03_Definition Glossary

Index:

 

·         Sources of Law

·         Tort Law

·         Contract Law

·         Privity of Contract

·         Limitation Periods

·         Easements

·         Restrictive Covenants

·         Boundaries

·         Private Nuisance

·         Trespass

·         Air Rights

·         Accessibility Legislation

·         Content of a Contract

·         Reasonable Skill and Care vs Fit of Purpose

·         Copyright

·         Professional Negligence

·         Professional Indemnity Insurance

·         Collateral Warranties + 3^rd Party Rights

·         Net Contribution Clause

·         Section 106 Agreements

·         Building Regs and Control

·         Novation

·         Letter of Intent

·         Building Notice

·         Full Plans submission

·         Bespoke Agreements

·         The legal Characteristics of a Contract

 

 

 

Glossary

 

Sources of Law

Three main sources of law in the UK:

·         Common Law - UK law is based on a “common law” legal system where the rules that make up it have been developed by judges through “precedent” decisions of courts in past individual cases. 

·         Legislation – In its primary form this Is a statutory law which has been written by a governing body and has become legally enforced through the agreement of Parliament (known as an Act of Parliament).  Ie. Building Act, Health and Safety act

·         Secondary legislation is law made by bodies other than Parliament ie. Local authorities, but with the authority of Parliament and often made as a result of primary legislation. ie. Building Regulations, CDM Regulations

·         EU Law – As a condition of being part of the European Union, EU law is binding and takes precedence to domestic UK Law.  It is made up of Regulations and Directives that are typically integrated into UK through Acts of Parliament. (Relevant to architects: employment, health and safety)

 

Tort Law

·         Is a collection of civil law remedies entitling a person to recover damages for loss and injury which have been caused by the actions omissions or statements of another person in such circumstances that the latter was in breach of a duty or obligation imposed at law.

·         In architecture, Under Tort Law – Imposed by law due to existence of duty of care.

·         Negligence

·         Nuisance

·         Tresspass

 

 

Contract Law

·         A promise or set of promised that the law will enforce.

·         Self imposed obligations imposed by terms and conditions of a contract

·         Breach of contract

 

 

Privity of contract

 

·         A contract is an agreement recognised by law as binding on the parties to whom it is between only.  Privity refers to a mutually exclusive relationship to the same enforceable rights (under contract).  This means that the terms of the contract can not generally be enforced by or against someone who is not party to it.  There are two ways in which a the burndens (or benefits) of a contract can be past onto a third party.

 

·         However, the Contracts (Rights of Third Parties) Act, 1999 enables third party rights to be created specifically within a contract and the signing of a collateral warranty enables third parties to overcome the restriction of the privity of contract, extending benefits to a third party.  These are used partially when third party funders and end users of construction projects are not privy to the main contract between employer and contractor.

 

·         EXAMPLE: The privity of contract will apply to the cancer treatment center in the appointment of the architect and client.  As the architect has been appointed as the lead consultant the client and architect are bound by the privity of contact within this appointment agreement.  Any appointment of specialist sub contractors will be undertaken within a contract between the Architect and Sub contract therefore the sub contract is not linked to the client via the any privity of contract.  Third party rights or a collateral warranty my be negotiated with the sub contractor at the clients request to contractually link the two parties.

 

 

Limitation Periods

 

·         A limitation period is a time period after which liability is extinguished and court action cannot be taken.

·         In a negligence claim, time will usually run for 6 years from the date when the negligent act or omission caused damage to occur

·         In a claim based on a contract executed under hand, the limitation period is 6 years, running from the date when the contract was breached.  The period is extended to 12 years if the contract was executed as a deed and the limitation period runs from the date when the contract breach happened. 

·         The Limitation Act 1980 makes It is possible to bring a claim outside the 6-year limitation period for latent damage (damage which was not reasonably discovered before the expiry of the basic 6-year limitation period).  In these circumstances the limitation period is 3 years from the date on which the claimant had knowledge of the damage to a maximum of 15 years.

 

·         Example: Limitation periods are relevant to the Cancer Treatment job as they will be a condition of the Architects appointment.  The architect must ensure they have appropriate PII insurance to protect the firm against any potential claims of negligence or breaches in contract for the full liability period.  If, for example, if 3 years after practical completion cracking and subsidence is discovered in a corner of the building.  After further investigation it is discovered that the design of the foundations were insufficient, the architect could still be sued for the fault of the design as a negligent act as it is within the 6 year liability period.

