Purpose
The primary purpose of this clause is to delineate the responsibilities concerning the care of the Works and Goods between the Contractor and the Employer. It specifies when the Contractor is responsible and when this responsibility shifts to the Employer.
Implications
Liability Shift: The clause implies that the Contractor is liable for the care of the Works from the Commencement Date until a Taking-Over Certificate is issued. After this point, the liability shifts to the Employer.
Outstanding Work: Even after the Taking-Over Certificate is issued, the Contractor is still responsible for any work that was outstanding on that date.
Rectification of Damage: If any damage or loss happens to the Works or Goods while under the Contractor’s care, and if such damage isn’t covered under the Employer’s Risks (defined in Clause 17.3), the Contractor must rectify it at their own cost.
Post-Certificate Liability: The Contractor is liable for actions performed after the Taking-Over Certificate has been issued if they result in loss or damage. They are also liable for loss or damage that occurred before but manifests after the certificate is issued.
Expert Opinion
From a legal standpoint, this clause is crucial because it defines the temporal boundaries of liability. It serves as a safeguard for the Employer while holding the Contractor accountable for the care of the Works and Goods until a specified point in time. For example, under U.S. building codes such as the International Building Code (IBC), adherence to safety and care standards is mandatory, and failure to comply can result in legal consequences. Hence, this clause would be vital in ensuring that the Contractor maintains these standards.
Primary Aspects
Commencement Date: This is the starting point when the Contractor becomes responsible for the care of the Works and Goods. It’s crucial to note this date, as it marks the beginning of certain liabilities.
Taking-Over Certificate: This document marks a pivotal point in the project, as the Contractor’s responsibility for the entire Works or specific Sections shifts to the Employer upon its issuance.
Outstanding Work: Even after the Taking-Over Certificate has been issued, the Contractor remains liable for any work not yet completed at that time.
Liability for Damages: The Contractor must rectify any damage to the Works or Goods that happens under their care, unless such damage falls under the Employer’s Risks (as defined in Clause 17.3).
Post-Certificate Actions: The Contractor is liable for any actions taken post-certificate issuance that result in loss or damage. They are also accountable for any loss or damage arising from events that occurred before the certificate was issued but manifest afterward.
U.S. Context
In the United States, building codes like the International Building Code (IBC) and environmental laws such as the Environmental Protection Agency (EPA) regulations play a significant role. If a Contractor fails to adhere to these codes and regulations during their period of care, they could be subject to lawsuits and penalties. Therefore, understanding the duration and extent of their responsibility under this clause is essential for compliance.
Interactions with Other Clauses
Clause 10.1 ‘Taking Over of the Works and Sections’: Directly linked to Clause 17.2, as it specifies when the Taking-Over Certificate is issued, effectively shifting the responsibility for care from the Contractor to the Employer.
Clause 17.3 ‘Employer’s Risks’: Lists the risks for which the Employer is responsible, making it crucial for determining liability in the event of loss or damage to the Works or Goods.
Clause 20.1 ‘Claims’: This clause may come into play if either party believes that the other has failed to meet its responsibilities under Clause 17.2, providing a framework for lodging and resolving claims.
Clause 4.12 ‘Unforeseeable Physical Conditions’: This can have an impact on the Contractor’s obligations under Clause 17.2, particularly if unforeseeable conditions result in damage to the Works during the period of the Contractor’s care.
Clause 8.7 ‘Delay Damages’: If the Contractor’s failure to properly care for the Works results in delays, this clause could be invoked to impose damages.
U.S. Building Codes and Regulations: In the United States, failing to meet local building codes or environmental regulations during the period of care could result in legal action, making it imperative for the Contractor to be aware of and compliant with these rules.
Flowcharts
Detailed Explanation of the Flowchart
Start: The process begins when an incident occurs that could potentially affect the care of the Works.
Check Clause 10.1: The first step is to check if a Taking-Over Certificate has been issued as per Clause 10.1.
Taking-Over Certificate Issued: If yes, the responsibility for the care of the Works passes to the Employer.
Not Issued: If no, the Contractor remains responsible for the care of the Works.
Responsibility Passes to Employer: If the responsibility has passed to the Employer, check for any outstanding work.
Yes: If there is outstanding work, the Contractor takes responsibility for it.
