This review article does not consider the question—hotly disputed in the literature—of whether “Europeanisation” is desirable; the authors of the book consider that it is, of course.6 The review looks at the chapters relevant to construction law. A number of key topics are taken from them and discussed. Before embarking upon the review proper I should like to outline some of the background to the PEL SC.

The book is organised as follows. Six chapters set out rules on the various special contracts previously mentioned, preceded by a chapter on General Provisions.9 Each chapter sets out the relevant provisions,10 followed by a general introduction describing the scope of application and the basic principles and how they link up with the Principles of European Contract Law. The provisions themselves are followed by a Comments section comprising: A. General idea; B. Interests at stake and policy considerations; C. Comparative Overview; D. Preferred Option; E. Relation to PECL and Other Parts of the Principles and any special comments. Readers are also provided with “Notes”, namely Comparative Notes and National Notes.

The biggest problem with rules on service contracts is how to deal with the question of which party is responsible if the outcome of the “service process” is disappointing: as noted under General Idea,14 “Eventually, all these problems result from inadequate decisions”.15 These decisions and problems can sometimes be traced back to the client or the contractor—sometimes both, if one party ought to have warned the other. As these problems show, there is a shared interest on the part of the client and the contractor to work together: “What is needed in order to realise the parties’ individual and common goals is a continuous process of bilateral exchange of support and information between the service provider and his client.”16 The rules, therefore, should not just cover the attribution of liability, they should also encourage the parties to support and inform each other.

This raises two considerations. The idea that problems can be traced back to wrong decisions does not precisely reflect the fact that we need to identify who has caused the problem.17 After all, the point is not that a decision was made but that it was also put into practice: not only was a decision included in a contract, action was also taken accordingly. It makes sense, therefore, to identify the causation of the problem, as this is the aim of all contractual liability systems and dispute adjudicators, but the quest for who caused a problem should be formulated accurately.

The second point is the emphasis on co-operation. Practice teaches us that claims in respect of service contracts are often based on lack of communication (exchange of information), even though the specific subject of the claim may relate to something completely different. The emphasis on co-operation and exchange of information thus goes without saying, and accords with the arguments put forward in the literature, e.g., on conflict avoidance.18 Having said this, it is striking that Article 1:104 (Duty to Co-operate) in effect imposes obligations only upon the client, who must comply with reasonable requests from the contractor for information reasonably needed by the latter (in subparagraph (1) (a)), must issue instructions in so far as is reasonably necessary, etc. The service provider has only one duty in this connection (Article 1:104 (1) (d)): he is required to offer a reasonable opportunity for the client to establish whether the contract is being complied with. While the service provider is subject to general duties of care (see Article 1:10719), these do not include anything about exchanging information. The contractual duty to warn (Article 1:110) only covers matters on which warnings must be given if something is in danger of going wrong. One would have expected some kind of positive duty to inform to be included. An example could have been taken from Article 11 (5) of DNR 2005,20 which generally requires the adviser to keep the client well informed, and Article 2 (3) (o), which expressly requires mutual consultation to take place prior to the signing of the contract on the way in which and frequency at which information transfer is to take place between the parties, and if appropriate with any third parties involved in the project. In this connection I would also draw attention to the provisions of Article 1:10321 on pre-contractual duties to warn. The authors note as regards the Basic Principles22 that the parties need to exchange essential information before the contract is signed. They claim that this exchange process is regulated by Article 1:103, but that Article only deals with negative aspects: there must be a warning if the service will not produce the required outcome; there is no need to warn if the client is already aware of the risks; and what the legal situation is if no warning has been given, etc. One negative response after another is held over the head of the party who is in the wrong. Given that the aim of the drafters of these provisions is to encourage co-operation and exchange of information, one would expect there to be positive incentives, but this is not the case.23 It could be argued that it makes sense to impose an obligation to co-operate upon the client, as a contract usually places few if any obligations upon the client, other than the payment obligation. There is something to be said for this, of course, but it does not take into account the fact that we are expressly concerned here with obligations regarding exchange of information. I would argue that most information obligations should be placed upon the debtor, as it is the debtor who has most information prior to24 and during the performance of the contract, and the creditor will not be able to find out very much without the debtor’s assistance. I therefore regard this provision as a missed opportunity, especially considering that there are good examples available.25

