13.4.1 Other than as set out in Section 13.3 above, the Authority should be very careful in warranting any information it provides. Warranties, to the extent given, should not extend beyond information on which the Contractor must rely for its bid. Accordingly, the Authority should seek to minimise the extent of any warranties, unless:
• the Authority is the sole source of such information or such information cannot be verified by the Contractor at reasonable cost;
• the Authority is confident in the accuracy of such information or is able to confirm its accuracy without significant expense (e.g. through surveys, in-house checks or inspections); and
• the Authority will obtain better value for money as a result (taking into account the overall risk allocation).
13.4.2 If the criteria listed in Section 13.4.1 (Authority Warranties) are satisfied and the Authority gives certain warranties, this will help reduce the Contractor's costs. The Contract could then either contain a price variation mechanism to be employed if the information turns out to be inaccurate (rather than giving rise to a right to terminate) or give rise to a Compensation Event. An example of where warranties are likely to be appropriate is where employees are being transferred by the Authority to the Contractor or particular known risks exist in relation to a building (such as asbestos content).
13.4.3 Where the Authority does give warranties it will need to ensure that they are suitably time limited. Required drafting for warranty exclusion, and for title warranties (where given by the Authority) and for related provisions is as follows:
13.4 Authority Warranties
13.4.1 Exclusion from Warranty
The Contractor shall, save to the extent of the Authority's warranties contained in Clauses 13.4.4 (Authority Title Warranty) and 13.4.6 (Authority Warranted Data), be deemed to have:
(a) satisfied itself as to the Assets to which it will acquire rights and the nature and extent of the risks assumed by it under this Contract; and
(b) gathered all information necessary to perform its obligations under this Contract and other obligations assumed, including:
(i) information as to the nature, location and condition of the land (including hydrological, geological, geo-technical and sub-surface conditions);
(ii) information relating to archaeological finds, areas of archaeological, scientific or natural interest,3 local conditions and facilities and the quality of existing structures; and
(c) [other relevant information (e.g. environmental contamination)].4
13.4.2 No Relief
Subject to Clause 13.4.3 (Fraudulent Statements), Clause 13.4.4 (Authority Title Warranty) and Clause 13.4.6 (Authority Warranted Data), the Contractor shall not in any way be relieved from any obligation under this Contract nor shall it be entitled to claim against the Authority or any Authority Related Party on grounds that any information, whether obtained from the Authority or otherwise (including information made available by the Authority or any Authority Related Party), is incorrect or insufficient, and it shall make its own enquiries as to the accuracy and adequacy of that information
13.4.3 Fraudulent Statements
Nothing in this Clause 13.4.3 (Authority Warranties) shall exclude any liability which the Authority or any of its agents or employees would otherwise have to the Contractor in respect of any statements made fraudulently prior to the date of this Contract.
13.4.4 Authority Title Warranty5
Provided that no inaccuracies or omissions in such information shall be capable of giving rise to an Authority Default, and save as disclosed in the [Specific Title Matters], the Authority warrants and undertakes that throughout the Contract Period:6
(a) the Site will be in the sole legal and beneficial ownership of the Authority;
(b) the Site will not be subject to any Adverse Rights;
(c) no one will be in adverse possession of the Site or has acquired or is acquiring any Adverse Rights affecting the Site;
(d) there will be no disputes, claims, actions, demands or complaints in respect of the Sites that are outstanding or that are expected by the Authority and that would prevent or disrupt the carrying out of the Services; and
(e) no person, other than the Authority [ name any other ] will have any right (actual or contingent) to possession, occupation or use of or interest in the Sites;
means any interests, rights, covenants, restrictions, stipulations, easements, customary or public rights, local land charges, mining or mineral rights, franchise, manorial rights and any other rights or interests in or over land, in each case whether or not registered that would, if exercised, prevent or disrupt the carrying out of the Works and/or the provision of the Services.
13.4.5 Contractor acknowledgement
The Contractor hereby acknowledges and agrees that it has been provided with copies of all of the [Specific Title Matters] listed in Schedule [ ] (Title Matters) and that all such matters that are disclosed within the [Specific Title Matters], are disclosed against the warranties set out in Clause 13.4.4 (Authority Title Warranty).
[13.4.6 Authority Warranted Data
The Authority warrants to the Contractor that the Authority Warranted Data has been prepared after due and careful enquiry and is reasonably believed to be true, accurate and complete as at the date of this Contract, provided that no inaccuracies or omissions in such information shall be capable of giving rise to an Authority Default.]7
___________________________________________________________________________________________________
3 See Section 15.1.4 (Supervening Events) for the treatment of fossils and antiquities in certain projects.
4 The value of environmental warranties/indemnities will need to be reviewed on a project specific basis, taking into account the considerations outline in Section 13.4.1 (Authority Warranties). In certain circumstances, for example, it may prove better value for money for the Authority to provide environmental indemnities where a low probability but high impact risk is present, e.g. where part of the site was previously used as gasworks.
5 This drafting should be used where the Authority owns the land provided for the project. The Authority warrants title to the Sites and no Adverse Rights (save as disclosed). The onus is on the Authority to prepare and provide to the bidders during the dialogue stage the Disclosed Title Matters, the Replies to Enquiries and the Disclosed Searches (definitions will be needed), which will be disclosed against these warranties and of which the Contractor will be deemed to have knowledge. Where title to a Site is unregistered the Authority should register title to the Site at Land Registry at the earliest opportunity. No certificates of title should be needed as a result of the warranty approach.
6 Disclosure of site-specific matters and the square bracketed wording should be given in a schedule to the Contract. If a particular title matter is not disclosed, then breach of the relevant warranty will lead to a Compensation Event The principle is that the core liability for title issues must sit with the Authority. This approach is straightforward and means that no certificates of title need be produced by any parties to the transaction.
7 This clause should be deleted where there is no Authority Warranted Data being given. Title information is covered separately so it is anticipated that this clause will be used only in specific circumstances and the term should be defined accordingly and the data set out in a schedule.