No: The process ends.
Contractor Responsible: If the Contractor is responsible, check Clause 17.3 to determine if the incident falls under Employer’s Risks.
Employer’s Risks: If yes, the Employer is liable.
Not Employer’s Risks: If no, the Contractor is liable.
Contractor Liable: If the Contractor is liable, several other clauses come into play:
Check Clause 20.1: If claims are made, they need to be resolved.
Check Clause 4.12: Unforeseeable conditions can impact the Contractor’s obligations.
Check Clause 8.7: If the Contractor’s failure results in delays, delay damages could be imposed.
Check U.S. Building Codes: Violation of U.S. building codes could lead to legal action.
Detailed Explanation of the Flowchart
Start: The flowchart begins with the initiation of the project.
Check Clause 10.1: The first decision point checks whether the Taking-Over Certificate has been issued as per Clause 10.1.
Yes: If issued, the responsibility for the care of the Works passes to the Employer.
No: If not issued, the Contractor remains responsible for the care of the Works.
Responsibility Passes to Employer: If the Taking-Over Certificate is issued, the next step is to check if there is any outstanding work.
Yes: If there is outstanding work, the Contractor takes responsibility for it.
No: The process ends.
Contractor Responsible: If the Taking-Over Certificate is not issued, the Contractor remains responsible for the care of the Works. This leads to several checks:
Check Clause 17.3: Determine if the loss or damage falls under the Employer’s risks.
Check Clause 20.1: If there are claims, they will be resolved here.
Check Clause 4.12: Unforeseeable physical conditions affecting the Contractor’s responsibilities are checked.
Check Clause 8.7: If the Contractor’s failure to care for the Works results in delays, delay damages could be imposed.
Check U.S. Building Codes: If the project is in the U.S., compliance with local building codes and regulations is checked.
End: The flowchart ends after all checks and actions are completed.
Case Studies
Case Study 1: Natural Disaster in Florida, U.S.
Scenario:
A contractor was working on a residential development in Florida when a hurricane hit, causing significant damage to the partially completed structures.
How Clause 17.2 Applies:
The contractor was responsible for the care of the Works until the Taking-Over Certificate was issued. Since the hurricane was not listed in Clause 17.3 ‘Employer’s Risks’, the contractor had to bear the cost of rectifying the damages under Clause 17.2.
U.S. Specifics:
The contractor also had to ensure compliance with Florida Building Code, which has specific regulations for hurricane-resistant construction. Failure to comply could have led to additional liabilities.
Case Study 2: Vandalism in a New York Construction Site
Scenario:
In New York, a high-rise under construction was vandalized, causing property damage and theft of construction materials.
How Clause 17.2 Applies:
The contractor was liable for the losses as per Clause 17.2, as the responsibility for care of the Works was still with them. They had to replace the stolen materials and repair the damage at their own cost.
U.S. Specifics:
New York building codes require specific security measures at construction sites. Non-compliance could result in fines and legal actions, adding to the contractor’s liabilities.
Expert Opinion:
Both these cases underscore the importance of Clause 17.2 in delineating responsibilities for care of the Works. Contractors should thoroughly understand this clause and may consider additional insurance coverage, especially in regions prone to natural disasters or high crime rates.
Sample Letters
Letter 1: Request for Additional Security Measures
Subject: Request for Additional Security Measures to Comply with Clause 17.2
Dear [Employer’s Name],
I hope this letter finds you well. As we are both aware, under Clause 17.2, our company is responsible for the care of the Works until the issuance of the Taking-Over Certificate.
Considering the recent surge in vandalism incidents in the area, we recommend implementing additional security measures to protect the project site. This would be in alignment with local building codes, which require adequate security measures for construction sites.
We kindly request your approval to proceed with these additional security arrangements.
Best regards,
[Contractor’s Name]
Letter 2: Notification of Damage Due to Natural Disaster
Subject: Notification of Damage to the Works Due to Hurricane and Actions Under Clause 17.2
Dear [Employer’s Name],
I regret to inform you that the recent hurricane has caused significant damage to the Works. As per Clause 17.2, we are responsible for such damages and will take immediate steps to rectify them. Additionally, we will ensure that the repaired structures are in compliance with Florida’s building codes for hurricane resistance.
We will keep you updated on the progress and any changes to the project timeline.