Easements

 

Land Laws concerns the right of a landowner and the rights others may have over that land

 

·         An easement is a right which a person has over land owned by someone else. Easements are normally attached to the land rather than to a person and can be considered to last in perpetuity.

Examples of easements include:

·         Rights of way.

·         Right to light.

·         The right for underground services to pass beneath the land of a neighbouring property.

·         Right of support.

·         The right to draw water.

An easement can be created by:

·         Express grant, for example it may be set out in a conveyance deed or a transfer deed.

·         Necessity, for example if there is only one means of access between a site and a public highway.

·         By prescription, i.e. the act is repeated for a period of at least twenty years.

·         Easements can be extinguished in several ways:

·         Agreement between the parties in the form of a deed.

·         By implied release, for example it has not been used for a long period of time.

·         Where the character of the dominant land has changed.

·         By limitation of time, if a limitation was agreed.

·         By a change in law.

 

Restrictive Covenants

 

·         A restrictive covenant, is a restriction imposed by a seller of a piece of land that prevents the buyer from using it in a way that could cause harm to land the seller has retained.

 

·         For a restrictive covenant to be enforceable the land benefiting from the restriction must be identified, and the benefit must have passed to the person trying to enforce it.

 

·         Covenants – a promise contained in a deed

 

Restrictive covenants might:

·         Prevent the buy from building an extension

·         Prevent buildings or structures being erected on the land.

·         Prevent use of the land for business activity.

·         Prevent residential development on the land.

·         Restrictive covenants may have an expiry date, and may in practice turn out to be unenforceable.

 

·         Example: The seller may have sub divided a property, selling one piece with a restrictive covenants preventing the buyer from building a dwelling of more than 10 metres, guaranteeing the reservation of views for the seller.

 

 

Boundaries

·         An imaginary line that marks the confines of two contiguous parcels of land

 

Private Nuisance

·         Unlawful interference with a persons use of enjoyment of land or come right over, or in connection with it.

·         The definition of unlawful could be interpreted as “unreasonable” and may depend on the character of the neighbourhood and the duration and frequency of the interference

 

Examples:

·         Branches overhanging onto your neighbours land

·         Noxious fumes from a factory kills flowers in your garden.

 

Trespass

 

·         Trespass to land is the intentional, direct interference with land in the possession of the claimant

 

Air Rights

·         Subject to planning permission, land owners have the right to develop the clear space directly above their property.

·         These rights can be leased or sold, enabling the construction of “air-rights buildings”

·         Typically, air-rights buildings are constructed above existing infrastructure such as roads or railways, or over buildings such as low-rise shopping centres that may have been developed when space was at less of a premium

 

 

Accessibility Legislation

·         Primary Legislation = The Equality Act requires "reasonable adjustments" to be made when providing access to goods, facilities, services and premises. The duty to make reasonable adjustments is set out in paragraph 2 of both Schedule 2 (in relation to public authorities and service providers); Schedule 8 (in relation to employers) and Schedule 15 (in relation to associations).

·         Secondary Legislation = Building Regulations requiring the accessible design of buildings is regulated by the Building Regulations Part M: Access to and use of buildings.

·         Design and Access Statement required for planning

·         Engagement of an Access Consultant.

 

Content of a Contract

·         The rights and obligations of parties to a contract are defined by its terms.

·         Express terms are those that have been explicitly agreed by both parties and can be oral or in writing.

·         However, the express terms do not always constitute all the relevant terms of the agreement. In certain circumstances, Implied terms exist and can be upheld by the courts if the implied terms are necessary to give business efficacy to the agreement.

·         Ie. Implied term implied by previous course of dealings between the parties.

·         Implied by statue ie. Goods and services Act, if not agreed, it will be implied that s.13 services will be provided with reasonable skill and care /reasonable time / reasonable price paid.

