Duty to warn in construction contracts
Credit: Shisu_ka/Shutterstock
Georgii Aleksandrov
Denuo, Moscow
georgii.aleksandrov@outlook.com
Introduction[1]
The duty to warn (obligation de conseil,[2] waarschuwingsplicht, prufungs- und hinweispflicht, обязанность предупредить) is a relatively recent concept in European construction law. It dates back to the 1960s, when French courts began to impose such an obligation on contractors.[3] The Dutch Civil Code (DCC) first enshrined the duty in law in 2003.
Meanwhile, the Russian Civil Code (RCC) has included such an obligation since 1996 and has remained unchanged to date. In addition, a similar obligation was included in both the 1905 Draft Civil Code of the Russian Empire and the Soviet Civil Codes of 1922 and 1964.
A study of English, Dutch, French, German and Russian case law has shown that this is a highly relevant issue, but one that has not been widely researched. This subject is not often covered in monographs, and only a few pages are devoted to it in classic construction textbooks.
Grounds for the duty to warn and its general characteristics
England
English statutory law does not provide for a duty to warn. However, English law is characterised by the widespread use of standard forms of construction contracts, which generally include a duty to warn.
As for the case law, there are diametrically different decisions. In a number of cases, the same judge has held that the contract contains an implied duty on the contractor to exercise reasonable skill and care and, therefore, to warn the client of defects in the design documents,[4] a position which has been criticised in doctrine.[5]
In other cases, the courts have pointed out that English law does not impose a general duty to warn on the contractor, except where damage to the property or health of third parties is involved.[6] Moreover, where the contract between the parties is detailed and specific, there can be no room for an implied duty; had the parties wished to do so, they would have included a clause to that effect in the contract.[7]
However, in University of Glasgow v Whitfield case, the court rejected the existence of a general duty to warn, stating that such a duty may arise where there is a special relationship and trust between the parties.[8]
The contractor’s duty to warn the client of certain circumstances, as shown above, is linked to the duty to exercise reasonable skill and care in carrying out the work. In English law jurisdictions, this latter duty is implied and does not require express specification in the contract.[9]
In addition, a contractor’s main duty in construction contracts has traditionally been understood as a duty to achieve a result. Therefore, the contractor’s duty to warn the client may be based on the contractor’s duty to achieve a result. The English doctrine notes that, in practice, there is little difference between the duty to exercise reasonable skill and care in carrying out the work and the duty to achieve a result.[10] Consequently, the duty to warn (which has never been regarded as a fundamental one)[11] is derived from the contractor’s two fundamental duties.
There is still no consensus under English law as to the existence of an implied duty to warn
Thus, there is still no consensus under English law as to the existence of an implied duty to warn. There are a number of circumstances that militate against its recognition, in particular the absence of the principle of good faith. Although, as shown above, this duty derives from the duty of reasonable skill and care and the duty to achieve a result. There are a limited number of cases where the courts have concluded that an implied duty exists. The duty to warn is still not recognised as a principal duty in construction contracts. It should be added that the approach in other common law countries (Canada and the United States) is different.
The Netherlands
The duty to warn only appeared in the DCC in 2003, but even before that the courts recognised the existence of such a duty on the basis of the principle of good faith.[12]
Article 7:754 of the DCC states:
‘the constructor must, not only at the moment on which he enters into the construction agreement but also during the performance of this agreement, warn the principal of any inadequacies in the construction or work that is assigned to him as far as these are known to him or reasonably should have been known to him. The same applies in case of defects or the unsuitability of things which are coming from the principal, including the land on which the principal lets others perform the work, as well as in case of errors or shortcomings in plans, drawings, designs, calculations, specifications, estimations or implementing regulations which are supplied by the principal.’
Germany
The German Civil Code (BGB) does not contain an explicit duty to warn. The parties are often guided by the rules of the VOB/B (Vergabe- und Vertragsordnung für Bauleistungen).[13] The duty to warn (both when entering into a contract and during the construction process itself) is provided for in s 3 para 3 and s 3 para 4 of the VOB/B.
The basis for the duty to warn is para 242 of the BGB, which states: ‘The debtor is obliged to perform in good faith as required by the customs of the trade.’
