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M&E Subcontractors: Beware of your 'fit for purpose' design promise

If you are an M&E Specialist or undertake any design in this field, make sure you don't overpromise!

Any M&E Subcontractor will know that design is almost always a contract requirement - and one that you are usually responsible for in contract terms. But given the inevitable complexities that unfold on every project and factors that are outside of your control when there are so many other trades on site, how can you protect yourself, so you are not liable if things go wrong?

It starts with the contract wording. It's crucial to understand why certain phrases in the contract could open up the potential for the liability to fall at the M&E Subcontractor's feet.

'Fit for purpose' - sounds fairly harmless, yet it's anything but!

There is a real bear trap in many bespoke forms of Subcontract in the form of one phrase - 'fitness for purpose'. Why? Unless you have 100% control over the installation and use of an M&E system - which you never will - you cannot ensure that the design you have provided will meet this specification.

Instead, your design liability must be limited to having used 'reasonable skill and care' - which basically limits your commitment to do what you can within your power

The difference is huge. You probably couldn't get Professional Indemnity Insurance for the former - leaving you exposed to massive risk and potentially crippling liabilities if things go wrong.

Everyone loses when risk is passed down the chain

The funny thing is that the end user would much rather you were properly insured than not. So actually, there is no benefit to anyone in the contractual chain by passing risks like this off on to Subcontractors.

This is why we recommend carefully reviewing the orders you receive and challenging onerous contract terms. Unfortunately, the risks may not be so obvious, but once you spot them you will find that it is not so difficult to negotiate more favourable terms.

Ultimately everyone involved in the contract right up to the end-user will be better off if you do not agree to onerous terms, so communicating your reasons for change is vital. Once everyone understands the implications of the changes, you should have no problems securing approval on the new terms.

Minimise the risk by seeking specialist Contract Vetting advice

There is no need to take unnecessary risks with any M&E Subcontract. If you are unsure whether a contract could make you liable if things go wrong, it is best to seek professional guidance which Quantum CPM can provide through our Contract Vetting service.

With this service, you can get insights from experts in this field with a free initial consultation, and no obligation. We will provide you with a fixed price quote to vet a contract at any time, so you can avoid any unexpected costs both before and after the submission of tender. If you like the price we can then proceed, if not... no problem.

Please email us to arrange a free consultation or call us on 0161 974 6655.