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Continuing with our systematic analysis of MF/1, we turn now to the role of the Engineer as set out in Section 2 of the MF/1 Contract. As we might expect, the Engineer’s duties include “issuing certificates, decisions, instructions and orders as are specified in the Contract” (clause 2.1). Crucially, however, that the Engineer “shall” carry out these duties makes it a potential breach of contract if he does not, for which the Purchaser is liable. That said, under MF/1, the Contractor’s remedies are limited to any damages or losses suffered exclusively under the Contract (see clause 44.4 “exclusive remedies”– of which more in a later blog). This limits the scope of the Contractor’s remedies much more than in other industry standard construction contracts.
Another quirk of the MF/1 is that clause 2.1 also requires the Engineer to obtain “prior specific approval” from the Purchaser before exercising any their duties under the Contract, provided such specific duties are listed in the Appendix. This is not only unusual but also vague because the clause does not directly tell us whether the Contractor has to ascertain whether the Engineer has indeed obtained such approval before acting on the Engineer’s instructions. Is the Contractor entitled to assume such approval has been obtained? Probably, otherwise the Contractor’s works would take twice as long as planned! Moreover, prior approval is implied by clause 2.4 which states that the Contractor “shall proceed with the Contract in accordance with the decisions, instructions and orders given by the Engineer”.
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