This month’s contract clinic question comes from a main contractor worried about a data centre project where the client wants to include a contract a clause on the effects of climate events. Peter Vinden looks at this growing area of risk.
The question
We’re building a data centre in a coastal location in Wales under a bespoke contract. The client has insisted in the contract that we must ensure the building is fit for purpose and resistant to climate events for at least 15 years. Is this acceptable and, if so, what risks are we exposing ourselves to, having accepted the clause?
The answer
As the need for climate-resilient buildings and infrastructure increases, the construction industry will have to contend with many changes. These will range from regulations and building strategies, to the management of risk. Recent events such as Hurricane Milton and, more locally, Storm Darragh, have thrown a spotlight on the vulnerability of modern infrastructure to our changing climate.
Consultants and contractors need to keep in mind that they can face claims long after a project finishes. Uncertainty about how materials respond to climate change and whether they will remain resilient, is another thing to consider.
You can typically negotiate and agree any contractual terms you wish. So, it would be possible to accept an obligation to design and build a new data centre that is fit for its intended purpose. In this scenario, the party accepting that obligation would be expected to guarantee the building’s resilience to climate events for at least the 15 years specified.
There are, however, important legal and insurance issues that need careful consideration before agreeing to this obligation.
Implied terms
In law, a consultant’s implied design obligation is quite different to that of a contractor who is appointed to design and build a new project.
Unless explicitly stated in the contract, consultants are expected to perform their duties, such as design, specification, and inspection, with “reasonable skill and care”. They must also apply a degree of professional competence. This standard of care is implied in all consulting agreements.
Read the full article here. If you need help with a similar matter, get in contact with the team.