 

 

Reasonable skill and care and fitness for purpose

 

·         Architecture is a profession, and the legal duty of any professional architect in carrying out their work is to exercise the reasonable skill and care that would be expected of the ordinary skilled architect.  If an architect can show that a responsible body of their profession would have done the same thing, they will not ordinarily be said to have acted negligently under the law of Torts.  Architects should never accept a term in an appointment contract requiring the delivery of a project that is "fit for purpose”.  This is because an architect may be in breach of a fitness for purpose obligations even if they have exercised reasonable skill and care in carrying out their services. 

 

·         EXAMPLE: This may be relevant to the cancer center appointment if the client request in the architects appointment any more arduous conditions that exercising reasonable skill and care in the deliver of their obligations under contract.  The architect should ensure that a contract with this condition is never signed as many PII policies will not cover an obligations to ensure that the services provided are fit for the purpose that the client requires.

 

·         In contrast to this, it could be forseen that the appointed Contractor for the cancer center may sign up to expressed terms within the construction contract requiring them to deliver a building which is fit for purpose.

Copyright

·         Copyright is rights to protect intellectual property, and can be used to prevent another person copying an original work. It applies to ‘work’ not to ideas. The right is given by the Copyright Designs and Patents Act 1988

·         In the case of an architectural design, the copyright will reside with the architect who created it. However, where an architect is an employee, is is often a condition of the employment agreement that firm will have the right to any work that is produced while under employment

·         Copyright will remain with the creator not with the client, unless the appointment agreement states otherwise. RIBA Standard Form of Agreement gives the client a license to use the design for the purposes it was intended provided that it relates to the site, and provided that any fees due have been paid.

 

Professional Negligence

 

Under Contract Law – Self imposed by contract

·         An architect can be sued for professional negligence under contract law – ie breach the contract if an architect does not preform their role under the contract using reasonable skill and care of a like professional.  The liability period for professional negligence claims is 6 years from the breach of contract for standard contracts and 12 years if the contract was executed as a deed.

 

Under Tort Law – Imposed by law due to existence of duty of care

·         As a professional, an Architect has a duty of care not to harm other parties by to exercising reasonable skill, care, and diligence in accordance with the normal standards of the Architects profession in the performance of their design work.  If an Architect fails perform in this way, they will also have acted negligently.  The liability period for claims made for professional negligence under Tort law is 6 years from the time the negligence act happened.

 

·         A architect also has a duty to inform the client of progress in the performance of the services and of any issue that may materially affect the Brief, the Construction Cost, the Timetable, or the quality of the project.

 

·         As part of the RIBA (guidance note 5) and ARB Code of Conduct (standard 8), all Architects entering into services agreements must maintain an appropriate level of PI insurance to protect against the risk of professional negligence.  The level of PI insurance must match or be greater than the level of liability the Architect agrees to in the appointment.

 

·         In the RIBA standard Conditions 2010 standard Clause 7.4 addressed the need for PI insurance.

 

 

·         EXAMPLE: Professional Negligence should be a important consideration relevant to the cancer treatment appointment.  PII cover is a requirements of the ARB Architects code, the RIBA professional code of conduct and RIBA Chartered Eligibility criteria. It is extremely important in the appointment contract that the level of indemnity matches the level of Professional Indemnity Insurance taken out.  If this project is larger or more technically changeling than previous commissions undertaken by the firm, it is important that the firm notifies their insurance company of the new job to ensure that the firm is protected for any possible breaches in contract or claims associated with professional negligence.

 

 

Professional Indemnity Insurance

 

·         PII is the vital final element that will provide protection for the architect when all the other risk management procedures have failed to prevent a claim arising.  PII indemnifies the architect, protecting them in relation to the financial consequences of claims by others.  PII cover is a requirement of the ARB Architects code, the RIBA professional code of conduct and RIBA Chartered Eligibility criteria. It is extremely important in the appointment contract that the level of indemnity matches the level of Professional Indemnity Insurance taken out.

 

·         The architecture firm must also ensure that the any sub-contractors have adequate PII cover which should be included in their appointment contracts.

 

Example: The level of PII cover that the Architecture firm holds may be relevant to the Cancer Treatment Center.  If the firm has been struggling over recent years due to the recession,  recent commissions may have been relatively small in scale compared to the potential Cancer Treatment Center commission.  If this is the case, the firm must ensure that there insurer is aware of the larger value (or more complex) work about to be undertaken and check that the level of indemnity in the terms of their appointment matches the level of Indemnity Insurance taken out to avoid potential non cover in the unlikely event of action taken under negligence. 

