1. Introduction

The builder has a fundamental need to supervise and control the contractor's works.

This control is not about distrust of the contractor. Control is carried out in virtually all construction projects and all standard contracts provide for such control.

Most often, the control is carried out by hired construction managers.

A separate standard contract has been released for construction manager assignments, NS 8403 “General contract provisions for construction manager assignments”.

‍From NS 8403 paragraph 3.2.1, it is stated that the construction manager shall safeguard the interests of the builder by, among other things, conducting inspections at the construction site.

2. Overview of the rules

3. The right of the builder to conduct control — purpose

The rules on builder's control can be found in NS 8407 paragraph 20.2, NS 8405 paragraph 14.1 and NS 8406 paragraph 14.

There are no restrictions on what the developer can control as long as the control is substantiated and takes place in an appropriate manner.

In execution centres, the control will primarily focus on ensuring that the works are carried out in a professionally sound manner, in accordance with the detailed design and that the works are continuously quality assured by the contractor.

In turnkey contracts, the control may also include the design. At the same time, a builder will face some challenges in terms of control of execution in conjunction with the agreed functional requirements. The reason for this is precisely the fact that the general contractor has a freedom of choice as to how the functional requirements are met. However, the prerequisite is that this happens within the agreed framework.

There are many reasons why the builder keeps control of the execution.

The obvious reason is that inspections are carried out at the construction site to ensure that the works are carried out in a qualitatively good manner and in accordance with the agreed requirements. Many works cannot be physically controlled when they are finished. This may apply, for example, to reinforcement in concrete structures to be cast in place. Another example is insulation in walls, floors and ceilings that are then dressed in. A third example is the work to ensure tight vapor barrier using the right materials and careful clinging. A builder should have a special focus on such critical work operations since it becomes difficult and perhaps impossible to correct once the works are completed.

Another purpose of active and present control at a construction site is to ensure that the contractor complies with the public law obligations regarding proper SHA, cf. the Builders Regulations.

A third purpose is to ensure that propulsion follows a coherent plan of progress. This has, among other things, a page to the contractor's invoicing of agreed installments as progress progresses. As a rule, the payment schedule will be drawn up on the basis of the original progress plan. If there are sufficiently large discrepancies between the agreed and actual progress, the consequence of this may be that the builder will not pay more than a proportionate share of the instalment invoice. It may also be appropriate to require the progress plan and payment schedule adjusted to better match actual progress.

A fourth purpose, which most often occurs in turnkey contracts, is that the developer is happy to participate in design meetings as an observer. Then the builder can supervise that the design is carried out in a sound manner. In this case, this is in addition to the access that the developer is happy to have to the document hotel where all the design is expected to be posted on an ongoing basis.

4. Briefly about the builder's duty to notify if defects etc are detected

In the article about the contractor's design, we have mentioned, among other things, that the builder has a duty of notification to the contractor if he discovers errors etc.

Furthermore, we have pointed out that failure to notify may result in the contractor's liability being partially or completely relaxed, cf. NS 8405 paragraph 13.2 and NS 8407 paragraph 20.3, last paragraph.

The builder has a corresponding duty of notification if he discovers defects in the workmanship, see paragraph 6 below.

5. Builder's control or approval does not exempt contractor from liability for defects

Not infrequently, disagreements arise between the parties about what the consequence of the builder's ongoing control should be for the final result.

At the time of the takeover, defects and defects are revealed, which the builder complains about, and then the contractor dismisses the complaints on the grounds that the builder carried out control without saying that anything was carried out incorrectly.

The main rule and starting point is that the contractor's liability for errors and shortcomings in his contract works is not changed by the fact that the builder controls the works.

This is clear from NS 8407 paragraph 20.3, first paragraph, where it is stated that the builder's control and approval does not exempt the general contractor “from delivering the subject matter of the contract in accordance with the requirements of the contract”.

The corresponding rule follows from NS 8405 paragraph 14.1, second paragraph where it is expressly stated that the contractor cannot claim that the works have taken place “under the control of the builder” if it later turns out that the contract work is defective.

The same rule follows from NS 8406 paragraph 14, first paragraph.

In the case of the first paragraph of NS 8407 paragraph 20.3, this includes not only passive control, but also active approval.

This is pretty hefty, but it still has a lot going for it.

It is not uncommon for a general contractor to make statements that the builder has participated in design meetings and where approved solutions have been reached in the design group. However, the challenge for the builder is that he or she normally has little insight into much of what is being designed by professionals within the design team. The builder is far from being left to rely on what the general contractor and his advisers conclude about. There is a reason why the general contractor has a duty of guidance and secondly, it is so that the general contractor has freedom of choice regarding his fulfilment of the functional requirements.

When it comes to technical solutions, it will also often be the case that several technical systems will work together, and thus you also get interfaces that need to be handled.

The extent to which a builder has approved anything by participating in design meetings can therefore be discussed. Most often, the issues will be so complex that the builder lacks the prerequisites to approve anything. In addition, it is mentioned that in many cases, it is only when testing in advance of the takeover that one discovers any defects or defects.

However, the first paragraph of NS 8407 paragraph 20.3 cuts through here, stating that a possible approval does not exempt a general contractor from supplying contractually.

Accordingly, it is very important that the general contractor does not misunderstand his responsibilities and risks by relying on something he perceives as an approval from the builder's representative.

If it is later revealed that the final result was in breach of contract, it is the general contractor who suffers the greatest damage because the defects must be corrected.

