BuksKeymasterJanuary 27, 2018 at 4:39 pmPost count: 65
Contract administration within the construction industry is usually carried out by team of professionals on behalf of the client/employer.
The purpose of employing an architect, engineer, or other professional on a building project as an administrator is to give the employer the benefit of that professional’s skill and experience.
Some of the duties of a contract administrator are as follows:
Defining the employer’s brief into drawings , specifications,
Administering the building contract
Ensuring compliance to standards of workmanship and quality
Giving instructions to the contractor
Passing relevant and prompt information to the contractor
Inspection and monitoring of the contract work
Is the Contract Administrator an Employer’s Agent?
A contract administrator who is employed to supervise the carrying out of building works may in certain respects be regarded as an agent of the employer. In acting for the employer, there are limits to what a contract administrator can do in terms of forming or varying contracts, instructing work to be suspended and in delegating authority to others.
An agent can of course be expressly authorized to do anything on behalf of a client. However, the important question of law concerns the extent of authority that will be implied where nothing specific is said. This is important because, where a contract administrator acts without any authority; the employer will not be bound by what is done. In such circumstances, a third party who has suffered loss may make the contract administrator personally liable for damages, under a type of legal action called breach of warranty of authority.
Can a contract administrator order a suspension of work?
As a general principle, neither the employer nor the contract administrator has any legal right to order the contractor to suspend work. Once the contract work has commenced, it is the contractor’s right and duty to carry it through in a regular fashion, and the employer’s duty to do nothing that will prevent the contractor from doing so. As a result, an unjustified order to suspend work, given by the contract administrator, will constitute a breach of contract by the employer for which the contractor may claim damages. Further, if the circumstances of the suspension are such as to show an intention to no longer to be bound by the contract, this may constitute a ‘repudiatory breach’
Can a contract administrator delegation his authority?
As a general principle, an agent is expected to act personally for a client, and not to delegate the task to a sub-agent. However, authority to delegate may be given expressly or by implication.
On this basis it has been held that, where a contract administrator is instructed to invite tenders for the contract work on the basis of bills of quantities, authority to appoint a quantity surveyor will be implied. What is not clear, however, is whether this creates a direct contract between the employer and the quantity surveyor, or whether it simply means that the contract administrator can recover from the employer sums paid to the quantity surveyor. Similar authority to appoint may be implied wherever the building contract provides that variations are to be measured by a quantity surveyor. In such circumstances it is clear that different parts of the ‘contract administration’ are to be carried out by different people.
Fiduciary duties of the contract administrator to the client
Duty of care and skill
In carrying out ‘administrative’ functions under a building contract, the contract administrator owes a duty of reasonable care and skill to the employer. If that duty is breached, the contract administrator will be liable in damages to the employer for any resulting loss. In considering the contract administrator’s functions, two areas of special importance relate to the giving of advice and information and to the monitoring of the construction work.
Giving advice to the employer
The kind of matters on which it is reasonable to expect a contract administrator to give advice will naturally vary with the type of project, the professional background of the contract administrator and so on.
In relation to matters of cost, a contract administrator may well advise the employer on the appointment of particular contractors or sub-contractors. This is especially likely where a tendering process has taken place. In such circumstances, a duty of care is again owed. Thus, where an architect recommended a particular contractor as ‘very reliable’, the architect was held liable for losses suffered by the employer when the contractor executed defective work and then became insolvent.
Another matter on which employers depend upon the contract administrator is advice about rights and duties under the building contract. It is extremely important that a contract administrator explains the terms of the building contract to the employer before the contract is executed.
A contract administrator, in the course of work, may well become aware that other consultants employed by the same client have been guilty of breaches of duty. It has been held that the contract administrator (or, for that matter, any consultant) is under an implied obligation to inform the employer of such breaches. However, the contract administrator is under no implied obligation to inform the employer of his or her own breaches.
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