|
|
Tenders - Are disclaimers effective? |
Businesses inviting tenders for construction projects often have to decide how much information to provide about latent conditions and how much site access to allow. |
Frequently, reference documents, technical drawings, plans and geotechnical and environmental surveys are provided to assist in tender preparation. This information is normally supplied with a disclaimer by the principal of the business that tenderers must satisfy themselves of the accuracy of the information. |
In a recent case, a contractor who won a contract for the excavation of materials at a quarry found that the natural surface level at the site differed from the excavation plan included in the tender documents, and the company faxed a latent condition notification, claiming almost $7 million in additional costs because of the materially different physical conditions of the work. |
The contract provided that latent conditions are those not associated with physical conditions or characteristics of the site which have been identified or could have reasonably been expected to exist from site investigation. |
The principal was not able to point to any particular fact or matter in the information they supplied "which would cause a non-expert in the position of a contractor to seek the assistance of a geotechnical engineer". |
The courts confirmed that the test to determine whether a contractor should be entitled to claim for a latent condition is what "a reasonably competent contractor" should expect to encounter. It decided the contractor could not have been expected to investigate further, and that the disclaimers made by the principal did not succeed in avoiding liability for the latent condition. |
