R I A I Clauses

R I A I CLAUSES
As I endeavour to answer this question comprehensively, it would be

remiss of me not to mention the fact that all of the Clauses in the
RIAI Contract are important but there are three Clauses in particular
that are of more importance than the others. These are the Bill of
Quantities Clause, The Insurance Clauses(s), and The Collateral
Agreement Clause.
Briefly, a Standard Form Contract is a pre-formulated contract drafted
by an Architect and presented to the other parties most notably the
Contractor, the Employer and the Quantity Surveyor on a “take it or
leave it” basis. This means that the parties must either accept the
terms dictated by the Architect or walk away from the agreement.
Subsequently, for the Architect, there is an advantage in having such
a Contract, as it means that all the members of the Professional Team
(ie The Society Of Chartered Surveyors in the Republic Of Ireland
and the Construction Industry Federation), will work to essentially
have the same terms and conditions.
The role of the Quantity Surveyor is to manage and control costs
within construction projects. The main method of ensuring continuance
of Cost Control is to provide a Bill of Quantities to Contractors for
pricing. This is prepared using a Standard Method Of Measurement
agreed with the Construction Industry Federation.
Significantly, as stipulated in Clause 3 of the RIAI Contract, whether
the Bill Of Quantities forms part of the Contract is important. The
purpose of the inclusion of the Bill Of Quantities Document in the
Articles Of Agreement is that where tenders are sought by Employers,
the cost of tendering is reduced by having these Bills prepared only
once on behalf of the Employer. The document is used as a basis for
valuing the work completed by the Contractor during the Construction
Period for the purpose of Certification and Interim Payments. The Bill
Of Quantities is used at the end of the Contract as a basis for Re-
measurement of the various items of Work Completed (Clause 13
Variations) and for valuing the Final Contract Price.
On the other hand, in the Schedule of Rates or Contract without
Quantities, the tenderer is invited either to Quote a percentage to be
added or deducted from Rates previously entered by the Architect or
to enter their own Rates to the various items of the Schedule. In
addition, the tenderer must bear any loss which might result from
differences in the bill and in the actual work carried out.
The Architect in accordance with his/her “Duty Of Care” Principle
imposes Seven Insurance Clause(s) specifically dedicated to the
Insurance of Property and People. A breach of a duty of care owed
by one person to another in the Law of Tort is known as Negligence.
One well known case is Donoghue v Stevenson (1932), where Mrs.
Donoghue sued for damages after drinking a decontaminated bottle of
ginger beer manufactured by Mr. Stevenson. The Court held that the
manufacturer had prepared the product in such a way as to show that
he intended it to reach the ultimate consumer in the form in which it
left him. He could reasonably foresee that somebody other than the
original purchaser might consume the product and so was held liable
to the Plaintiff.
It is in this context of “Liability” that the Architect in imposing the
Insurance Clauses has to allocate the risk to the main protagonists
within this contractual paradigm.
Liability Insurance involves being insured against a liability that the
insured may incur, most typically perhaps third-party insurance that
owners of motor vehicles take out to cover accidents on the roads.
This is the quintessential form of indemnity.
Employers have an implied contractual duty as well as an obligation
in the law of tort and statutory duties to safeguard the health and
safety of their employees, which is the basis for Employers’ Liability
Insurance. It is the Contractors’ responsibility to have an Employers’
Liability Policy (Clause 23), in addition to a Contractors’ All Risk
Insurance (Clause 22). This is a Property Insurance and mainly
provides protection to “the works” and any materials, machinery and
equipment connected with it.
The Contractor responsibility also extends to the provision of Public
Liability Insurance (Clause 21(a)), this insurance applies to third
parties who are not party to the Insurance Contract.
Probably the most contentious of all the Insurance Clause(s) is the
Damage due to Design Clause. Evidently there is no requirement for
the Contractor to be insured against Liability for Defective Design, but
it is recommended in any contract where there is a design input on
the part of the Contractor that a separate policy be taken out by the
Contractor to cover the risk. This policy would be similar to the
Professional Indemnity policy of the Architect. Even more interesting
is the fact that Damage Due to Design on the part of the professional
team is not relevant to the contract, and would be a matter for the
contracts drawn up between the Employer and the Architect, and any
other professional advisors who might be involved.
Finally, the Collateral Warranty Clause (Clause 37), is significant
because prior to the Norta Case (1983) the Employer had no privity
of Contract with the Sub-Contractor, that is he had no contractual
relationship with him, so it is essential that the Employer be protected
if a default occurs, and that the Employer be entitled to recover any
loss from the Contractor.
The facts of the Norta Case were Norta Wallpapers engaged Sisks to
build a factory. Before Sisks had been appointed, a specialist roofing
firm (Hoesch) had tendered for the design and supply of the roof, and
when Sisks were appointed as Contractors, they were instructed to
employ Hoesch as Nominated Sub-Contractors. Leaks developed in the
roof, and the matter went to arbitration. The Supreme Court held that
the Contractor was liable to the Employer for the defective
workmanship and materials of the Nominated Sub-Contractor.
The Collateral Agreement is a contractual link between the employer
and the sub-contractor , its purpose is to take the employer’s
entitlements under the RIAI Contract and extend that protection to
third parties ie. Nominated Sub-Contractors.
The Nominated Sub-Contractor under the Agreement undertakes to
perform his work in a manner set out in the Agreement, also the
Architect ensures that the Agreement is bonded or guaranteed which
can prove very useful if the main Contractor goes into liquidation.

R I A I Clauses

Uploaded by

Copyright:

Available Formats

R I A I Clauses

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

R I A I Clauses

Uploaded by

Copyright:

Available Formats

R I A I CLAUSES

As I endeavour to answer this question comprehensively, it would be

You might also like