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E-raamat: Construction Contract Variations

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Changes to the work on construction projects are a common cause of dispute. Such variations lead to thousands of claims in the UK every year and many more internationally. Liability for variations is not only relevant to claims for sums due for extra work but this is also an important underlying factor in many other construction disputes, such as delay, disruption, defects and project termination. This is the first book to deal exclusively with variations in construction contracts and provide the detailed and comprehensive coverage that it demands.

Construction Contract Variations analyses the issues that arise in determining whether certain work is a variation, the contractors obligation to undertake such work as well as its right to be paid. It deals with the employers power to vary and the extent of its duties to approve changes. The book also analyses the role of the consultant in the process and the valuation of variations. It reviews these topics by reference to a range of construction contracts.

This is an essential guide for practitioners and industry professionals who advise on these issues and have a role in managing, directing and compensating change. Participants in the construction industry will find this book an invaluable guide, as will specialists and students of construction law, project management and quantity surveying.

Arvustused

'This is the first book to deal exclusively with such variations in construction contracts and it came too late for the people of Edinburgh. But it does contain, perhaps, a message for those constructing new countries 'Don't expect everything to go to plan'.' - Edward Fennell for The Times Newspaper

'Construction Contracts Variations is a useful guide on a common yet specialised topic. It should therefore be pulled off the shelf and studied closely, whenever "variations" are leading to "vexation".' - Julian Bailey for Society of Construction Law Newsletter

I want every adjudicator and wannabe adjudicator to sit an examination and cross-examination on all that is said in this brand new book. It is "Construction Contract Variations" by two top-notch construction lawyers, Michael Sergeant and Max Wieliczko' - Tony Bingham

'The need for a comprehensive and analytical treatment of variations has therefore long been felt by practitioners. That gap has now been more than filled by Michael Sergeant and Max Wieliczko of Holman Fenwick Willan with a work of real practical utility, erected on rigorous intellectual underpinning.' - Simon Rainey Q.C., Quadrant Chambers

'This book will be an invaluable tool to those operating in the construction industry and no doubt a text that will in time become a practitioner's manual for understanding a hitherto under-explored area.' - Hannah Wennell, Associate, Pinsent Masons for Chartered Institution of Civil Engineering Surveyors

The book is a thorough treatise on the subject of variations and is a must buy for anyone who wants to develop their knowledge of construction law. It is a book not only for lawyers but is suitable for students studying construction law, engineers, architects, project managers, adjudicators, arbitrators and judges. It is simply an excellent book. - Andrew Tweeddale, Corbett & Co International Construction Lawyers Ltd, London for Construction Law International (December 2014)

To construction project dispute decision-makers, this book serves as a comprehensive guide which is instructive on an exceptionally wide range of issues arising in relation to construction contract variations. To construction law practitioners, it serves as a complete directory when advising on both the avoidance and resolution of variation disputes. To construction law academics and students, the book is very well researched and easy to navigate, making it an interesting and highly informative read for professors through to undergraduates. - Professor Doug S Jones AO for The International Construction Law Review 2015