However, the above provisions do not answer the question whether the courts can impose a duty to warn on the contractor in the absence of clear provisions in the contract. Some German case law considers such a duty to be subsidiary, based on the principle of good faith and the provisions of the VOB/B.[14] In one case, the court held that the only role of the VOB/B provisions is to define the duty to warn, which applies even in the absence of an express reference, in accordance with the principle of good faith.[15] In another case, the court held that if the contractor failed to warn the client of its default, the latter could be held liable for the non-performance of its own works under the VOB/B provisions on contractual liability for breach of warranty (achievement of result).[16]
France
Following the 2016 reform, Article 1112-1 appeared in the French Civil Code (FCC), enshrining the duty to provide information[17] at the pre-contractual stage. However, the duty to warn[18] is not enshrined in the FCC, but is recognised in case law and doctrine. One view is that it emerged in the 1960s as a response to a decline in the number of professionals as clients and an increase in the number of professionals as contractors.[19] This conclusion is reflected in the case law. In some cases, courts have referred to the professionalism of the contractor as a justification for imposing a duty.[20] However, M Planiol notes that the contractor’s duty to provide information was recognised as early as 1835.[21]
The Court of Cassation has repeatedly held that any construction professional (a designer, a contractor, etc) has a duty to warn the client before accepting the work.[22] The basis of this duty, as in all civil law jurisdictions, is the principle of good faith.[23] Article 1104 of the FCC enshrines the principle of good faith when negotiating, concluding and performing a contract.
The French doctrine also states that the duty to warn is ancillary to the main duty to carry out the works in accordance with the requirements resulting from the client’s expectations.[24] Some authors consider that the duty to warn is part of the duty of cooperation between the parties.[25]
Russia
Russian law enshrines the duty to warn in the RCC, outlining the general range of circumstances as well as the consequences of warning/non-warning. However, there is little or no attempt to substantiate this duty in contemporary Russian doctrine. It is only possible to look at foreign experience, as well as historical background, and highlight the same classic grounds that are also reflected in Russian case law: the professionalism of the contractor,[26] good faith,[27] cooperation[28] and the contractor’s obligation to achieve results.[29]
As an alternative to the theory of contractor professionalism, I propose the position that the contractor has a duty to warn by virtue of being the person closest to the construction process. Indeed, it is not unusual for the client to be a professional. Moreover, the duty to warn extends to the subcontractor, who is liable to the contractor (both parties are professionals).
Some authors also note that the contractor, as a professional, has had to make an effort to acquire expertise. However, if the acquisition of expertise leads to increased liability, this creates a disincentive for the contractor to acquire extra knowledge and skills.[30] Thus, it should not be a question of professionalism, but of a defined scope of responsibility. The contractor must carry out the work and becomes responsible or liable for the project (or part of the project).
Russian law enshrines the duty to warn in the RCC […] However, there is little or no attempt to substantiate this duty in contemporary Russian doctrine
The justification for the duty to warn can also be found in the economic analysis of the law. When one party has obtained information relating to its relationship with a counterparty, the social cost of requiring that party to inform the other party will be lower than if the counterparty has to obtain the information itself. In addition, in some cases, warning will prevent future disputes between the parties.[31]
Scope of the duty to warn
England
The general rule is that a contractor is only obliged to warn of circumstances specified in the contract. However, the duty to warn is often not expressly stated in the contract. In Goldswain v Beltec Ltd, the court held that whether there was an implied duty to warn depended on the nature of the work to be carried out and the terms of the contract.[32] The scope of the duty to warn also depends on whether the client has engaged another professional (eg, an engineer) to advise on the matter.[33]
The contractor’s duty to warn the client only applies to defects that are obvious and ought to have been discovered. The contractor is generally not liable for errors in a design documentation.[34] The contractor does not have to actively search for defects.[35]
However, in Batty v Metropolitan Property Realisations C of A, the court imposed a duty on the contractor to verify the condition of the ground prior to construction (duty to verify) and subsequently to warn the client of any defects in the ground (duty to warn). The court reached this conclusion on the basis of the standard of a careful and professional contractor, even though the contract between the parties did not require the contractor to carry out such investigations.[36]
The contractor may also be required to warn the client, even if the client should have known about the problem.[37]
The Netherlands
What are the circumstances that the contractor must warn of? An indicative list of such circumstances can be found in Art 7:754 of the DCC, cited above. The UAV-GC 2005 only deals with obvious defects.[38]
The contractor is required to examine and verify the design documents only to the extent necessary to carry out his work. It is not required to review the design documentation (eg, re-check calculations, etc).[39] Furthermore, the mere fact that there is a considerable period of time between the preparation of the design documentation and the commencement of the works does not in itself constitute grounds for imposing an obligation on the contractor to re-examine the documentation.[40]
The contractor must take into account the competence and professionalism of the designer when examining the design documentation.[41]
In the Netherlands, the contractor must warn not only of defects of which it is aware, but also those which it should have known, given its level of professionalism in the circumstances.[42]
The Dutch courts had previously held that the contractor was not liable for failure to warn if the client had engaged a professional adviser who was responsible for a particular part of the work where the defect was found. However, in 1998 the Supreme Court of the Netherlands pointed out that the client’s knowledge of the defect did not affect the contractor’s duty to warn.[43]
The same applies to situations where the client hires a professional adviser. Practice since the decision of the Supreme Court of the Netherlands shows a lack of uniformity. Some decisions continue to maintain the prior position of excluding the contractor’s liability in such cases, while others have changed their position in line with the Dutch Supreme Court decision.
