction, albeit the contract provides for only the architect to do that, and if the contractor accepts the instruction, it is likely that either a fresh little contract has been formed for that item of work or, alternatively, it may rank as a variation to the original con- tract. Obviously, the architect cannot include the value of such a variation in a certificate unless it is the subject of an architect’s instruction. If the architect does not confirm with an instruction, the cost of the variation must be paid by the employer directly.
A contractor who accepts a direct instruction from the employer is unwise. If the contractor carries out the work, but the employer con- tends that the instruction was never given, the contractor is in breach of contract and can be obliged to amend the work to conform to the contract documents.