1. Introduction

We remind you of the fundamental difference between execution and turnkey contracts.

The main rule and starting point of turnkey contracts is that the contractor designs in detail, while it is the builder who designs the details in the execution centers.

2. Detailed design versus planning of own execution

Before we begin our review of the rules on detail design, it is important to make a key point. There is a difference between the detailed design that must be done to ensure that functional requirements are met, and the general planning of own works that a contractor must do completely regardless of the form of the contract. Examples of the latter include the use of construction detail sheets from SINTEF Byggforsk to ensure that, for example, studs are built with proper spacing, how tiles should be laid on a wall to ensure good workmanship or the use of cuffs in a wet room. Such planning of own works is not covered by what we are going to describe here.

3. Overview of the rules

NS 8407 naturally contains more and more detailed provisions than NS 8405.

In addition to the one provision (13.1) of NS 8405, NS 8405 also contains provisions (13.2) on the obligation of the builder to notify if he sees errors etc in the contractor's design in NS 8405 contracts.

We address that provision in paragraph 8 below.

4. General contractor's detailed design

In turnkey contracts, there are the provisions of NS 8407 paragraph 16 “Engineering, consulting, etc.” which comes into use.

In point 16.1 “Engineering” it is established that the general contractor shall, unless otherwise agreed, “provide all necessary engineering to be able to deliver” its work in accordance with the agreement concluded with the general contractor.

Paragraph 16.1 refers to the rules in paragraph 14 dealing with the subject matter of the contract, and which we have dealt with in a separate article.

From this we reiterate that the detailed design should lead to a result that is in accordance with the agreement, it must fit the builder's purpose for its procurement, be in accordance with law, regulations, public decisions, Norwegian Standard and generally accepted norms.

Examples of the latter include building detail magazines from SINTEF Byggforsk, manuals published by SINTEF, etc.

Note that the builder has a duty to notify the general contractor “without undue residence” if he discovers inconsistencies between the general contractor's design and what has been agreed, cf. NS 8407 paragraph 20.3, second paragraph.

Often the builder will not have detailed knowledge of all subjects and what solutions can be used to produce the contract object according to agreement.

The developer will therefore be dependent on professional input from several quarters. Primarily from the general contractor since it is he who sits with the design team and other contract assistants such as total subcontractors in the technical fields.

Consequently, the general contractor has a duty of guidance to the builder. However, this duty is limited to the extent “conditions dictate” this, see NS 8407, paragraph 16.2.

However, what the conditions might suggest will depend on a number of factors.

If the builder is a professional multi-stage builder with a large apparatus to handle such a project the contract applies, the duty of guidance will probably not be very extensive.

It is different if the builder is unroutine, builds for the first (and perhaps last) time and openly expresses a need for, and confidence in, the specialist expertise of the general contractor.

On the other hand, an untrained builder could also have engaged his own advisors to follow up the project and the general contractor. If so, it would suggest that the duty of guidance is not very extensive.

A question about the scope of the duty of guidance will presumably be something that is asked retrospectively, and presumably because the parties are in a conflict.

If the question is to be dealt with by a court, it will have to make an overall assessment of how many points will be relevant. It is probably better if the parties are a little forward while the project is in progress so as to avoid disputes as much as possible.

5. Responsibility of the General Contractor to Obtain Public Permits

In NS 8407, paragraph 16.3 “Public Permits” is there a separate provision on the obligation of the general contractor to obtain public permits.

Most often, the builder will have already applied for, and received, a frame permit when contracting. For the record, it is mentioned that an application for a framework permit does not require detailed design.

When a general contractor is contracted, it assumes responsibility and risks for obtaining additional permits.

It follows from the Planning and Building Act with regulations (SAK 10) that the authorities' contact with the holder of the measure shall take place via the responsible applicant. Whether the general contractor retains the role of responsible applicant or assigns this to, for example, the architect is not important. In both cases, it is the general contractor who is responsible to the builder.

When the general contractor is contracted, the work begins with the detailed design of the individual construction stages. Often both the design and commissioning of physical works are arranged in such a way that there are many stages of construction. For each stage of construction, there will often be separate applications for a commissioning permit, and this will be submitted by the general contractor.

These may be applications for IG for ground works, for concrete works below ground, for equivalent above ground, for raw buildings, for infrastructure, etc. If the project consists of several individual buildings, it is not uncommon for each building to be re-examined separately.

In this way, the general contractor achieves flexibility by being able to design details at the same time as the construction.

When the general contractor has completed his contract works, a temporary use permit and a certificate of completion must be applied for respectively.

As a starting point, the developer is not obliged to take over until there is a permit from the planning and building authorities.

6. Main contractor's detailed design when agreed

It follows from NS 8405 paragraph 13.1 that a general contractor only projects in detail when this has been specifically agreed.

However, how this duty is expressed may vary.

The contract of the parties may be explicit about this, but it may also appear more indirectly from the description. If it is clear from the description that the general contractor must meet a specific functional requirement without the presence of detailed design, it may indicate that the contractor is to design details.

However, it may be due to an oversight on the part of the builder so that it is the builder who has to design details, but an interpretation result can also result in the general contractor having to design details.

NS 8406 does not contain a corresponding provision. On the other hand, NS 8406 paragraph 15 states that the builder is obliged to notify the contractor if he discovers that the contractor's design is “unsuitable, indefensible, incomplete or” of such a nature that the works will not be as agreed. A similar provision is found in NS 8405, see paragraph 13.2.

In any case, it must be said that NS 8405 and NS 8406 contain far fewer provisions on contractor engineering than NS 8407. It may not be so strange since the main rule is that the builder projects.

7. Consequences of misengineering

Turnkey contracts do not distinguish between errors in design and errors in execution. The general contractor has responsibility and risk for both parts, and is therefore liable for the defects and defects uncovered during the construction without having to take into account what is the cause of the defect.

In contracts based on NS 8405 this becomes different since the starting point is that the builder projects. If the execution is in accordance with the builder's retail design, but otherwise contrary to the builder's purpose, there is no deficiency in the contractor's works.

It is different if the main contractor has carried out detailed design as part of the fulfillment of his contractual obligations. In that case, it follows from NS 8405 paragraph 13.1, third paragraph, that defects in the subject-matter of the contract are treated in the same way as for turnkey contracts. Then it does not matter whether the fault lies in the design or in the execution. There is then a deficiency and it must be dealt with according to the provisions of the standard contract on the management of defects.

8. What is the consequence of the builder or contractor discovering a fault but failing to notify?

It follows from NS 8405 paragraph 13.2, third paragraph, that the builder is obliged to notify the main contractor if he discovers that the design will lead to an incorrect result, or is indefensible.

If the developer fails to notify, the consequence may be that the general contractor's liability falls away completely or may be reduced.

NS 8406 lacks such a provision, but we believe that one can go a long way in interpreting the provision set out in NS 8405 if it can be shown that the builder was aware of such defects without giving notice.

The builder has a corresponding notification obligation in total tree prices, cf. NS 8407 paragraph 20.3, second paragraph.

It must be notified “without undue delay” and the consequence of failure to notify is that the builder is liable for the effects that could have been avoided had he notified.

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