Preface v
Table of Cases xviii
Table of Legislation xxvi
Chapter 1 Overview 1(16)
Section A Introduction
1(1)
Section B Questions Concerning The Nature Of Variations
1(10)
What variations are covered by this book?
1(2)
Why are variations made to the works?
3(1)
Why do construction contracts contain unilateral variation provisions?
4(1)
What are the characteristics of an instructed variation?
5(1)
What risks does a unilateral variation power pose for a contractor?
6(1)
Is a contractor entitled to extra money and time for additional work?
7(1)
What risks does a unilateral variations provision pose for an employer?
8(1)
What are the most common disputes that arise in relation to variations?
9(2)
Section C Summary Of Content By
Chapter
11(6)
Chapter 2: Employer approval
11(1)
Chapter 3: Scope of works
12(1)
Chapter
4. Contractor's obligations in respect of the works
12(1)
Chapter
5. Power to vary
13(1)
Chapter
6. Variations required because of contractor risk
13(1)
Chapter
7. Duty to vary
13(1)
Chapter
8. Variation instructions
14(1)
Chapter
9. Change in the absence of a variation instruction
14(1)
Chapter
10. Valuation process
15(1)
Chapter
11. Entitlement to money
15(1)
Chapter
12. Entitlement to time
15(2)
Chapter 2 Employer Approval 17(16)
Section A Introduction
17(3)
Section B Employer Approval
20(2)
Section C Project Impasse
22(7)
Solutions to the problem of project impasse
24(3)
Refusal by employer to approve any change
27(1)
Disagreements as to the validity of the instruction
27(1)
Can the impossibility of undertaking work result in the frustration of a contract?
28(1)
Section D Complexity In Assessing Responsibility For Change
29(3)
Section E Approval Via Waiver And Concession
32(1)
Chapter 3 Scope 33(72)
Section A Introduction
33(4)
Interpretation of contract documents
34(1)
Reasons for ambiguities and errors in the scope
35(1)
No requirement to instruct work already within the scope
36(1)
Section B Contract Interpretation
37(13)
Contradictions between documents
39(3)
Incomplete information
42(1)
Contractual obligation to undertake work not referred to
43(1)
Cases illustrating interpretation of the contract scope of works
43(7)
Section C Contractual Obligation To Undertake Work Not Expressly Referred To
50(6)
Extent of the contractor's discretion when departing from the scope
53(1)
Where the extra work does constitute a change under the variations clause
54(1)
Change ordered under a provision outside the contract mechanism
55(1)
Measurement contracts
56(1)
Section D Impossibility Of Building The Described Scope
56(7)
Section E Build Risk And Methodology
63(10)
The description of the build methodology in contracts
64(1)
The contractor's buildability obligation
65(3)
No buildability risk taken by the contractor
68(3)
Changes required because the construction method proves inadequate
71(1)
Power of the employer to direct temporary works outside variation procedure
72(1)
Section F Design Risk
73(10)
The nature and extent of the contractor's design responsibility
73(3)
Changes required because of inadequate design
76(1)
Instruction procedure and the identification of an appropriate solution
77(2)
Design development and approval of design details
79(3)
Importance of correctly drafted employer's requirements
82(1)
Section G Deemed Variations
83(2)
Deemed variations triggered by an event
83(1)
Deemed variations to resolve discrepancies
84(1)
Section H Contract Procedures To Resolve Inconsistencies
85(4)
Section I Contracts With Alternative Pricing Models
89(8)
The remeasurement of quantities contrasted with variations
91(2)
Assessment of whether work is included in the rates
93(2)
Fixed scope with flexible categorisation of work types
95(1)
Sanctity of rates and changes in quantities
96(1)
Provisional sums
97(1)
Section J Contracts For Services
97(8)
Express terms
99(2)
Implied terms
101(4)
Chapter 4 Contractor's Obligations In Respect Of The Works 105(24)
Section A Introduction
105(3)
Obligation to construct the contract scope
105(2)
Contractor's obligation to build validly instructed variations
107(1)
The contractor's obligations in respect of additional work
107(1)
Section B Compliance With Scope
108(3)
Section C Entitlement To Be Paid For Nonconforming Work
111(3)
Section D Completion Certificates
114(2)
Section E Damages For Nonconforming Work
116(5)
Comparison of the different approaches to the assessment of damages
117(4)
Section F Standard Of Responsibility For Additional Works
121(8)
Design responsibility for varied work
122(1)
The contractor's right to refuse to undertake a variation
123(1)
Liability if the contractor proceeds with the variation
124(3)
Contractor's buildability obligations in relation to varied work
127(2)
Chapter 5 Power To Vary 129(46)
Section A Introduction
129(12)
Characteristics of varied work
133(1)
Implied limits on the power to vary