The provision in Article 1:104 (1) (e) that the parties must coordinate their respective efforts is meaningless in my opinion. If a duty or obligation is imposed upon two parties, neither of them will carry it out, as each will expect the other to perform it. In this connection I wonder if it might not have been a good idea to indicate the role of the service provider in more general terms, as, compared with the client, the service provider is the expert, or at least the one who has most control over the performance of the contract, and hence the most information (and in that sense is the expert). Given this argument, would it not be worthwhile to include a provision in this general section reflecting the fact that the service provider is in a special position vis-à-vis the client? DNR 2005, describing the obligations of the adviser,26 refers to “providing assistance independently and in a position of trust”. This is an open-ended provision, and it could be questioned whether it adds much to the adviser’s obligations in legal terms. Whether it does will depend on the context: the more open-ended the rules are (or the contract is), the more they (or it) will have to be fleshed out in the light of this general provision. In view of the types of services regulated by the PECL SC, a general rule of this kind would not be inappropriate in my view, even if it only laid down that the debtor should ensure a good flow of information.27

To sum up, I cannot escape the impression that the rules are targeted mainly at the client, upon whom they place obligations, with the result that they are unbalanced and substantively inadequate. I also consider that the rules—other than apparently promised in the introductory remarks—-contain too many negative incentives. This is out of keeping with the current ethos, given that the literature has long been calling for more positive incentives.

I should first like to make a comment on the pre-contractual duty to warn. It is clear from the fact that this duty is included in these provisions that a service provider or client can only be subject to a duty to warn if a contract has been entered into. Someone looking at a specification with a view to tendering who discovers errors in it is not required to give a warning unless he signs a contract, as there is no legal basis for establishing an obligation upon the tenderer. The explanatory notes on “Interests at stake and policy considerations”30 lose sight of this fact when they note that any expenses incurred in respect of pre-contractual obligations may be in vain if no contract is signed. This remark suggests that there is a pre-contractual obligation even if no contract is entered into. This is incorrect, as the following example illustrates. A, B and C all study a tender specification that has come to their notice. A and B discover errors in it. Neither A nor B reports these errors to X, who publishes the specification in order to attract tenders, nor do they tender. C does tender and is awarded the contract. During the performance of the contract the errors are revealed, with all the negative consequences this entails for the client. The client cannot of course hold A or B liable for non-fulfilment of this pre-contractual obligation: having no contract with them, X has no grounds for claiming from A or B.31,32

Article 1:103 provides the framework for establishing after the event whether an obligation has been fulfilled that should have been fulfilled prior to the signing of the contract. This is unsatisfactory as a matter of principle. The problem that the drafters are trying to solve by means of the pre-contractual duty to warn is, in effect, that one party is labouring under a misapprehension33 while the other party has a correct apprehension of the situation and moreover knows that the first party is misguided and intends to do business with that party without being open about matters. To put it in loaded terms, the ignorant party is confirmed in his ignorance by the fact that the other party does business with him. The drafters regard this as unacceptable and are trying to solve the problem with rules of this kind. In other words, we are talking about improper conduct in a situation where there is no contract,34 thus bringing us essentially into the area of tort. A sanction for this kind of conduct is being sought in contract law, and this, as I have noted, is unsatisfactory. The problem is not insuperable, but it does require the provisions of contract law to be formulated with care. It would be better, therefore, to frame the issue in terms of contractual liability rather than a pre-contractual obligation: if the contract has been entered into as a result of one party being under a misapprehension, which is confirmed by the actions of the other party, the party under the misapprehension has the following remedies (compensation, rectification, etc.).35,36 In terms of principle this achieves the same effect,37 and what we are trying to achieve fits in better with the system.38

