Fitness for Purpose Clause: Everything You Need to Know
A fitness for purpose clause is often found in construction contracts, although it can be used in any type of contractual agreement.3 min read
A fitness for purpose clause is often found in construction contracts, although it can be used in any type of contractual agreement. The term “fitness for purpose” refers to a product or service that is not working as intended or expected.
As with any type of contract, and all of the terms and conditions that exist within the document, it is important that all parties involved be aware of any fitness for purpose clauses that may be included in the contract, and the expectations thereof; the point of a fitness for purpose clause is to impose further duties or obligations. The following circumstances are the ones in which the law generally uses the term fitness for purpose:
- Construction and engineering
- Goods; material products
For example, if you are a contractor working with a client on a project and there is a warranty place, then you will be held to that obligation. Furthermore, if, for whatever reason, it ends up not being able to be utilized to the client’s wishes, the reasons as to why will not matter, insofar as the fitness for purpose clause is concerned. Essentially, even matters that may be out of your hands, as a contractor, will not alleviate your burden of responsibility.
As a result, you may end up being held to unreasonable, or even impossible, expectations, should a fitness for purpose clause exist in your contract. The client does not need to necessarily provide evidence of negligence, rather all they need to do is demonstrate that they are unable to use the building, design, product, etc., for its intended purpose.
An example of this may be if you are contracted to build an office building with an elevator. After installation and completion, the elevator may shake a bit as it is going up and down between floors. While the elevator may be completely safe, all the client would have to do is prove that it shakes when in use. Your responsibility, as the contractor, is to demonstrate that while the blueprints absolutely adhere to the client’s expectations, the elevator itself was not constructed to certain specifications.
The issue, however, is that it can be argued that any skilled and reputable architect or contractor would have been able to foresee that the elevator would shake, and with the existence of a fitness for purpose clause, any argument made by the contractor would probably not hold much weight.
Additionally, should you be contracted to build a distillery intended on producing 2,000 liters of whiskey per day, and instead, only 1,000 liters are produced, then again, you could be in violation of your contract’s fitness purpose clause.
Goods and Materials
When it comes to a fitness for purpose clause as it pertains to the creation of goods and materials, the clause is generally implied, unless previously stated and agreed upon by all involved parties. As such, if you are creating or manufacturing a product for a client or customer, then it is assumed that the finished product will be able to be used for the client’s intended purpose, even without the existence of a fitness for purpose clause written into the contract. To further ensure this, the Sales Good Act of 1979 even stipulates this.
Construction and Engineering
Meanwhile, with construction and engineering contracts, a fitness for purpose clause is not necessarily implied as it is with manufacturing contracts. Instead, in the absence of such a clause, it is assumed that the customer or client is trusting the contractor’s experience and expertise in designing and constructing a building or space that will be able to be used for the client’s wishes. As such, it is crucial that the client be clear as to any and all ways in which they may intend the space to be used, and equally critical that all parties involved are clear on the intended use(s).
Should there end up being confusion or conflict later on as to whether or not the building or space was constructed to the clients intended wishes, the matter will often be settled by the courts or an arbitrator, who will consider the terms and conditions of the contract, along with the completed construction.
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