134(4)
Contractor's refusal to undertake works and right to additional payment
138(2)
Employer's refusal to accept unauthorised work
140(1)
Third-party constraints
141(1)
Section B Type And Method Of Work
141(6)
Method of undertaking work
146(1)
Section C Volume Of Work
147(8)
Express contract provisions to limit change
148(2)
Volume of variations changing the nature of the contract
150(3)
Adjustment of rates for variations and measurement contracts
153(1)
Limits on the amount of change because of uneconomic rates
154(1)
Section D Timing
155(4)
Uncertainty as to the cut-off date for variations
156(2)
Late variations
158(1)
Section E Omissions And Instructing Alternative Contractors
159(12)
The omission of work and redistribution to another contractor
160(5)
The omission of substantial amounts of work from a contract
165(2)
Changes to the project scheme and the instruction of new work
167(2)
Measurement contracts
169(2)
Section F Third-Party Constraints
171(4)
Third-party rights
171(1)
Guarantor's liability
172(1)
Constraints under procurement legislation
173(2)
Chapter 6 Variations Required Because Of Contractor Risk 175(12)
Section A Introduction
175(2)
Ways in which the employer can approve change
176(1)
The employer's duty to vary
176(1)
Disagreement as to the reasons for change
176(1)
Section B Contractor's Entitlement To Be Paid For Variation
177(5)
Valuation of the contractor's entitlement
181(1)
Section C Disputes As To Why Change Is Required
182(5)
Project impasse and interim agreement
184(3)
Chapter 7 Duty To Vary 187(20)
Section A Introduction
187(2)
Circumstances in which the duty may need to be considered
187(1)
Different forms of employer approval
188(1)
The contractor's remedies if the employer refuses to authorise a change
188(1)
Duty to instruct the resident contractor rather than new contractor
189(1)
Section B Express And Implied Duties
189(6)
Express obligation to vary
189(3)
Obligation to exercise a discretion to vary
192(1)
Implied obligation to vary
193(2)
Section C Change As A Result Of Contractor Risk Or Request
195(5)
Duty to vary
197(1)
The employer's discretion to change
198(1)
Differences concerning the design solution
199(1)
Implications of the employer's refusal to approve change
199(1)
Section D Change As A Result Of Employer Risk
200(7)
Chapter 8 Variation Instructions 207(26)
Section A Introduction
207(3)
Section B Written Instructions And Conditions Precedent
210(11)
The 'in writing' requirement
215(1)
Instructions that direct change and concessions
215(4)
Provisions requiring notice of claim
219(2)
Section C The Contract Administrator's Authority To Instruct Variations
221(7)
The law of agency
222(1)
Agency law principles in the context of variation instructions
223(1)
Authority limited by the contract powers and procedures to vary
224(2)
Contract administrator has no ostensible authority to vary or waive compliance
226(1)
Limits on the contract administrator's actual authority
227(1)
Section D Prior Approval And Subsequent Sanction
228(2)
Section E Contract Mechanisms Providing For The Agreement Of Variations
230(3)
Chapter 9 Change In The Absence Of A Variation Instruction 233(62)
Section A Introduction
233(6)
Reasons why a change is undertaken without a formal variation instruction
234(3)
Role of the contract administrator in authorising change
237(1)
Payment for additional work
238(1)
Limitations in relation to additional work ordered
238(1)
Section B Concession
239(4)
Concession or variation instruction
240(1)
Establishing whether a concession has been given
241(1)
Withdrawal of a concession
242(1)
The contract administrator's authority to permit a departure from the scope
243(1)
Section C Consensual Variation
243(10)
Mutual agreement
245(2)
The contract administrator's authority to agree a consensual contract variation
247(1)
The form of the variation agreement
248(3)
Consideration
251(2)
Third-party restrictions on variations
253(1)
Section D Waiver Of Contractual Variation Mechanism Formalities
253(10)
Principles of waiver and estoppel
254(3)
Cases applying waiver and estoppel
257(3)
Implied promise to pay: Molloy v. Liebe
260(1)
Difficulties in establishing waiver and estoppel
261(2)
The contract administrator's authority to waive compliance
263(1)
Section E The Obligation To Approve And Instruct A Change
263(7)
Brodie: basis of the dispute
265(2)
Brodie: the arbitration provisions
267(2)
Obtaining payment for variations: court dispensing with the need for instruction
269(1)
Section F Collateral Contracts
270(6)
Additional work undertaken under a collateral contract
273(2)
The contract administrator's authority to agree a collateral contract
275(1)
Entitlements under a collateral contract
276(1)
Section G Restitution, Unjust Enrichment And Quantum Meruit Claims
276(12)
