Structuring construction contracts: lessons from Sisk v C&C

Construction contracts are increasingly complex, particularly for projects including existing buildings and structures. Common examples include re-cladding and refurbishment projects and developments including listed buildings.

It’s important for a construction contract to clearly document the agreed allocation of risk in the above scenarios – otherwise a party could incur significant unforeseen losses or there might be costly disputes to establish which party bears a particular risk.

In John Sisk and Son Limited v Capital and Centric (Rose) Limited [2025] EWHC 594 (TCC), a dispute arose regarding the allocation of existing structures risk in an extensively-amended JCT Design and Build 2016 contract.

Background

C&C engaged Sisk under an “extensively-amended” JCT Design and Build 2016 Contract in 2022. The Works under the Contract involved the design and build of two new residential buildings and the refurbishment of two listed mills in Stockport (which are adjacent to the River Mersey and are situated under a brick viaduct).

The Contract included clauses that made Sisk responsible for all risks in relation to the site, including the condition of any existing structures. Those clauses, were, however, subject to “item 2 of the Clarifications”.

The electronic and paper version of the Contract included different clarifications documents – both versions included a document called “contract clarifications” and the electronic version also included a document called “tender submission clarifications”.

The contract clarifications included the following row of a table:

The tender submission clarifications included an item numbered 2.1.02 under section 2 (headed “design responsibility”). Some of the comments under that item included “Existing Structures Risk sits with the Employer including insurance” and “Employer to warrant that the structural condition of the existing fabric is suitable to facilitate the new works”.

The parties fell into dispute regarding who was contractually responsible for the risk of existing structures, including their ability to support and/or facilitate the Works.

Sisk issued a Part 8 claim and sought declarations that C&C was responsible for existing structure risk and, if that risk eventuated, it would be entitled to additional time and money under the Contract.

Court’s decision

The court decided that on a proper interpretation of the Contract, C&C was responsible for the risk of existing structures. It made the following points to support its decision:

• The clauses in the Contract regarding site condition (clauses 2.42.1-4) were clear – site conditions risk (including existing structures risk) sat with Sisk, “subject to Clarification 2”.
• “Clarification 2” was a reference to line 2 in the contract clarifications document only (see above) rather than to both of the clarifications documents. That conclusion was reinforced by line 2 referring to existing structures.
• Conversely, the relevant section in the tender submission clarifications was headed “design responsibility” and dealt with issues much broader than just existing structures.
• The words “Employer Risk” in the contract clarifications could only mean that the risk associated with the existing structures was accepted by C&C – that is why the contract clarifications were included in the Contract.

The court also dealt with an incidental issue as to whether pre-contract negotiations between the parties were admissible and supported either party’s case. The court followed the general rule that negotiations are not admissible (the parol evidence rule), and said that, in any case, they did not assist either party.

Takeaways

The principles in Sisk v C&C could apply to the allocation of any major risk in a construction contract – including, for example, existing structures, ground risks and approvals by statutory bodies. It is therefore important to properly document the agreed allocation of risk – otherwise one party could be left with a risk which it is not suitable to manage and/or hasn’t costed.

Parties should therefore consider the following points when preparing a construction contract:

1. Are the terms and commercial and technical documents consistent? The parties in Sisk v C&C could have saved a lot of time and money if the Contract terms and two clarifications documents were consistent with each other.
2. Does the contract include all of the documents that you want to have contractual effect? Any documents to be relied on should be properly incorporated into the contract (especially if the contract includes an entire agreement clause). Examples of relevant documents include derogations from the specifications and pre-contract meeting minutes. Conversely, documents that don’t reflect the agreed position (for example, post-tender negotiations that have been superseded) should be excluded.
3. Does the contract include an order of precedence clause and, if so, how does it operate? An order of precedence clause can help to allocate risk and avoid disputes where complicated commercial and technical documents might be interpreted differently.