In addition, a third group of cases has emerged in which the contractor’s liability is limited in similar situations. In one case, for example, a professional adviser was hired by the client as a consultant, reducing the contractor’s liability to 60 per cent.[44]
The last point to consider is the situation where the client is aware of the defect. In the Netherlands, the contractor can prove that the client was aware of the defect and thereby exonerate itself from liability or share the liability on the basis of Art 6:101 of the DCC (‘Own fault of the injured person’). In addition, in some cases, the courts have attributed to the client the knowledge of the specialist appointed by the client.[45]
Germany
What circumstances must the contractor warn of? First of all, regardless of the application of the VOB/B provisions, the courts come to almost identical conclusions about the scope of circumstances of which the contractor is obliged to warn the client.[46] In the absence of statutory provisions, the courts take into account the contractor’s knowledge, the terms of the contract (scope of obligations, purpose of the contract).[47]
The basic assumption in German law is that the contractor is prima facie liable for defects in the project documentation that led to defects in the construction
The basic assumption in German law is that the contractor is prima facie liable for defects in the project documentation that led to defects in the construction.[48] This means that it is up to the contractor to prove that it did not breach its duty to warn. This solution is in line with the general logic of German construction law, which tends to place much of the burden and responsibility on the contractor.[49]
The contractor must verify the work of the designer and other specialists when it affects its own work.[50] It must also warn of any defects in the results of the latter’s work that are visible at a glance.[51] In such a case, it is also obliged to verify the previous work.[52] In one case, the duty to verify is considered independent and precedes the duty to warn.[53]
Other jurisdictions do not stipulate the duty to verify as a separate obligation. However, it does not mean that a contractor in France or the Netherlands does not have to verify the project documentation, the client’s instructions, etc. The emphasis on the obligation to verify is linked to the theorisation typical of the German legal culture.[54]
In one of the cases cited above, the court held that the contractor had no duty to warn the client of circumstances in which the failure of another person (eg, the designer, another contractor) would not affect its own work.[55]
However, there is also the opposite case law. In one case, for example, the work was carried out in two phases: first, one contractor cleaned and plastered the building, and then another contractor was to carry out the planned work. The second contractor’s work was unrelated to that of the first, but the second contractor noticed that the plastering had been done incorrectly. The court concluded that the second contractor should have reported these circumstances, even though they did not affect the first contractor’s work but had a negative effect on the client.[56] In another case, the court reached the same conclusion based on the principle of cooperation between the parties, since the contractor could not be isolated from the other parties and from the construction phases.[57]
The contractor may be exempt from the duty to warn if the client had knowledge of the defect. The burden of proof of the customer’s knowledge lies with the contractor.[58]
As a general rule, the duty to warn does not depend on whether or not the client has appointed a separate specialist to supervise the construction (or a specific part of it) and whether or not the client has special knowledge. However, in exceptional cases, the specific knowledge and experience of the specialist appointed by the client may lead the court to exonerate the contractor from liability for failure to warn.[59]
The contractor should not be liable in cases where it is difficult to detect defects.[60] These are cases where it is unreasonable to expect the contractor to detect defects, for example, where they have not been detected by designers, etc (ie, persons who are more knowledgeable in the matter).
It should also be noted that the contractor is liable not only for defects of which it is actually aware, but also for those of which it should have been aware, in particular on the basis of the knowledge that may be expected of a professional acting in the contractor’s field.[61]
France
What are the circumstances that the contractor must warn of? The range of such circumstances is wide and includes, for example: soil risk,[62] adequacy of the works,[63] defects in design documentation,[64] discrepancies between the cost of the works and the actual data in the estimate,[65] defects in the materials selected,[66] specific use of the works after construction,[67] errors of other parties involved in the construction,[68] regulatory and technical issues,[69] legal issues,[70] etc. Moreover, French law imposes a duty on the contractor to find out the purpose of the work.[71]
In one decision, the Court of Cassation stated that ‘the duty to warn is imposed on the contractor before acceptance of the work and it is an obligation of result’.[72]
Unlike the English courts, the French courts have held that a duty of reasonable skill and care can give rise to a duty to obtain information and give advice.[73] As with all legal systems, the scope of the duty to warn depends on the terms of the contract.[74]
Article 29.2 of the Cahier des Clauses Administratives Générales applicables aux marchés publics de travaux (CCAG Travaux)[75] states that:
‘If, during the performance of the contract, the client is required to provide the contractor with the documents necessary for the execution of the work, the contractor shall not be liable for the content of these documents. However, the contractor shall be obliged to check, before commencing the work, whether such documents contain any errors, omissions or inconsistencies which would normally be apparent to a competent person. If he finds any, he shall immediately warn the project manager or the client in writing.’