Collateral Warrenties

 

·         Due to privity of contract, only parties to a contract are bound by its terms.  This means that the terms of the contract can not generally be enforced by or against someone who is not party to it. Construction projects often require a network of Collateral Warrenties to be put in place, which extend terms set out in a contract to third parties who have a vested interest in successful execution of the contract.

 

·         A Collateral Warrenty is affectively a separate contract between the relevant member of the project team and an third party (for example 3^rd party funder) including them the same rights to make claims under the contract.

 

·         In architectural appointments, Architects should avoid collateral warranties where possible and if required should never agree to greater liability under the collateral warranty than in their appointment in scope, quantum or duration.

 

·         Similar to the effects of a Collateral Warrenty, another way that the terms of a contract can be passed on to a third party not privy to the original contract is through a specific term written into the contract which has been allowed through the Contracts (Rights of Third Parties) Act 1999.  This Act allows for the naming of a group or specified third parties which the terms of the agreement are extended to. However, this act has to be included into the contract terms and is not a universal right.  Many contracts exclude the Act, for example the RIBA Standard Conditions of Appointment (clause 7.8)

 

·         A typical example would be where an architect of a new office development owes a duty of care to an occupier of the development in so far as any subsequent defects which may arise are concerned. Privity of contract rules would prevent any liability arising between the architect and occupier without the existence of a collateral warranty.

 

 

Net Contribution Clause

 

·         It is not unusual in construction for more that one party to be responsible for a issue causing a breach to the contract.  Under common law, both parties that have breached the contract are jointly and severally liable for the loss or damage that flows from this breach.  This means that the claimant can pursue the parties at fault either jointly or individually for damages, meaning that each party at fault will be liable to pay full damages if the claimant choses to pursue just one of the parties in breach.  That party would then need to take out further legal action to gain back the proportion of damage from the other party. 

 

·         The amount that can be recovered from one party can be limited by a net contribution clause. This restricts liability to the amount for which the party being pursued is responsible. Other amounts must be recovered from the other parties. Net contribution clauses assume that parties responsible for the same loss or damage are all contractually liable to the other party to the contract, and that they have paid the share that they would have been apportioned under common law.

 

Section 106 Agreements

 

·         Section 106 of the Town and Country Planning Act

·         Planning obligations (also known as Section 106 Agreements or 'planning gain') are obligations attached to land that is the subject of a planning permission.

·         Used to mitigate or compensate for the negative impacts of a development or to prescribe the nature of a development.

·         Make acceptable developments which would otherwise be unacceptable. Because they apply to the land not the applicant, planning obligations transfer with the land to future owners of the site.

 

·         Example As the project is significant, and the local council has already indicated that they may have some requirements for additional public open space, it is likely that a Section 106 Agreement (TCPA 1990) will also be required.  This will involve considerable negotiation over the social betterment provisions that the local authority will require as a result of approving the proposal and the Community Infrastructure Levy will also be relevant

 

Building Regulations + Control

 

·         Under the Building Act 1984, building control has been delegated as a function to the local authorities, through either building controlled officers or approved inspectors.

·         They are delegated to make sure buildings which fall under the Act are in line with this legislation and the Building Regulations 2010.

·         The building Regulations 2010 is a form of Building Approval Legislation. The documents exist to secure the safety, sustainability and durability of design.  They also check the suitability of building methods and materials used.

 

·         EXAMPLE: When planning the internal layout of the large new-build office building, it was important that fire safety should be considered to coincide with Part B of the Building Regs 2010.  Part B1 says that the building shall be designed and constructed so that there are appropriate provisions for the early warning of fires and appropriate means of escape from the building to a place of safety.

 

Novation

 

·         A novation is a three-way agreement made by the original employer, an incoming employer and the architect (or other service provided) under which the architect appointment is transferred from the original employer to the new employer so that after the novation the architect carries out their duties for the benefit of the new employment and is paid by the new employer.  This is usually undertaken through a deed of novation.

