The High Court’s decision in John Sisk and Son Ltd v Capital & Centric (Rose) Ltd [2025] EWHC 594 (TCC) sheds valuable light on two critical aspects of construction contracts; the interpretation of risk allocation clauses and the incorporation of contractual documents. The case arose under a JCT Design and Build 2016 contract, heavily amended and supported by extensive employer requirements. For contractors, subcontractors, and consultants working under complex or amended standard forms, the judgment serves as a timely reminder of the importance of clarity, consistency, and precision in defining both risk and contract content.
Background
The dispute concerned a mixed-use development involving the design and construction of two new residential buildings and the refurbishment of two listed mills. John Sisk & Son Ltd was appointed as the contractor. The contract, based on the JCT Design and Build 2016 form, included a Schedule of Amendments and extensive Employer’s Requirements. At the centre of the dispute was the question of who bore the risk of defects in the existing structures.
The contract broadly assigned risk relating to ground and physical conditions to Sisk under bespoke amendments to the JCT Design and Build 2016 form. However, that allocation was made subject to a qualification referencing the “Contract Clarifications” which were in Volume 2, Appendix 2.9 of the Employer’s Requirements.
Item 2 of those Clarifications expressly identified the “Existing Structures Risk including ability to support/facilitate proposed works” as an “Employer Risk,” with the Employer being responsible for insuring the existing buildings and procuring a warranty concerning their structural suitability. The Court accepted that this wording carved out the risk of suitability of existing structures and placed that responsibility instead on the Employer.
The document inconsistency issue
Two versions of the contract documents existed; a physical version, containing only the “Contract Clarifications” worksheet, and an electronic version, which included both the “Contract Clarifications” and a separate “Tender Submission Clarifications” worksheet. The dispute centred on whether the second worksheet, “Tender Submission Clarifications”, formed part of the contract and whether its inclusion altered the allocation of risk.
The court held that both the physical and electronic documents formed part of the contract, partly because Sisk had not pleaded that the Tender Submission Clarifications were not contractual documents. However, in relation to the definition of “Clarifications,” the Court found that the term referred only to the “Contract Clarifications” and did not extend to the Tender Submission Clarifications. This distinction was critical, as it meant that risk for the existing structures remained with the Employer rather than it transferring to Sisk.
Risk allocation and the meaning of “employer risk”
Sisk argued that the label “Employer Risk” in the Contract Clarifications shifted the risk of existing structures to Capital & Centric. The Employer countered that this label merely obligated them to insure the buildings and obtain the warranty. The court sided with Sisk, finding that the term “Employer Risk” clearly signified that the Employer retained the contractual risk relating to the condition and suitability of the existing structures. The judgment stressed the need to give effect to the plain meaning of contractual wording within the full context of the agreement.
Admissibility of pre-contractual negotiations
Capital & Centric attempted to rely on pre-contractual negotiations to interpret the term “Employer Risk” more narrowly. However, the court reaffirmed the established principle that such pre-contractual negotiations are generally inadmissible unless they provide objective background facts known to both parties at the time of contract formation, although this exception is very narrowly interpreted. In this case, even if such materials had been admissible, they would not have changed the outcome.
Practical implications for construction professionals
The judgment reinforces several key principles for those involved in contract administration and negotiation.
- First, precise drafting is essential when allocating risk. Labels such as “Employer Risk” should be defined clearly to avoid uncertainty. Where risk is being carved out from otherwise broad contractor obligations, that carve-out must be expressed in unambiguous language.
- Second, consistency between electronic and physical versions of contract documents is vital. Discrepancies in content, format, or structure can lead to protracted disputes. If multiple versions exist, care must be taken to ensure that each version is clearly identified and cross-referenced in the contract register or contents page.
- Third, tender clarifications and other pre-contract communications must be treated with caution. They are often informal or incomplete, and may not be suitable for incorporation unless their content is fully aligned with the final contractual risk matrix. If included, these should be clearly defined and referenced in the contract as incorporated terms.
- Fourth, physical documents can carry evidential weight. Although the absence of a document from the signed physical contract is not determinative, it can be a strong indication of the parties’ intentions, particularly where electronic versions contain additional or conflicting material.
- Finally, parties should consider including a contractual hierarchy or order of precedence clause. This can provide clarity where multiple documents contain overlapping or inconsistent provisions and may resolve ambiguity before it becomes a source of dispute.
Final thoughts
The decision in John Sisk v Capital & Centric illustrates the very real commercial and legal consequences of inconsistent drafting and unclear document incorporation. Contracting parties must ensure that risk allocation provisions and supporting documentation are drafted and coordinated with care. Reliance on informal clarifications or assumptions can lead to significant liabilities if the contractual framework does not support them. As with many recent decisions, the message is clear: contractual certainty is not achieved through intent alone, it requires precision on the page.
How CCC can help
Our team assists contractors, subcontractors, and employers with drafting and reviewing construction contracts to ensure that risk allocation is accurately recorded and contractual documents are properly incorporated. We advise on managing inconsistencies between tender clarifications and contract terms, and we provide strategic guidance on resolving document incorporation disputes. Whether you are entering into a new contract or dealing with a dispute over risk or interpretation, we can help safeguard your commercial position. We also deal with disputes where issues such as this have arisen and help parties to navigate resolutions to the problems posed by this.
