Interpreting existing structure clauses - who takes the risk?

In the recent Technology and Construction Court (TCC) judgment of John Sisk and Son Limited and Capital & Centric (C&C)(Rose) Limited [2025] EWHC 594, His Honour Judge Stephen Davies considered the principles of contractual interpretation.

In the recent Technology and Construction Court (TCC) judgment of John Sisk and Son Limited and Capital & Centric (C&C) (Rose) Limited [2025] EWHC 594, His Honour Judge (HHJ) Stephen Davies considered the principles of contractual interpretation.

The Part 8 proceedings revolved around the interpretation of clauses pertaining to the risk allocation for existing structures in a JCT Design and Build 2016 contract.

Background

In May 2022, Sisk (the contractor) and C&C (the employer) entered into a JCT Design and Build 2016 contract - extensively amended with bespoke provisions - for the design and construction of substantial works at Weir Mill, Chestergate, Stockport.

A dispute arose between the parties, which was also the subject of an earlier adjudication, as to which party had contractual responsibility for the risks associated with the existing structures on the site, including their ability to support and/or facilitate the proposed works.

Contract provisions

The Court considered clauses 2.42.1 to 2.42.4 of the contract and determined that Sisk was contractually responsible for all risks in relation to the existing site, including the risk in relation to the condition of the existing structures and the risk of any of the pre-contract information provided by C&C being wrong.  The Judge noted that:

1. Clause 2.42.1 clarified that C&C did not warrant or represent the condition of the site or the accuracy of any survey data provided;
2. Clause 2.42.2 noted that Sisk was deemed to have inspected the site and satisfied itself as to the nature of the ground conditions and the existing structures, without entitlement to additional payment or extension of time for any misunderstanding; and
3. Clause 2.42.3 placed the responsibility on Sisk to ensure the suitability of the site and existing structures for the proposed works.

However, clause 2.42.4 provided an exception in that it was expressed to “...be subject to item 2 of the Clarifications” which were defined within the contract as:

“…the clarifications headed “Contract Clarifications” contained within Volume 2, Appendix 2.9 of the Employer’s Requirements”. 

Contract clarifications

The pivotal Contract Clarification was item 2 which indicated that existing structures were an employer risk:

“Sisk Clarifications…Existing Structures Risk including ability to support facilitate proposed works…Sisk additional comments…the Employer is to insure the Existing buildings/works. Employer also to obtain warranty from Arup with regard to the suitability of the proposed works. Employer Risk.” 

Although it was clear that the contract provided a definition of Contract Clarifications, Sisk and C&C disagreed as to what fell within the definition and the documents included therein. The electronic version of the contract contained two clarifications documents: one being a worksheet headed “contract clarifications” and the other being a worksheet headed “tender submission clarifications”. In the paper version of the contract, however, there was only the worksheet headed “contract clarifications”. 

The document headed “contract clarifications” allocated risk to C&C, whereas the position within the “tender submissions clarification” was consistent with the terms of clause 2.42 and showed that Sisk had attempted to divest itself of the risk associated with the existing structures and C&C unequivocally rejected that attempt.

Judgment 

HHJ Davies determined that the risk of the unsuitability of the existing structures, including their ability to support and/or facilitate the proposed works, lay solely with C&C. The decision turned on clause 2.42.4 and the definition of clarifications with HHJ Davies concluding that:

“… the contract definition refers expressly to the clarifications headed ‘contract clarifications’ contained within Volume 2, Appendix 2.9 of the Employer’s Requirements. It is plain in my judgment that this can only be referring to the specific contract clarifications worksheet which is ‘within’ the clarification document, rather than to the whole workbook.” 

The Judge explained that his “…conclusion was reinforced by clause 2.42.4 which refers to ‘item 2 of the clarifications’’. It is obvious from the content of the contract clarifications and the tender submission clarifications that this can only be a reference to item two of the [document headed contract clarifications]”. 

Having determined that the “contract clarifications” document was the relevant document for the purposes of clause 2.42.4, HHJ Davies then considered the meaning of the words “Employer Risk” in item 2 and concluded that:

“…on an objective analysis, [it] could not mean anything other than that the risk associated with the suitability of the existing structures as being accepted by C&C as its contractual risk”.

Comment

It is common for parties when agreeing the terms of the contract to seek to apportion the risks associated with existing structures when carrying out works, but this TCC decision highlights the risk of conflicting drafting or comments that may be included as part of the contract documents (which can sometimes include informal comments and responses). This TCC decision reiterates that the court will interpret contractual terms based on their plain meaning and the contract’s overall structure, rather than any pre-contractual negotiations.

The decision further emphasises that parties must ensure clarity and precision in their contractual agreements to avoid disputes. Here, issue lay with the “contract clarification” document, which was inconsistent with the contract terms. 

Although the case very much turns on its own facts, it highlights the importance of paying close attention to the details within contract documents and careful drafting. The parties may wish to ensure that the contract documents are updated to reflect the agreed position, reducing the need to include documents that track or record the negotiations on the contract documents. This would help to ensure clarity around each party’s obligations and the scope of works to be delivered by the contractor.

The case also demonstrates that the Part 8 procedure offers an effective mechanism to determine discrete points of law that are unlikely to involve a substantial dispute of fact and can be a cost-effective way to reverse an adjudicator’s decision.