 

·         Example: This is relevant to the Cancer Treatment Center appointment, especially if the client chooses a Design and Build procurement route.  If the architect is aware that this procurement route is favourable to the client, they should ensure that the terms of the novation are discussed and agreed to at the outset, and what the terms of any on-going agreement to provide service to the client will be.  There are two types of novation – a basic switch from client to contractor and a “ab initio” where the new employer is deemed to have been the architect client from the outset.  The second type of novation should be avoided.  If there is a significant risk that the party to whom the architect will be novated does not have a sufficiently strong financial covenant to pay the architects fees then the architect should not go through with the novation.

 

Letter of Intent

 

·         A letter of intent covers a broad range of agreements between parties, with varying degrees of formality. 

·         Although often considered a mechanism for getting the ball rolling by outlining the initial works and key terms (for example, perhaps fee and timing), a letter of intent typically lacks the weighting of a properly settled contract with agreed appointment terms. 

·         Depending on the content of the letter of intent it is difficult to know in advance what interpretation a court would give to such a document if a dispute based solely on a letter of intent was to arise. 

·         Therefore, the primary disadvantage over a formal appointment contract is their unpredictability and if used when time is of the issue, should always be followed up with a formal appointment contract.

 

·         ARB Code of Conduct Standard 4 – Competent management of your business, address the need for a formal services agreement.

 

·         RIBA Code of Professional conduct Guidance note 4 addresses the importance of formal agreement.

 

·         EXAMPLE: may be that a client is desperate for the architect to preform a feasibility study on a site which is going to auction in a weeks time.  In this case, due to time restraints, a letter of intent might be sent to the client to outline the fee structure and the time structure for the first stage of the works with a view to agree a formal architectural appointment at a later date.  This is in the understanding that the urgency to start the feasibility study outweighs the risk of losing the job and project to both client and architect

 

 

Building notice

·         On small projects, or when changes are made to an existing building, approval may be sought by giving a 'building notice'. In this case, a building inspector will approve the works as they are carried out by a process of inspection.

·         A building notice application can be made with a simple application form, a site plan (if an extension is involved) and the appropriate fee (calculations may also be required for certain aspects depending on the complexity of the project). This means that work can begin very quickly, and need not necessarily involve design consultants.

·         However, a building notice application leaves the client at risk that completed works might not be approved, resulting in remedial costs.

 

Full plans submission

·         Generally on larger, new-build projects, a 'full plans' application will be made, meaning that full details of the proposed building works are submitted for approval before the works are carried out.

·         Full plans approvals are also subject to inspection during the course of the works, but as long as the work is carried out in accordance with the approved design, the risk of problems is very much lower than for a building notice application.

 

 

Bespoke Agreements

 

Issues:

·         Choice to use them is matter of professional principle, commercial judgement and negotiating skills

·         Need to obtain legal advice and consult PII broker, which costs time and money

·         Need to check terms that we are signing up for a duty of care, not fitness for purpose

·         Need to check terms for collateral warranties

·         Payment provisions

·         Copy right

·         Termination

·         Disputes

·         Contraction Act should apply as long as it is not a consumer client.

 

 

The legal characteristics of a contract.

 

Agreement – Offer and Acceptance

Intention – that it will be binding

Consideration – Each party gets something from the promise.

 

·         A contract is a promise, or a set of promises which the law will enforce.  The terms or the contract are only enforceable to the parties privy to that contract.  The first essential element of a contract is the presents of an agreement (offer and acceptance).  There must be an offer by one party and an acceptance of that offer by the other party.  There also needs to be an intention that the agreement shall have legal consequences.  Finally, there needs to be some form of Consideration.  This means that each party must give something, or a promise to give something, in return for the other’s act of promise.

 

·         Although the offer could be made Orally, written or by contract, both the RIBA and ARB code of conduct require architect appointment to be in writing to make clear the terms mitigating risk for disputes.

 

·         Example: In relation to the student hub, the architect have a formal appointment contract in place before design work progresses.  The architect should promote the use of the RIBA Standard Form of Contract for this, however, as the client is experienced in the building industry but not necessary in the UK, they could expect push for the client the use of their own bespoke contract.  Regardless of the terms, within the agreement should include the offer and acceptance of architectural works,  an intention that the agreement shall have legal consequences, and consideration ie. Outline the fee that the client will pay in return for the architectural services.