Best regards,
[Contractor’s Name]
Letter 3: Acceptance of Liability for Vandalism
Subject: Acceptance of Liability for Vandalism Under Clause 17.2
Dear [Employer’s Name],
We acknowledge that under Clause 17.2, we are responsible for the recent vandalism and theft that occurred at the construction site. We will replace the stolen materials and repair the damages at our own cost.
We assure you that we are also reviewing our current security measures to prevent such incidents in the future.
Best regards,
[Contractor’s Name]
Structured Checklists for Clause 17.2 Contractor's Care of the Works
1. Proficient Execution and Deployment
| Task | Person Responsible | Deadline |
|---|---|---|
| Review Clause 17.2 thoroughly | Project Manager | Project Start |
| Consult legal team for interpretations | Legal Team | 1 week from Project Start |
| Map out responsibilities before Taking-Over Certificate is issued | Engineering Team | Project Start |
| Map out responsibilities after Taking-Over Certificate is issued | Engineering Team | Upon issuance of Taking-Over Certificate |
| Align with U.S. building codes | Compliance Officer | Continuous |
2. Assist in Applying and Overseeing
| Task | Person Responsible | Deadline |
|---|---|---|
| Regular inspections of the Works | Site Supervisor | Weekly |
| Document any incidents affecting the Works | Safety Officer | As incidents occur |
| Liaise with Employer for any changes | Project Manager | As needed |
| Review security measures | Security Team | Monthly |
| Ensure compliance with environmental laws | Environmental Officer | Continuous |
3. Guide and Monitor the Execution
| Task | Person Responsible | Deadline |
|---|---|---|
| Monitor work quality | Quality Control Team | Continuous |
| Ensure all activities adhere to Clause 17.2 | Compliance Officer | Continuous |
| Review incident reports | Project Manager | As incidents occur |
| Submit reports to Employer | Project Manager | Monthly |
| Conduct final checks before issuance of Taking-Over Certificate | Quality Control Team | Before issuance of Taking-Over Certificate |
Frequently Asked Questions (FAQs) about Clause 17.2 Contractor's Care of the Works
1. Who is responsible for the care of the Works before the Taking-Over Certificate is issued?
- Answer: The Contractor is responsible for the care of the Works before the Taking-Over Certificate is issued.
2. What happens if the Works are damaged while under the Contractor’s care?
- Answer: The Contractor is liable for rectifying any loss or damage at their own risk and cost, unless it falls under the Employer’s Risks as per Sub-Clause 17.3.
3. After the Taking-Over Certificate is issued, who is responsible for any outstanding work?
- Answer: The Contractor will be responsible for the care of any work that is still outstanding on the date stated in the Taking-Over Certificate, until this work is completed.
4. What does “care of the Works” actually mean?
- Answer: It refers to safeguarding the Works from any damage or loss, and includes taking all necessary precautions and measures to prevent such occurrences.
5. Does Clause 17.2 apply to Goods and Contractor’s Documents?
- Answer: Yes, the Contractor is also responsible for the care of Goods and Contractor’s Documents until the Taking-Over Certificate is issued.
Common Misunderstandings:
Liability Transfers Immediately: Some people think that as soon as the Taking-Over Certificate is issued, all responsibility is transferred to the Employer. However, the Contractor remains responsible for any outstanding work.
Complete Immunity Post Certificate: Contractors may assume they are no longer liable for anything after the Taking-Over Certificate is issued. This is not the case; they are liable for any loss or damage caused by actions performed after the issuance.
All Risks are Employer’s Risks: Some may misunderstand that any damage or loss post-Taking-Over falls under Employer’s Risks. This is incorrect; Sub-Clause 17.3 clearly lists the Employer’s Risks.
Unaware of U.S. Regulations: In the context of the United States, the Contractor must also adhere to local building codes, environmental laws, and other specific regulations, which is often overlooked.
Related posts:
Understanding FIDIC Yellow Clause 17.3 Employer’s Risks
Understanding Clause 12.3 Retesting in FIDIC Yellow Book 1999: What You Need to Know
Unleashing the Secrets of FIDIC Contracts: Comprehensive Guide to Clause 2.1 – Right of Access to the Site
FIDIC Clause 6.1: Engagement of Staff and Labour
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