The contractor’s liability for failure to give notice may be limited in the following cases:
1. If the client has withheld information from the contractor;[76]
2. Where the client has already been informed by another person;
3. If the client uses the work for purposes other than those for which it is intended;[77]
4. If the client interferes with the construction process;[78] and
5. When the contractor cannot be held liable for obvious circumstances.[79]
The duty to warn in French law is rather onerous for the contractor (in comparison, for example, with English law) because of the wide range of circumstances and the need for a proactive stance on the part of the contractor.
Russia
Article 716 of the RCC sets out a non-exhaustive list of circumstances of which the contractor must warn the client: (i) the unsuitability or poor quality of the material, equipment, technical documentation provided by the client or the item transferred for processing (treatment); (ii) the possible adverse consequences for the client of its instructions on the manner of performance; and (iii) other circumstances beyond the control of the contractor which threaten the fitness or durability of the work performed or make it impossible to complete it in time.
Other circumstances, based on an analysis of case law, may include: incorrect definition of the scope of work by the client; poor quality of work previously carried out by another person and the result of which affects the contractor’s work; lack of necessary data; lack of working drawings for work that cannot be carried out without a drawing; lack of a licence for the work to be licensed; suspension of work by order of an authority; the need for additional work;[80] natural and climatic conditions,[81] impracticality of the work;[82] and violation of legal requirements,[83] etc.
The following circumstances exempt the contractor from liability: (i) non-disclosure of some information by the client;[84] (ii) circumstances which are known[85] or could reasonably have been known[86] by the client; (iii) the existence of hidden defects in the materials supplied to the contractor.[87]
Also, in some cases the courts may reduce the contractor’s liability where joint and several faults are involved.[88] However, the application of the fault of the client is inadmissible under the risk model of contractor liability; that is, without fault (more on this below).[89]
As for the relevant time period, Russian law is silent on when the contractor’s duty to warn terminates: at the time of acceptance, at the end of the warranty period for the work, or at some other time. The answer can only be found by referring to the general provisions on obligations. In Russian law, the duty to warn is considered a kind of the duty to provide information.[90]
Article 307(3) of the Russian Civil Code provides that:
‘when entering into, performing and after terminating an obligation, the parties shall act in good faith, taking into account the rights and legitimate interests of the other party, rendering each other the necessary assistance for the performance of the obligation and providing each other with the necessary information.’ (Emphasis author’s own.)
Thus, the RCC gives every reason to extend the duty to warn to the post-termination period. Such a situation may arise when it comes to correcting defects in the work performed.
The standard of knowledge and fault of the contractor
England, the Netherlands, Germany and France
The extent of the duty to warn depends on two factors: (i) an objective minimum standard of knowledge that can be imputed to any contractor, which extends to obvious defects that could not be overlooked by someone with a minimum degree of professionalism; and (ii) a subjective standard of knowledge, depending on the additional expertise of the contractor.[91] It should be noted, however, that the minimum standard of knowledge varies from jurisdiction to jurisdiction.
Russia
Russian statutory law does not address the question of the contractor’s standard of knowledge. However, most other duties to provide information are modelled on the objective standard, although there are also rules that set a subjective standard.[92] A Arkhipova believes that the answer to the question posed depends on the level of professionalism of both the informing party and its counterparty.[93]
However, courts often impose liability on the basis of risk, based on the professionalism of the contractor, with little (or even no) consideration of fault.[94] This approach is rightly criticised because liability for performance is primarily a risk of non-payment, and professionalism cannot justify unlimited reliance and all errors must be identified.[95]
The justification for the duty to warn is similar in all countries. In the first place it is the principle of good faith
I believe that assigning a risk-based obligation to the contractor should not be the general rule. It is permissible, for example, in EPC contracts, because in this case most of the circumstances that could potentially prevent the work from being carried out are within the contractor’s control. However, the duty to warn in EPC contracts should cover a limited set of circumstances that the contractor cannot and should not manage on its own.
Suspension of work
In contrast to other jurisdictions, Russian law strictly stipulates the need to suspend work after a warning in all circumstances. However, case law on this point is contradictory. Most courts follow a literal interpretation of Art 716 of the RCC (which enshrines the duty to suspend work).[96] However, much of the case law shows the opposite, interpreting the article contra legem and arguing that suspension is a right of the contractor and not an obligation.[97]
In some cases, there is a logical explanation, such as the discovery of circumstances that make it impossible to complete the work on time. In such a case, suspension may not be in the client’s interest as it would further delay the completion of the work.[98]
Mandatory suspension raises a number of questions. For example, what should a contractor do with certain works that cannot be suspended immediately? It is also possible to imagine work that, if suspended, could not be continued at a later date but would have to be carried out from scratch (eg, pouring of the foundation).
