Guide to Using the RIBA Professional Services Contracts 2018 - Other - Page 50
Contract terms
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Such circumstances may include:
• Where the Architect/Consultant performs Services relating to works, installation
or equipment, for which the cost is not included in the Contract Sum for the
building works
• Where the Architect/Consultant is required to vary any item of work already
started or completed or to provide a new design after the Client has approved
the design, or part of the design
• Where the nature of the Project requires that substantial parts of the design
cannot be completed or must be specified provisionally or approximately before
construction commences
• In the event that the performance of the Services is delayed, disrupted or
prolonged for matters outside the Architect/Consultant’s control.
However, should any change arise as a result of any actions by the Architect/
Consultant which are in breach of the Contract or the Services then there is no
entitlement to additional fees.
Where percentage fees apply, the Architect/Consultant could potentially suffer
loss of fees as a result of reductions in the value of the works. This can arise from a
number of reasons such as a fall in the market or the Client decides to reduce the
scope of the works for budgetary reasons. Assuming the Architect/Consultant has
already carried out the work, under the Contract they will be entitled to compensation
for the reduction of the Construction Cost arising solely from matters not prevailing at
the date of the Contract.
A common scenario is where the Architect/Consultant meets the design brief
to the satisfaction of the Client, but the tender costs are higher than the budget
and it is more than the Client can afford. If the project is to proceed to site, cost
savings will need to be made which, in theory, would reduce the amount of the fee
if the percentage fee is based on the reduced cost. Not only might the Architect/
Consultant have to change the documents and drawings, but also will have done
abortive work which would not be reflected in the reduced fee. In such cases,
the Architect/Consultant should invoice the Client for the agreed percentage of
the fee stage up to the receipt of tenders based on the higher (tender) cost and
subsequently charge the Client invoices based on the reduced figure/final contract
sum with revisions time-charged.
Although the Architect/Consultant should always design the project with due regard
to the Brief and the Construction Cost, when considering charging for additional
fees where tenders are returned that are more than the Client can afford, the
Architect/Consultant should be mindful of whether this may be due to their own
negligence – see Riva Properties Ltd & Others v Foster + Partners Ltd [2017] EWHC
2574 [TCC] where the architect was found negligent in preparing a design without
reference to its Client’s stated budget.
Similarly, where a tender or tenders are invited for work or services in connection
with the Project, but no tender is submitted or accepted, the Architect/Consultant
is entitled to fees due up to and including the receipt of tenders based on the
construction work or that part of it relating to the work or services current at the date
of tender.
To allow for larger projects covering a long timeframe, the Contract enables the
charge-out rates to be increased every 12 months commencing on the anniversary
of the date of the signature of the Contract. This includes lump sums and rates
for time charges, mileage and printing which shall be revised in accordance with
changes in the Consumer Prices Index. The Consumer Price Index is the rate of
increase in prices for goods and services produced by the Office for National
Statistics (www.ons.gov.uk/economy/inflationandpriceindices). This measures
inflation and prices which include consumer price inflation, producer price inflation,
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