This is a common question. Standard building contracts refer to instructions and whether they must be in writing or oral and 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 instructions 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 necessarily an instruction to carry out the work shown thereon. It may simply be 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. Unless it contains wording to the effect ‘do this’, how can it be an instruction? All drawings should be issued with a letter or instruction form clearly instructing the contractor to construct what is on the drawing.
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 instruction 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 instructions. The minutes of a site meeting may be a valid instruction if the contents are expressed clearly and unequivocally, particularly 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.
90 What can be done if a contractor refuses
to carry out an instruction and refuses
to allow the employer to send another
contractor onto the site?
Clause 3.10 of SBC requires the contractor to comply forthwith (as soon as it can reasonably 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 seven days from receipt to comply with the instruction. If the contractor still refuses, the employer may employ others to do the work and 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,1 the Court of Appeal was faced with an interesting 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 onto 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 reluctant to grant injunctions unless there is a true emergency. Usually, 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 modern brick wall, because an award of money will certainly be enough to pay for its rebuilding.
The contractor argued against granting an injunction 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 injunction to the employer, they decided that the contractor was in breach of contract for refusing access in this instance and that the liquidated damages clause was not an agreement between the parties that the contractor could continue its breach of contract. Although liquidated damages were 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 damages due to the employer in the case of a breach on the part of the contractor to complete in time, but they 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.
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 persons authorised to act on his or her behalf.
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 signed by one of the partners; if a limited liability partnership, by one of the designated members.