Chapter 24 Fitness for purpose terms in consultancy agreements

Consultancy agreements are a subset of service contracts. The general principles set out in this chapter apply to consultancy agreements including that fitness for purpose terms may be express, implied by common law or implied by statute.

It is not uncommon for consultants to seek to delete or amend express fitness for purpose warranties when negotiating consultancy agreements.

There is authority however for fitness for purpose terms to be implied by common law in consultancy agreements. The ultimate question will be the role played by the consultant in the overall project.

CASE STUDY

Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners  [1975] 3 All ER 99

Facts
  • A company employed building contractors to construct a warehouse which would serve as storage for oil drums.
  • The building contractors employed a firm of consultant structural engineers to design the structure of the warehouse.
  • The building contractors made known to the consultants that the first floor would have to take the weight of loaded forklift trucks moving to and fro.
  • The warehouse was built in accordance with the structural engineer’s design.
  • After completion, the floor cracked and became dangerous.
Result
  • The court found that there was a common intention of the parties that the consultants should design a warehouse which would be fit for the purpose for which it was required.
  • The court implied into the agreement an ‘absolute warranty’ that the design would be fit for its intended purpose.
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