The meaning of “sign off” in the construction industry and the risks of using it

In the construction industry, the term “sign off” is frequently used in a variety of contexts, often spontaneously and in an informal context. Understanding the term’s use and misuse is crucial for contractors, subcontractors, project managers, and legal professionals to ensure that the rights and responsibilities of the various parties to the project are properly managed and enforced.

What does “sign off” mean in construction?

According to the Cambridge English Dictionary, to sign off (on something) means “to formally approve or agree to something”.  In the construction context, this could be the completion of a particular phase of work, the approval of design or materials, or even the final acceptance of the entire project. The “sign off” might be represented by a physical signature on a document, a formal acknowledgment in a meeting, the submission of approval via electronic communication, or sometimes even a nod. While “sign off” serves as a useful shorthand to indicate agreement or completion, its ambiguity can lead to problems, particularly when legal matters are involved.

Key contexts in which “sign off” might be used in construction include:

• Contract documentation: (for example, certification of payments or practical completion, change orders, or variations as to time and cost)
• Site records: (usually the remit of a senior manager or executive, signing off on processes, such as induction or health and safety)
• General correspondence: (in its most general context, to sign off can mean to confirm an agreement or acknowledgment)
• Verbal communication: (“signing off” can be done off-the-cuff, leading the respondent to believe that the speaker has authority to do so, even if that’s not the case).

What are the risks?

1. Contract documentation

The meaning of “sign off” in a contract, if used, is rarely defined.  Matters which require approval of either of the parties should always be the subject of a stepped process of proposal/counterproposal, discussion, and formalising the resolution.  Without precise language, there is a risk that one party might interpret the sign off as full and final approval, while another sees it as provisional or conditional. Contracts reflecting best practice will require that any matters requiring approval are confirmed in writing, often by a delegated authority such as the employer’s agent or client’s representative.  For really important approvals such as practical completion, certification always should be required.

Even the best practice set out in the contract terms is immaterial and toothless if the parties don’t observe the formalities required by the terms.  There is significant case law on the subject of wrongly-issued payment notices etc. which evidences the parties’ getting tripped up by over-reliance on casual informality rather than acting according to the contract terms.

2. General correspondence

A verbal “sign off” or an informal email might not meet the legal standards required to confirm a party’s responsibilities and obligations to approve something under a contract.  In cases where something goes wrong, these informal methods could be deemed insufficient evidence to indicate approval, leaving a party intending to claim for negligent sign off unable to enforce it.

Conversely, there is nothing preventing employers seeking compensation for losses from bringing a claim of contributory negligence towards a party who has signed off a defective piece of work on its own behalf, or on behalf of another party.  This is a particularly risky area for consultants carrying out contract administration services, on behalf of employers.  In addition, if a “sign off” is treated as final and binding, it could inadvertently waive a party’s right to claim defects, even if they become apparent after the sign off.

Parties are advised to check the notification requirements in the underlying contract to ensure that informal correspondence cannot be construed as formal approval.  The recent changes to the JCT in 2024 allowed for the parties to make approvals and notifications by email, arguably opening the gate for more informal approvals to be issued mistakenly by parties that are unfamiliar with the contractual notification rules or who may not have actual authority to do so. On a similar note, please see Chris Kirby-Turner’s and my article on Whatsapp site communications in Construction Management.

3. Site records

Site records are often required as a term of the contract, particularly for the purpose of monitoring compliance with requirements such as health and safety, employment conditions, materials and quality of work.  Approvals or endorsements of work captured in site records should always be in writing; for example, a record of an inspection having been made should not be relied upon as evidence of approval and it is often a condition of contract that they cannot be so relied upon.

A number of individuals will have responsibility for contributing to site records, which is why it’s important to identify one individual on site at any one time who carries responsibility for the site records on that day.  In the context of building safety, accountability is key, so this has a greater significance in recent times.  Each organisation with a responsibility for site records should ensure that they know the identity of the person responsible for signoffs made by their organisation on the daily, and that no indication of approval or confirmation is made by them informally in the site records unless endorsed by the responsible person.

4. Verbal communication

Although enforcing an agreement made orally is far more complex than when the agreement is in writing, it isn’t impossible if its existence can be proved and it meets the relevant common-law requirements.  This means that a verbal sign off, without any underlying contractual rules as to formalising, could constitute an enforceable contract.

The best avoidance route is of course to ensure that formalities are set down in the contract terms, and that the individuals constituting the parties on the project are aware of such formalities. In the absence of this, formal acknowledgement in writing after the event can help to clarify a party’s intention as to the agreement, but it doesn’t exclude the possibility that the other party may have acted in reliance of the verbal sign off in the interim period.

Design co-ordination

Given the scope of losses contemplated for claims for defective design, sign-off in the design context requires particular scrutiny when considering the legal risks.  The design not only includes drawings but also the specification of materials, responsibility for which can be unclear when it comes to light that alternative products/supplies need to be specified during the construction phase.

Responsibility for design sign off generally lies with the contractor under the design and build procurement route, and this is often subcontracted. Generally speaking, employers using the traditional procurement route will use a lead designer (often the architect) to co-ordinate all design on the project.  This creates the uncomfortable scenario for the lead designer of taking responsibility for design produced by others, which can lead to professional indemnity insurance coverage issues.

In the case of Burgess & Anor -v- Levonjarn [2016] EWHC 40 (TCC) an architect gave free advice to a friend without being appointed formally and found herself owing liability.  Alexander Nissen QC determined that a tortious duty of care had arisen: “In the provision of supervision services in respect of construction work, a professional usually deploys a special skill and, in circumstances where there is an assumption of responsibility, a duty of care arises..”  The action of carrying out design and design lead services (such as sign off), even in the absence of established contractual liability, can impose unwanted responsibility without formal appointment.

Design leads are best advised that certainty is key and a very clear set of lead designer services, a disclaimer as to the work produced by others and (best of all) a design responsibility matrix are all contractual devices employed to ensure clarity and boundaries in place to combat any claims of responsibility when signing off others’ work.

While “sign off” is a term commonly used in the construction industry, its legal implications can be vague and open to interpretation. Ambiguity in contract documentation, site records, and correspondence can expose parties to risks, misunderstandings, or costly disputes.  A combined approach of well-considered, clear documentation and a proper understanding of the parties’ contractual responsibilities by those actually carrying out the work provides the antidote to the risks associated with using throwaway terms.