This still leaves us with the problem of how detailed the provision should be, and this applies to both the pre-contractual and contractual duty to warn. The author39 points out that it is better to have a provision of this kind “and to limit carefully the extent of the duties it imposes than to have no provision at all”. There is, of course, a third option, namely, to have a (pre)contractual duty to warn that is formulated much more simply and concisely. The text of the two provisions invites us to prove that they do not cover a specific case.40 The proof clauses are also much too far-reaching: arbitrators and judges do not need the instructions in Article 1:103 (6) and (7) or Article 1:110 (5) and (6) to rule whether or not a party had a reason for knowing something.41 In a word, as far as the duties to warn are concerned, the wording is too complicated and the pre-contractual duty to warn is difficult to fit into the system in terms of principle.42

Could it be that the distinction is warranted by a difference in the legal consequences? Let us first see what the authors have to say on the subject54:

Does qualifying work as contracting or processing produce different legal consequences according to the rules? Article 2:10455 (Conformity)—a difficult text—refers to an obligation to achieve a specific result,56 as does Article 3:105.57 Asser-Van den Berg sees the different wordings of the two provisions as producing different qualifications, noting58 that while the PEL SC does also refer, in the context of conformity, to an obligation to achieve a specific result in the case of processing, there is more scope for taking the diversity of the situation into account as it is not stated that the thing to be processed has to be “fit for purpose”.59 In other words, he does see a difference in the legal consequences.

I have my doubts as to whether this interpretation is entirely correct: I am inclined to read an obligation to achieve a specific result into both provisions, albeit in the case of processing the PEL SC defines the subject of the contract that ultimately has to be “fit for purpose” differently. When asked to process something, the service provider can be instructed that, once processed, it must be “fit for purpose”, but that seems to me to be a requirement that does not normally follow from the nature of the processing contract, unless specified as such, since the thing is not a new product produced by the processor. To demand from the latter that the thing itself be “fit for purpose” (unless this is expressly stipulated) does not strike me as appropriate; nor is it required by Article 3:105: “The processor must achieve the specific result stated or envisaged by the client at the time of the conclusion of the contract …” The obligation to achieve the result relates to the result stated or envisaged, which could be that the thing is “fit for purpose”, or it could just relate to the quality of, e.g., the painting work. In short, there is a distinction—intended but open to criticism—between the subject of the performance as regards contracting and processing, but, other than in Article 3:112, I see no such distinction in the obligation upon the service provider as Van den Berg claims to perceive. This Article lays down:

What, then, should we make of the rules containing the distinction? The distinction itself is unclear: is painting a new-build home contracting or processing?60 What is the point of the distinction? As already indicated, in both cases, the liability rules in Articles 2:104 and 3:105 place an obligation to achieve a specific result upon the service provider.61 Why, then, is it necessary to have different provisions (with such complex wording, moreover)? Are they warranted by the fact that they give the processor control over the thing? But surely that is just the same as in the case of contracting, where the property to be built is also under the service provider’s control? In that case, too, there is a risk of other things in the vicinity of the property being endangered.62 The argument is not convincing. The Dutch rules on contracting (Civil Code, Article 750 (1)63) could be taken as an example for these two provisions. They cover work on new-build structures, but the definition is harmoniously worded so as to include processing and other corporeal works. Looking at the National Notes,64 it seems to me that the choice that has been made here is out of line with the approach in many European countries and should therefore be revised in a subsequent edition.

A striking feature is the specification in Article 5:102 of the pre-contractual duties to warn:

Article 5:10467 sets out five sets of obligations under the heading “Duty of Care of the Designer”. Given the lengthy description of the designer’s obligations, we would generally expect to find that the designer is required to produce a design that is technically sound, legally practicable and financially feasible:68 this is not the case. Running through the Article in the order in which it is written, we find that the designer is required to: attune the design work with that of other designers, integrate the work of other designers, supply the information needed for users to give effect to69 the design; enable the user of the design to give effect to it without violating rules of public law; and provide a design that allows economic and technically efficient realisation. The following comment is made on this last aspect: