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Sender:
Steve Hedley
Date:
Mon, 10 May 1999 23:09:59 +0100
Re:
Variation clauses

 

At 11:55 10/05/99 +0100, Eoin O' Dell wrote:

Many building contracts -especially standard form contracts published by various institutes for various purposes - explicitly provide for a mechanism by which extras can be charged and paid for. Even where they do not, there will often be a contractual variation to cover the extra work, though it will often be difficult - pace Allan Axelrod, and Steve Hedley in Cornish et al eds Essays for Jones - to spell out the indicia of a contract in such circumstances.

What is the difficulty ? The building contractors are not charities. Of course they are doing any additional work on the basis that that they will be paid for it. This satisfies the "reasonable bystander" test easily enough, surely. Or as Allan Axelrod has put it,

isn't there mutual intent that the work be performed and if not covered by contract paid for at reasonable value?

I am not sure what more Eoin wants, when he asks for the "indicia of a contract". Btu whatever it is, he would surely find it in the pre-contractual negotiations of the parties, a major function of which is to settle which items of work are to be paid for under the contract and which are extras.

Talking about Cotter, Eoin added :

The basis of liability in contract is unclear: it was impossible to follow the contract procedures to claim the extra payment; hence, there could be no liability on the contract.

But there were two aspects to the bargain : the bargain as to payment, that the contractor could expect extra for unforeseen work, and the bargain as to procedures to be followed in the event of such a claim.

Murphy J was perfectly clear that the claim for a quantum meruit for extra work was contractual --

"Under that Agreement, the Farmers are bound to remunerate the Contractor in respect of the rock encountered and excavated which had not been foreseen by the Contractor"

-- and, he might have added, the Farmers knew very well that the Contractor would not have signed the contract had it omitted that clause.

As to the procedural aspect, both sides had ignored it, so the judge thought that he should too.

"It seems to me that the Plaintiff cannot be faulted for failing to invoke procedures prescribed by the Contract which involved the co-operation or at least the existence of an Engineer appointed on foot of the Contract when either no such Engineer existed or alternatively, he was declining to fulfil his functions thereunder".

It is unfortunate that in a throw-away line, when discussing a quite different aspect of the case, Murphy refers to the claim as based on "Contract or Quasi Contract". But as he had already offered a satisfactory explanation of the contractual basis of the claim and suggested no restitutionary basis, I think we should let him off, noting merely that someone who never made a mistake probably never made anything else either .......

 

Steve Hedley

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