6. In more detail about the duty of the builder to notify about defects

Although a contractor cannot claim that the builder has supervised and approved works on an ongoing basis, the builder cannot fail to notify if he discovers defects.

The standard contracts are quite clear that the builder has a duty of notification, and the builder must also respond immediately.

In NS 8405 paragraph 14.1, second paragraph it states that the builder must “immediately report to contractor” if he becomes aware of mistakes. The same requirement for reaction follows from NS 8406 paragraph 14, while the rule in NS 8407 paragraph 20.3, second paragraph is that the builder must notify the contractor “without undue residence”.

The difference between “immediately” and “without undue residence” is probably not accidental.

In turnkey contracts, it can be more demanding to clarify what is the right solution since one relates to functional requirements where there may be several solution options.

In execution centres, there is normally detailed design provided by the builder himself, and thus the builder should have better conditions for detecting any errors.

With that said; “without undue residence” It doesn't seem like it can take a long time to react. In practice, it is a matter of days, not weeks or months.

The next question is what consequences should there be if the builder fails to notify and thereby fails to notify his duty of notification.

NS 8405 and NS 8406 are silent while NS 8407 paragraph 20.3, second paragraph has a clear provision on the consequence of such default.

From NS 8407, paragraph 20.3, second paragraph, it is stated that the builder becomes liable for the consequences of his failure to notify. This means that if the builder discovers defects while the works are in progress without intervening, the liability may be significantly greater for the builder than where the defect is discovered at the very final stage or when the works are incorrectly performed.

7. Non-contractual performance and damage to the subject of the contract during the construction period

The first and second subparagraphs of NS 8407 paragraph 20.5 apply where the general contractor himself discovers that something is wrong or that the contract work has been damaged.

In this case, the general contractor shall notify the builder of the relationship, as well as take remedial measures. The general contractor is responsible for the costs that this entails.

In NS 8407 paragraph 20.5, second paragraph, a reservation is made in case the cost of remediation becomes “disproportionately large compared to what is achieved”.

In this case, the general contractor is not obliged to repair.

Instead, the builder may demand a price reduction according to the rules of NS 8407 paragraph 42.4.

For a builder, it will usually not be satisfactory with a price reduction. For this reason, a builder should be vigilant and check on an ongoing basis and notify any failure at the earliest possible time.

Experience-wise, it costs less to rectify if a fault is detected early, than when everything is done.

If defects in the reinforcement have been observed before casting of load-bearing structures, it is necessary to notify before casting. The costs of straightening are then minimal, while the costs would have been disproportionately large if rectification were to occur after completed casting.

The corresponding provision of NS 8405 can be found in paragraph 11.2.

Furthermore, it refers to the provisions of “Risk of injury” on the subject of the contract during the construction period in NS 8407 paragraph 19.1, NS 8405 paragraph 17 and NS 8406 paragraph 10, respectively.

In the first paragraph of these provisions, it is established that it is the contractor who bears the risk of his works until the takeover.

That does not mean that any damage that affects the subject of the contract is the responsibility of the contractor. If it is possible to make it probable that the person responsible is someone other than the contractor, the person responsible for the damage will naturally be held responsible.

If, on the other hand, it is not probable that someone else is responsible, it is the contractor who bears the risk himself, and must correct it.

8. Complaints before takeover

It follows from NS 8405 paragraph 14.4. that the contractor may “in writing summons to befaring” of contract work which “not subsequently adjudicable without extraordinary measures or costs”.

This will typically apply to works that will later be dressed in, cast again, etc.

We are a little unsure how often this provision is used, but would encourage contractors to apply it anyway.

The builder is obliged to meet and it follows from paragraph 14.4, second paragraph that the builder must complain if he saw or should have seen a defect in a proper inspection.

For the entrepreneur, the benefit of such a faring is twofold.

Firstly, it is significantly less expensive to repair before dressing, molding, etc.

Secondly, the right of the builder to advertise over such works is restricted on the takeover.

Remember to write a protocol and it should be signed by both parties.

Incidentally, the inspection should be carried out by representatives of the parties or by someone with special powers to oblige the parties.

9. What can the builder do if the contractor disputes that something is wrong with his works?

The parties to a construction project will often have different opinions on whether the work is deficient, or not.

If the contractor disputes that something is wrong the builder must make a choice.

The builder can let the relationship remain as it is until the takeover, and so invoke the relationship as a deficiency. After all, the builder has notified that he considered the relationship to be a mistake, and thus cannot be “punished” for repeating his complaint.

If the builder waits until the takeover to take action, he runs the risk that the defect will be prohibitively expensive to remedy.

On the other hand, the contractor may run the risk of the builder refusing to take over if the conditions for this are met.

Neither of these solutions is necessarily preferable - for either party.

Another option is for the builder to order the contractor to remediate while the works are in progress.

If the contractor disagrees that the relationship is defective, he will be able to notify that the instruction is considered to be an order for a so-called irregular change. Then, presumably, the contractor will notify a claim for an extension of the deadline if there is a basis for this, and in any case submit a claim for remuneration adjustment.

The developer will normally dispute that there is a change, but will nevertheless maintain that the relevant situation needs to be corrected. The contractor, for its part, has the obligation to carry out the work in question even if he disputes the existence of a defect. This is what is called “jumping duty”.

By the way, we refer to the article “Amending Orders and Irregular Amendments”, read here.

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