No restitution claim under a subsisting contract
277(3)
Relevance of restitution to variations
280(1)
The extra work cannot be undertaken under the subsisting contract
280(1)
Claims for restitution: no contract subsisting between the parties
281(1)
Contract not finalised by the parties
281(2)
Frustration
283(1)
Repudiation
284(1)
Quantification of entitlement
285(3)
Section H Other Contractual Provisions That Compensate For Change
288(7)
Ground conditions clauses
289(3)
Loss and expense provisions
292(3)
Chapter 10 Valuation Process 295(28)
Section A Introduction
295(1)
Section B Review Of Valuations And The Opening Up Of Certificates
296(13)
Contractual basis for the binding nature of certificates and the right of challenge
296(1)
Opening up and revising a contract administrator's certificate
297(2)
Interim certificates
299(2)
Contractor's applications for payment: timing and subsequent adjustment
301(1)
Final certificates
302(1)
Certificates that are binding because the contract requires discretionary assessment
303(2)
Certificates that are determinative as to whether work is extra
305(1)
Opening up a 'final and binding' certificate because of deficiencies in form and procedure
306(7)
i The certificate purports to cover matters that it should not
306(1)
ii The certificate is not issued in the correct form and manner
306(1)
iii Parties' right to be heard
307(1)
iv Disqualification of the contract administrator for improper conduct
307(2)
Section C The Contract Administrator's Certification Role And Duties
309(4)
Section D The Employer's Duties In Relation To Certification
313(5)
The employer as certifier
313(2)
Duty not to interfere and to ensure the contract administrator performs
315(2)
Parties' agreement to have an independent certifier
317(1)
Section E Agreement Of Valuation And Settlement
318(5)
Authority to agree
318
Consideration
310(10)
Interim valuations
320(3)
Chapter 11 Entitlement To Money 323(40)
Section A Introduction
323(6)
The two approaches to pricing changes
324(3)
Omissions
327(1)
The right to be paid for extra work
327(1)
Design and build contracts
328(1)
Measurement contracts
328(1)
Overlap with other contract compensation provisions
328(1)
Section B Variations Valued By Reference To The Contract Sum
329(17)
Valuation using contract rates and the sanctity of prices
330(4)
Valuation using contract rates: methods of measurement
334(1)
Differences in work sufficient to justify a change to rates
334(3)
The use of contract rates for different work and extrapolating rates
337(2)
Stage 3 of the valuation rules: a 'fair' assessment
339(4)
The treatment of preliminaries, overhead and profit under 'fair' valuations
343(2)
General rate adjustment clauses
345(1)
Dayworks for non-measurable work
345(1)
Section C Variations Valued By Reference To A Price Schedule
346(6)
Standard form contracts using variation price schedules
347(2)
Valuation of omissions
349(3)
Section D Assessment If There Is No Valuation Provision
352(4)
Valuation using the contract mechanism is mandatory
353(2)
Price to be assessed under a contract where no agreement as to rates
355(1)
Section E Measurement Contracts
356(4)
Section F Relationship With Other Contractual Compensation Provisions
360(3)
Chapter 12 Entitlement To Time 363(16)
Section A Introduction
363(2)
Extensions of time and damages for late completion
363(1)
Delaying effect of variations
364(1)
Section B Contracts With No Completion Date Or Extension Of Time Mechanism
365(2)
Section C Grounds For An Extension Of Time
367(5)
Instructed variations
368(2)
Other grounds for an extension of time
370(2)
Section D Delays Caused By Events Not Covered By The Extension Of Time Mechanism
372(4)
Liquidated damages entitlement when event not covered by extension of time mechanism
372(2)
Implied duty excluded by express provision
374(2)
Section E Application Of Delay Principles To Variations
376(3)
The parties agree changes to the scope without a formal instruction
376(1)
Unapproved changes to the works
377(1)
Impossibility of proceeding with the work as a result of employer risk
377(1)
Varied work undertaken outside the contract entirely
378(1)
Index 379
Michael Sergeant qualified as a solicitor in 1995, and has specialised in construction law ever since. He is a partner at Holman Fenwick Willan, and is based in London, but has extensive involvement on international projects.





Max Wieliczko has worked exclusively as a construction lawyer since 1987, providing advice in relation to all aspects of project procurement, delivery, dispute avoidance and resolution.  He is also a partner at Holman Fenwick Willan. Max is based in London, but advises project sponsors, and major international construction companies in relation to projects around the globe, both on and off-shore.













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