John Sisk and Son Ltd v Capital & Centric (Rose) Ltd is a recent case concerning how a building contract allocated site risk for a £60m+ project. While the dispute arose in the construction sector, its lessons on negotiating and concluding a contract extend much further.
The case highlights the critical need for clear and precise drafting, particularly when incorporating contract qualifications or clarifications. It also underscores the care required when compiling a contract for signature so that uncertainty and legal challenges can be avoided.
Background
The project involved the design and construction of two new residential buildings, as well as the refurbishment of four existing buildings – including two listed mills – in Stockport. The contract was a heavily amended JCT Design and Build Contract 2016, a commonly used standard form of construction contract.
The contract included new site condition clauses intended to make the contractor (John Sisk), responsible for site conditions, including the condition of existing structures (i.e. the existing mill buildings) and their suitability for the works.
“2.42.3 The Contractor … shall be solely responsible for ensuring that the ground, the Site and any existing structures … are (or will upon completion of the Works) be suitable for the development and intended occupation and use of the Site …”
Sisk recognised the risks posed by those clauses and the extent to which they could quantify or accept the associated risks. They therefore negotiated the inclusion of an additional clause which said the site condition clauses were “subject to item 2 of the Clarifications”. “Clarifications” was defined as “the clarifications headed “Contract Clarifications” contained within Volume 2, Appendix 2.9 of the Employer’s Requirements”. This point became the focus of the dispute.
The contract had been prepared in electronic form (on a USB pen-drive) and in paper form. Unfortunately, the electronic copy included various documents that were not present in the paper copy.
The hard copy of the contract contained a “contract clarifications” Excel worksheet, dated 17 May 2022. The second row read as follows:
The electronic version of the contract had two clarification documents:
- the “contract clarifications” worksheet noted above; and
- an Excel worksheet titled “tender submission clarifications”, dated March 2022 (i.e. two months before the contract was signed). This showed some of the history of negotiations between the parties. Specifically, it showed the employer saying “We will categorically not accept a blanket exclusion on existing structures”, before a subsequent entry noted agreement that “… the employer is to insure the buildings in line with JCT option C”.
The key difference between the two clarification documents was that one made it clear that the employer was not (or, at least, had not been) prepared to accept the risk of the existing structures, whereas the other ended with the stark words “Employer Risk”.
Sisk asked the court to decide where the risk lay.
The arguments
Sisk argued that:
- The contract clause referred to the “Contract Clarifications” in the Employer’s Requirements. That clearly meant the “contract clarifications” worksheet in the hard copy contract.
- In that worksheet, ‘Existing Structures Risk’ was identified as an Employer Risk. That should be given its ordinary meaning (i.e. Sisk would be entitled to additional time and money arising from issues with the Existing Structures).
- The second clarification document set out the history of negotiations rather than the final position so it could be disregarded.
The employer countered that:
- The reference to “Contract Clarifications” meant the whole Excel Workbook (i.e. both the “contract clarifications” worksheet and the “tender submissions clarifications” worksheet).
- The “tender submission clarifications” wasn’t just a record of history. It reflected the agreed position that the employer:
- hadn’t accepted (and didn’t accept) Sisk ridding itself of the risk of Existing Structures; but
- had agreed to insure the Existing Structures, against fire, flood etc.
- The “Employer Risk” was limited to the procuring of that insurance.
Court’s decision
The court decided in favour of Sisk. While the ‘tender submission clarifications’ were part of the contract, the contract clause (and definition of Clarifications) was referring to the ‘contract clarifications’ worksheet alone. That conclusion was reinforced because the reference to “item 2 of the Clarifications” matched up with the row of the worksheet that dealt with the Existing Structures.
Looking at the clarification, the court decided that the most likely meaning was that the employer was the risk owner and bore contractual responsibility for the suitability of the Existing Structures, including their ability to support and facilitate the works. This interpretation was a logical carve-out from the broader site conditions clause, which went beyond existing structures and the site, and covered issues like neighbouring properties and services.
The court recognised that the tender submission clarification document showed the employer had opposed that allocation of risk but noted that this was two months before the contract was signed and parties can and do change their positions during contract negotiations.
Key takeaways
This case illustrates the types of negotiations that typically accompany the allocation of major risks in construction projects, but the underlying points apply to the negotiation of any contract:
- Do you have a clear approach to how qualifications and clarifications will be addressed in the contract terms? Does that align with any order of precedence / conflict provisions?
- If you are referring to clarifications, are you clear exactly which ones they are?
- Are the clarifications clear, bearing in mind that they are often short form, informal statements rather than more formal contractual language. How would an objective third party read them?
- Make sure that hard copy and soft copy contracts contain the same documents.
- Avoid the temptation to include documents showing the history of contract negotiations. Those are as likely to hinder the clear allocation of risk as help it.
- Don’t avoid difficult discussions about key obligations and risk allocations for fear of re-opening negotiations. The performance of the contract and any on-going business relationships are unlikely to be well served if key obligations and risk allocations are not understood.
Published 22 July 2025
