Is pipeline assembly a specific work?

by Anna Smagowicz-Tokarz, Michał Zakrzewski

19 October 2021

In this article we will use a court case study to explain, among other things, what a contractor should ask about and what the customer should tell.

Clear contractual description of both parties’ tasks is the best protection in case of a dispute. A ruling issued by the Court of Appeal in Poznań confirms that unless a contract for pipeline assembly (or the respective order) stipulates otherwise, the contractor as a professional service provider is obliged to design the specific work (Polish: dzieło). Consequently, obtaining the relevant information for this purpose is also up to the contactor. Without a clear contract there is a serious risk of a dispute over the parties’ responsibilities, which may end up in court.

Michał Zakrzewski, attorney at law who represents the Litigation and Dispute Resolution practice at the law firm of Rödl & Partner, successfully defended a client, who ordered a pipeline construction, in a dispute before both court instances in Poznań. An automotive company ordered a pipeline for heat recovery in its manufacturing plant and delivered a system drawing. The contractor was a plumbing, heat, gas and air-conditioning company.

What was the case about?

The pipeline did not do its job because the structure leaked at weld joints between pipe sections as a result of high temperatures. A major overhaul was required in consequence. The repair work done by the contractor did not fix the defects, so the customer hired another company and re-charged the original contractor for the work performed.

In the course of the dispute, the contractor raised that he was told the working parameters of the pipeline, such as the operating temperature and pressure, neither during the on-site visit before the work nor in the purchase order. Consequently, the defendant could not make the necessary calculations. The contractor claimed that he was not obliged to design the pipeline. He was to deliver materials and assemble the system components by connecting them into an integral whole on the basis of the drawing supplied by the customer, the arrangements made during the on-site visit and the proposal.

The customer who ordered the pipeline claimed that even if the contractor received neither a design nor data necessary for the computations and selection of the structure, materials and welding parameters, he should have informed the other party that a system design was required or it was necessary to check and compute how the structure would behave under certain working conditions. The contractor also should have warned the customer about the risk of building the exchanger solely on the basis of a drawing and the on-site visit without basic computations and selection of the welding technology that would ensure adequate strength of welds.

Courts of both instances shared the customer’s view and explained that the defendant was obliged to inform him about obstacles to the contract performance. If the contractor believed that the customer failed to provide all information necessary to accomplish the work and there was an obstacle to the pipeline construction, he should have raised this immediately. The contractor knew that he was building a pipeline for a specific facility. General knowledge and logical thinking suggest that pipelines may work in different temperatures. If there is no universal solution, the identification of the working temperature range of the system is crucial. Failure to obtain such data makes the contractor liable for defects to his work. The defendant was obliged to repair the defective component at his expense.

The claims against the customer for failure to provide “basic working parameters of the pipes, i.e. working temperature and pressure” were found to be ungrounded. The contractor undertook to build the system although he had no basic data that would allow him to assess even his own competence to complete it. The defendant tried to blame the customer for the lack of information he did not request and which most certainly was not conditional for his undertaking of the task.

Summary

A professional contractor of a specific work is obliged to obtain from the customer all information necessary to complete the work. Additionally, clear definition of the parties’ tasks and responsibilities in a contract, as well as proper documentation of the work stages, will directly translate into the future success should the parties tangle up in a court argument.