On the one hand, if the contractor cannot reasonably anticipate the client’s intention to terminate the contract, it should not suspend such work, as this would cause a disproportionate loss to the client. On the other hand, continuing the work may also cause the client to suffer a loss if it decides to terminate the contract. The contractor should then calculate the loss under the various scenarios and conclude accordingly whether to suspend the work.
In addition, the continuation of the work may put the contractor at risk of being refused payment for the work actually performed (increased in scope and type).[99]
Although a mandatory suspension gives the contractor certainty (it simply suspends work and this circumstance cannot then become grounds for liability because the suspension was caused either by force majeure or by the fault/delinquency of the client), it is hardly in the interest of the client in most cases (and it is in the client’s interest that this rule exists). At the very least, it is worth considering excluding the mandatory suspension of work in the cases described above (existence of circumstances that make it impossible to complete the work on time or complex technological stages of work whose suspension is impossible/unreasonable).
The question then arises as to whether all stages of the work must be suspended or only those directly affected by the impeding circumstance. The case law on this point is also contradictory.[100] In my view, the second option is the correct one. In one case the court stated:
‘The suspension of all work under the contract, not just those works in the course of which an obstacle was identified and those that followed, would not constitute good faith on the part of the contractor, who could and did carry out the work in question as long as it was possible to do so before receiving replies from the client. To do otherwise would not have been conducive to the efficient performance of the contract within a very short period of time after the grounds for the suspension had ceased to exist.’[101]
It can be argued that the client can withdraw from the contract on receipt of a warning and that continuing with other parts of the work would incur additional costs for the client. However, the presumption should be that the contract should remain in force and not be terminated, because the party’s will to terminate the contract must be explicit.[102]
Consequently, the general rule should be that, upon discovery of a circumstance preventing the performance of the work, the contractor must continue to carry out those types of work which are capable of being performed, unless the contractor has reasonable grounds to assume that the client, upon discovery of a particular circumstance, wishes to terminate the contract.
Conclusion
The following conclusions can be drawn from this study.
1. Russia and the Netherlands are two examples where the duty to warn is enshrined in statutory law. In Germany and France, the duty to warn is recognised in court practice. In England, the courts are in most cases inclined not to recognise such a duty, except in cases of potential harm to property or the health of third parties.
2. The justification for the duty to warn is similar in all countries. In the first place it is the principle of good faith (except in common law countries). The professionalism of the contractor, the principle of cooperation and the duty to achieve results can also be highlighted. However, in my opinion, the closest justification is the contractor’s closest proximity (among all participants) to the process of carrying out the work rather than its expertise.
3. All jurisdictions impose not only a duty to warn but also a duty to verify project information and existing work, although the duty to warn and duty to verify are articulated as separate duties only under German law.
4. The analysis of case law shows that all jurisdictions recognise the same circumstances of which the contractor must warn the client. However, a common feature in all jurisdictions (regardless of the statutory duty to warn) is a case-by-case approach to deciding whether or not a duty to warn exists.
5. There is a fundamental difference in how the duty to warn is affected by the professional adviser on the client’s side. In most cases in Russia and Germany, it has no effect on the duty to warn, while in England, the opposite position is enshrined. In the Netherlands, court and arbitration practice is contradictory.
6. A feature of Russian law is the approach dominant in court practice which enshrines contractor liability under the risk model (without regard to fault) rather than the objective or subjective fault model.
7. Russian law stipulates a unique obligation to suspend work in all cases where circumstances preventing work performance are identified. I consider such a requirement to be unnecessary in some cases, for example, when there are circumstances that make it impossible to complete the work on time or complex technological phases of work the suspension of which is impossible/unreasonable.
[1] This article was first published in Russian: G A Aleksandrov, ‘Circumstances of which the contractor is obliged to warn the client’ in Problems of construction law (Ed: N B Scherbakov, 2003), pp 20–62.
[2] It is worth noting that in France, the emphasis is not only on giving information from the contractor to the client, but also on what the client should do in a given situation. However, this difference is purely linguistic, as in other countries, as will be seen below, the duty to warn sometimes includes a statement on how to solve the problem.
[3] C E C Jansen, ‘Towards a European Building Contract Law: Defects Liability: a Comparative Legal Analysis of English, German, French, Dutch and Belgian Law’ (WEJ, Tjeenk Willink, 1998) p 283.
[4] Equitable Debenture Assets Corporation Ltd v William Moss Group Ltd (1984) 1 Const LJ 131; Victoria University of Manchester v Hugh Wilson and Lewis Womersley and Pochin (Contractors) Limited (1984) CILL 126; (1985) Con LR 52; Edward Lindenberg v Joe Canning and Others (1993) 9 Const LJ 43; 62 BLR 147; 29 Con LR 71.
[5] R Wilmot-Smith, Construction Contracts: Law and Practice (Oxford University Press, 2006), p 45.
[6] University of Glasgow v Whitfield (1988) 42 BLR 66; McQuade v Solchek Pty Ltd (1988) 5 BCL 131; Oxford University Press v John Stedman Design Group (1990) 34 Con LR 1. This is a tort, not a contractual liability.
[7] University of Glasgow v Whitfield (1988) 42 BLR 66.
[8] Ibid.
[9] Cooper v Australian Electric Co Ltd (1922) 25 WALR 66; Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners (1975) 1 WLR 1095; Zorba Structural Steel Co Pty Ltd v Watco Pty Ltd (1993) 115 FLR 205; Henderson v Merrett Syndicates Ltd (1995) 2 AC 145; Astley v Austrust Ltd (1999) 197 CLR 1.
[10] J Bailey, Construction Law, (2nd ed, Informa Law from Routledge, 2016), p 209.
[11] J Luzak, ‘The implied duty of a service provider to warn about a risk of construction defects resulting from a contract with a third party, with emphasis on defects resulting from design failures: A case study on the precontractual and contractual duty to warn in English, German and Dutch law and in the Draft Common Frame of Reference’ (Thesis, Universiteit van Amsterdam, 2011), p 33.
[12] J Luzak ‘Client satisfaction: incentive for service providers to warn their clients?’ in Gedrag en privaatrecht: over gedragspresumpties en gedragseffecten bij privaatrechtelijke leerstukken (Eds: WH van Boom, I Giesen, AJ Verheij, 2008), p 90.
[13] VOB/B rules are mandatory for contracts in the public sector. However, most construction contracts in the private sector are also concluded on the basis of VOB/B rules.
[14] BGH, 18.01.1973, VII ZR 88/70, NJW 1973, 518 (hereinafter, unless otherwise stated, all references to German case law cit from: J Luzak, ‘The implied duty of a service provider to warn about a risk of construction defects...’ see n 10 above).
[15] OLG Bremen, 15.02.2001, 5 U 69/00c, BauR 2001, 10.
[16] OLG Karlsruhe, 28.10.2002, 7 U 87/02, BauR 2003, 10, p 638.
[17] The duty to inform (obligation d’information) and the duty to advise (obligation de conseil) differ significantly. The duty to advise is more onerous for the contractor. The duty to inform is confined to the provision of information, whereas the duty to advise includes an assessment of the particular and, where appropriate, advice as to the contract, product or service (A Dionisi-Peyrusse, Droit civil Les obligations, Tome 2, CNFPT, 2008, p 88).
[18] Although in France the term is ‘devoir de conseil’ (literally ‘the duty to advise’) I will use the term ‘the duty to warn’ to keep the terminology unified, given that, as shown in the introduction, the terms do not differ in substance.
[19] See n 2 above, p 302. It is worth noting that such a duty has emerged not only in contracting but also in other complex areas. Such a duty exists for suppliers, lawyers, notaries, etc. F. Terré, Droit civil. Les obligations, (12 ed, Dalloz, 2019), p 921–22.
[20] CA Paris, 9 June 1999, AJDI 1999, 818.
[21] M Planiol, Course in French Civil Law. Part Two: Theory of Obligations, translated from French by VY Gartman, (1911), p 740.
[22] Cass 3e civ, 27 January 2012, no 08-18026.
[23] See n 2 above, p 289–90.
[24] M Faure-Abbad, Droit de la construction, (3rd ed, Gualino, 2016), p 51.
[25] See n 2 above, p 290.
[26] Ruling of the Commercial Court of the Ural District of 13 February 2023 no F09-9483/22 in case no A07-6650/2022; Ruling of the Commercial Court of the East Siberian District of 6 May 2019 no F02-1799/2019 in case no A33-9688/2017.
[27] Ruling of the Plenum of the Supreme Court of Russia No 25 of 23 June 2015; Ruling of the Commercial Court of the Volga-Vyatka District no F01-3777/2022 of 8 February 2023 in case no A31-15196/2021; Ruling of the Commercial Court of the West Siberian District no F04-8210/2022 of 16 February 2023 in case no A45-31402/2021.
[28] TE Abova, LV Andreeva, EB Anikina, Commentary to the RCC, (3rd ed, Yurite Izdat, 2006), part 2.
[29] Ruling of the Volga-Vyatka District Commercial Court of 2 August 2022 no F01-3580/2022 in case no A79-7452/2019.
[30] See n 11 above, p 26.
[31] Ibid.
[32] Goldswain v Beltec Ltd (2015) EWHC 556 TCC, 159 Con LR 46.
[33] Aurum Investments Ltd v Avonforce Ltd (2000) 78 Con LR 114.
[34] EDAC v Moss (1984)1 Const LJ 131; C Chern, The law of construction disputes, (3rd ed, Informa Law from Routledge, 2020), pp 96–97; S Furst and V Ramsey, Keating on Construction Contracts, (10th ed, Sweet & Maxwell UK, 2016), para 3-079.
[35] Stagecoach South Western Trains Ltd v Hind (2014) EWHC 1891 (TCC).
[36] Batty v Metropolitan Property Realisations C of A (1978) QB 554.
[37] Sahib Foods Ltd v Paskin Kyriakides Sands (2003) 87 Con LR 1.
[38] L Klee, International Construction Contract Law, (John Wiley & Sons Ltd, 2018), p 121.
[39] See n 10 above, p 97.
[40] RvA 10.12.2010, nos 71.487 and 29.953 (hereinafter, unless otherwise stated, all references to the case law of the Netherlands cit from: J Luzak, ‘The implied duty of a service provider to warn about a risk of construction defects...’ see n 10 above)
[41] RvA 7.04.1986, no 12.253, BR 1986, p 548.
[42] See n 10 above, p 99.
[43] Сase of 18.09.1998, NJ 1998, 818 (KPI/Leba).
[44] RvA 18.05.2011, no 32.198.
[45] RvA 29.11.2004, no 24.637, BR 2007, p 527.
[46] See n 10 above, p 78.
[47] OLG Hamm, 28.01.2003, 34 U 37/02, BauR 2003, 7, p 1052.
[48] M Chao-Duivis et al, ‘Studies in European Construction Law’, European Society of Construction Law (2015), p 277.
[49] MA Pshenichnikov, ‘On the application of article 716 of the Civil Code of the Russian Federation’, Problems of construction law (a collection of articles ed by NB Shcherbakov) 1(2022), p 277.
[50] See n 10 above, p 79.
[51] OLG Hamm, 28.01.2003, 34 U 37/02, BauR 2003, 7, p 1052.
[52] OLG Celle, 12.12.2001, 7 U 217/00, NJW-RR Zivilrecht 2002, 17, p 594.
[53] See n 2 above, p 294.
[54] See n 2 above, p 296.
[55] OLG Karlsruhe, 28.10.2002, 7 U 87/02, BauR 2003, 10, p 638.
[56] OLG Dresden, 20.01.2004, 14 U 1198/03, IBR 2004, 615.
[57] OLG München, 30.11.2005, 27 U 229/05, IBR 2006, 551; IBR 2006, 613.
[58] 9 OLG Düsseldorf, 13.03.2003, 5 U 71/01, IBR 2003, 1077.
[59] See n 2 above, p 313.
[60] OLG Köln, 06.12.2005, 22 U 72/05, IBR 2007, 192.
[61] BGH, 30.04.1992, VII ZR 185/90, BauR 1992, 627.
[62] Cass 3e civ, 17 April 1984, JCP 1984, IV, 198.
[63] Cass 3e civ, 24 September 2013, no 12-24642.
[64] Cass 3e civ., 5 February 1992, no 89-15948.
[65] Cass 3e civ, 25 November 1987, no 86-11518.
[66] CA Aix, 17 January 2002, no 171706 (difficulties in the supply of material); CA Dijon, 3 September 2002, no 187288 (questionable origin of the material); Cass 3e civ, 4 July 2007, no 06-14761 (the flammable nature of the material).
[67] CA Paris, 12 September 2001, no 152818 (risk of carbon monoxide poisoning).
[68] Cass 3e civ, 9 February 2000, no 98-14184.
[69] Cass 3e civ, 15 March 1988 (changes in emission control regulations); Cass 3e civ, 16 July 1996, no 93-20431 (the requirement to comply with the authorisation granted); CA Aix, 11 March 1999, no 043330 (the requirement to apply in advance for the installation of a swimming pool).
[70] Cass 3e civ, 20 December 2000, no 99-14990 (violation of neighbourhood rights as a result of construction); Cass 3e civ, 15 October 2015, no 14-24553 (violations of the terms of the easement).
[71] Cass 3e civ, 25 May 2004, no 03-12 097.
[72] Cass, 3e civ, 27 January 2010.
[73] P Rosher, ‘Good faith in construction contracts under French law and some comparative observations with English law’, The International Construction Law Review (2015), p 302. (Cit from: P Lawrenson, ‘Duties to warn, advise and provide information: a comparative study of the obligations of contractors and design professionals in French and English law’, IBA Construction law international, 4(16), 2021, p 58.)
[74] Cass 1e civ, 3 March 2011, no 09-70754.
[75] This document is not binding, but may be used if referred to in the contract.
[76] Cass 3e civ, 6 July 1988 (the client has not provided the contractor with surveyor’s drawings and information about the existence of an old agreement on the use of the property).
[77] CE, 4 March 1991, INRA, no 55376.
[78] Cass 3e civ, 25 May 1976 no 75-10484 (the client began to manage the construction process, participating in the execution of the work, choosing materials, concluding contracts with suppliers, etc).
[79] Cass 3e civ, 31 March 1993 (the client must have been aware that its many changes and additions will result in higher costs); Cass 3 e civ, 11 December 1991, no 88-15895 (the case concerned the subcontractor’s failure to notify the general contractor of the need for a building permit).
[80] AE Sherstobitov, ‘Article-by-article commentary to § 1 General provisions on the contract, Chapter 37 Work and labor contract (Articles 702 - 729) of the Civil Code of the Russian Federation’, Bulletin of Civil Law (2011), n 4.
[81] Ruling of the Russian Supreme Court of 23 July 2015 no 310-ES15-6005 in case no A09-1118/2014.
[82] Ruling of the Commercial Court of the Volga-Vyatka District of 29 October 2019 no F01-5489/2019 in case no A29-11085/2018.
[83] Ruling of the Commercial Court of the Volga-Siberian District of 17 January 2023 no F02-6357/2022 in case no A74-7541/2021.
[84] Ruling of the Ninth Commercial Court of Appeal of 22 September 2011 no 09AP-23081/2011 in case no A40-89364/10-110-761 (the client concealed information about the existence of a court dispute over the land on which work was to be carried out).
[85] Ruling of the Commercial Court of the Volga-Siberian District of 22 March 2021 no F02-1758/2021 in case no A19-11225/2020; Ruling of the Commercial Court of the Far Eastern District of 17 May 2018 no F03-1498/2018 in case no A59-172/2017.
[86] Ruling of the Commercial Court of the Moscow District of 28 July 2021 no F05-4805/2020 in case no A40-206501/2018; Ruling of the Commercial Court of the Moscow District of 9 June 2020 no F05-4805/2020 in case no A40-206501/2018. It is likely that ‘could’ in this case should be interpreted as ‘should’.
[87] Ruling of the Commercial Court of the Far Eastern District of 16 March 2016 no F03-440/2016 in case no A51-8033/2015.
[88] Ruling of the Commercial Court of the West Siberian District of 13 February 2018 no F04-6516/2018 in case no A03-2039/2017.
[89] See n 48 above, p 288.
[90] See n 79 above.
[91] See n 2 above, p 300.
[92] AG Arkhipova, ‘Obligation to provide information under para. 3 Art. 307 of the Civil Code of the Russian Federation’, Bulletin of Economic Justice of the Russian Federation, 2017, n 2.
[93] Ibid.
[94] See n 48 above, pp 282-83.
[95] Ibid.
[96] Ruling of the Russian Supreme Court of 28 July 2016 no 309-ES16-9952 in case no A71-288/2015; Ruling of the Russian Supreme Court of 18 July 2016 no 305-ES16-7348 in case no A40-137467/2015; Ruling of the Commercial Court of the Moscow District of 17 February 2021 no F05-5375/2020 in case no A40-274540/2019.
[97] Ruling of the Russian Supreme Arbitration Court of 21 August 2012 no VAS-11025/12 in case no A56-29441/2011; Ruling of the Commercial Court of the Moscow District of 17 September 2018 no F05-14390/2018 in case no A41-85265/2016; Ruling of the Commercial Court of the Moscow District of 31 May 2016 no F05-5885/2016 in case no A40-148806/15; Ruling of the Commercial Court of the North Caucasus District of 18 May 2011 in case no A53-14720/2010.
[98] Ruling of the Commercial Court of the North West District of 13 February 2020, no F04-7268/2019 in case no A75-9692/2019.
[99] Ruling of the Commercial Court of the Far Eastern District of 12 November 2021 no F03-6148/2021 in case no A24-4068/2020.
[100] Requirement to suspend all types of work: Ruling of the Commercial Court of the Volga-Siberian District of 16 August 2019 no F02-3612/2019 in case no A78-13801/2017; Ruling of the Commercial Court of the Moscow District of 26 December 2022 no F05-32591/2022 in case no A40-194894/2021; Ruling of the Ninth Commercial Court of Appeal of 20 August 2021 no 09AP-28454/2021 in case no A40-150343/2020. Requirement to suspend part of the work: Ruling of the Commercial Court of the West Siberian District of 16 February 2023 no F04-8210/2022 in case no A45-31402/2021; Ruling of the Commercial Court of the Ural District of 9 February 2016 no F09-2929/15 in case no A50-17375/2014; Ruling of the Third Commercial Court of Appeal of 14 February 2014 in case no A33-15642/2013.
[101] Ibid.
[102] Ruling of the Commercial Court of the West Siberian District of 20 June 2022 no F04-2829/2022 in case no A27-15382/2021; Ruling of the Commercial Court of the Moscow District of 4 May 2018 no F05-5041/2018 in case no A40-95746/2017.
Georgii Aleksandrov is a bachelor of law, LLM candidate at Lomonosov Moscow State University and a lawyer at Denuo in Moscow. He can be contacted at georgii.aleksandrov@outlook.com. |