1. Introduction
We remind you of the fundamental difference between execution and turnkey contracts.
The general rule and starting point of turnkey contracts is that the total subcontractor shall design the detailed design, while it is the general contractor who has the risk of the detailed design in the execution centres.
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 subcontractor must do regardless of the form of the contract. As an example, mention is made of the use of construction detail sheets from SINTEF Byggforsk to ensure, for example, that studs are built with proper spacing, to ensure that tiles are laid expertly or the use of the manufacturer's instructions for exhaust cuffs in wet rooms.
Such planning of own works applies to any contractor, and regardless of whether the contract is based on NS 8417, NS 8415 or NS 8416.
3. Total subcontractor's detailed design
In total subcontracting, there are the provisions of NS 8417 paragraph 16 “Engineering, consulting, etc.” which comes into use.
In point 16.1 “Engineering” it is established that the general subcontractor 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 of paragraph 14 dealing with the subject matter of the contract, and which we have dealt with in a separate article, read here.
From this we repeat that the detailed design should lead to a result that is in accordance with the agreement, it should fit the purpose of the builder, cf. NS 8417 paragraph 14.3, comply with the law, regulations, public decisions, as well as comply with generally accepted norms.
Examples of the latter include building detail magazines from SINTEF Byggforsk, manuals published by SINTEF, etc.
Note that the general contractor has the obligation to notify the general subcontractor “without undue residence” if he “becomes aware that the design (...) is not in accordance with the contract”, cf NS 8417 paragraph 20.3, second paragraph.
Often, the general contractor will not have detailed knowledge of all subjects and what solutions can be used to produce the contract subject according to agreement.
The general contractor therefore relies on professional input from several sides. Firstly, from hired consultants who design, but also from the total subcontractors who often have a considerable degree of technical insight about their own subject.
Accordingly, the general subcontractor has a duty of guidance to the general contractor, but this obligation is limited to the extent that “conditions dictate” this, see NS 8417 paragraph 16.2.
However, what the conditions might suggest will depend on a number of factors.
The general contractor is professional, normally has extensive experience and a large apparatus to handle such projects the contract applies to. For this reason, the duty of guidance will probably not be 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.
4. Total subcontractor's responsibility to obtain public permits
In NS 8417, paragraph 16.3 “Public Permits” is there a separate provision for obtaining public permits.
Normally, it will be the general contractor who seeks, and obtains, all government permits necessary to execute and then adopt the subject matter of the contract.
The total subcontractor's contribution will essentially be to submit the documentation necessary for the general subcontractor to be entitled to liability.
The application process itself is handled by the responsible applicant who is either the general contractor himself or a co-contractor thereof.
When the general subcontractor has completed his works to a sufficient extent that a temporary use permit and a certificate of completion for the works of the general subcontractor can be applied for, respectively, he must provide the documentation required for the general contractor to submit an application for this.
5. Subcontractor's detailed design when agreed
It follows from NS 8415, paragraph 13.1, that a subcontractor shall only design detailed projects where this has been specifically agreed.
How this duty is expressed may vary.
It may be expressly stated in the contract of the parties, but may also appear in other ways. If the description only specifies specific functional requirements that require detailed design, it will depend on an interpretation whether the subcontractor is obliged to design details or not.
NS 8416 does not have a corresponding provision.
The only place where we find anything about the subcontractor's engineering in NS 8416 is item 15. This provision imposes on the general contractor a “Notification obligation in the design of the subcontractor” if “he becomes aware” that subcontractor “the design is unsuitable, indefensible, incomplete or contains inconsistencies or errors that may cause the work to not be in accordance with what has been agreed”.
For the record, it is mentioned that the general contractor has a corresponding notification obligation when the contract is regulated by NS 8415, cf. clause 13.2.
6. Consequences of misengineering
In general subcontracting contracts, one does not normally distinguish between errors in design and errors in execution since the starting point is that the general subcontractor is responsible (if it has the risk) for both activities
The total subcontractor is objectively liable for deficiencies and without regard to what is the cause of the incorrect result.
In contracts based on NS 8415, the starting point is the opposite since the general contractor has the risk of (the builder's) engineering vis-à-vis the subcontractor.
Accordingly, it is only when the works have been carried out in violation of the design that there is a deficiency in the works of the subcontractor.
Since the subcontractor may be required to carry out detailed design, clause 13.1, third paragraph of NS 8415 specifies that defects in the subject matter of the contract that can be returned to the subcontractor's design shall be considered as a defect, and treated accordingly.
If the error is detected during the design stage, the subcontractor has “liability for all additional costs arising from errors and inconsistencies in its engineering”.
We cannot see that NS 8416 contains a corresponding specification, but the solution will probably be the same if the subcontractor designs in detail.
7. What is the consequence of the builder or general contractor discovering a fault but failing to notify?
In NS 8415 paragraph 13.2, third paragraph, it is established that if the main contractor “becomes aware that (...) the design is unsuitable, incomplete, contains inconsistencies or errors that may result in the work” becomes defective, or that the design as such is indefensible, the responsibility of the subcontractor may “is reduced or” This will not be the case if the main contractor fails to notify.
NS 8416 lacks such a provision, but we believe that one can go a long way in interpreting the provision set out in NS 8415 if it can be shown that the main contractor was aware of such errors without giving notice.
From NS 8417 paragraph 20.3, second paragraph, it is stated that if the general contractor becomes “noting that the design (...) is not in accordance with the contract, he shall notify without undue delay” Total subcontractor.
If the general contractor does not notify”shall he be liable for the effects which would have been avoided on timely notice”.
