Changes to The Work
Notes
1 The Company cannot request extra work and changes without express authority: Dodd v Churton [1897] 1 QB 562, (1897) 13 TLR 305.
2 H G Beale, Chitty on Contracts (32nd edn, Sweet & Maxwell 2015) paras 22–032 to 22–039.
3 For the legal test for when a term may be implied see Chitty on Contracts (n 2) ch 14 and Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and Anor [2015] UKSC 72.
4 Sir Lindsay Parkinson & Co v Commissioner of Works and Public Buildings [1949] 2 KB 632, [1950] 1 All ER 208.
5 See the Supreme Court decision in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd and Anor [2015] UKSC 72, [2015] 3 WLR 1843 at 1851 (Lord Neuberger): ‘… a term will be implied if a reasonable reader of the contract, knowing all its provisions and the surrounding circumstances would understand it to be implied … provided that (i) the reasonable reader is treated as reading the contract at the time it was made and (ii) he would consider the term to be so obvious as to go without saying or to be necessary for business efficacy’.
6 The English courts have adopted a more ‘purposive’ approach to the interpretation of commercial contracts following Investors Compensation Scheme Ltd v West Bromwich Building Society [1988] 1 WLR 896.
7 McAlpine Humberoak v McDermott (1992) 58 BLR 61.
8 Where a contract defines work widely, in circumstances where a contractor must complete all work for a lump sum, ‘additional’ work will not constitute a variation where such work forms part of the contractor’s overall obligation to do that work: see Williams v Fitzmaurice (1858) 3 H & N 844. The case may be different where scope of work is more precisely defined.
9 See Robert Clay, Nicholas Dennys (eds), Hudson’s Building and Engineering Contracts (13th edn, Sweet & Maxwell 2015) paras 5–024 to 5–029.
10 See Chitty on Contracts (n 2) para 14–005 and Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and Anor (n 3).
11 See Hudson’s Building and Engineering Contracts (n 9) para 5–028.
12 See, for example, Chitty on Contracts (n 2) para 2–001.
13 See Chitty on Contracts (n 2) para 4–078 referring to Collin v Duke of Westminster [1985] QB 581, [1985] 1 All ER 463.
14 The requirements for a binding contract, including consideration, apply equally to variations. Once those requirements are satisfied, the parties are bound by the agreement. See Chitty on Contracts (n 2) ch 2 and paras 22–032 to 22–039.
15 See ch 8 at paras 8.54 to 8.92.
16 It is in this context that a distinction is drawn between a ‘change’ and a ‘variation’. The words literally have the same meaning, and are often used interchangeably. In the authors’ experience it is helpful to use ‘change’ to refer to a change to the specification, which may or may not entitle the Contractor to an adjustment of the contract, and ‘variation’ to refer to a change that does describe such entitlement. However, many contracts do not use the expression ‘variation’, referring to a ‘change order’ as being the document which describes the variation.
17 Waiver is where one party voluntarily accedes to a request that he should forbear or represents that he will forbear to insist on the mode of performance fixed by the contract. See further Chitty on Contracts (n 2) paras 22–040 to 22–047.
18 For detailed discussion of circumstances in which terms may be implied see Chitty on Contracts (n 2) ch 14.
19 Waiver by conduct: see Bremer Handels GmbH v Vanden-Avenne Izegem PVBA [1978] 2 Lloyd’s Rep 109.
20 Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India [1990] 1 Lloyd’s Rep 391, 397–99; Glencore Grain Rotterdam BV v Lebanese Organisation for International Commerce [1997] 4 All ER 514, [1997] 2 Lloyd’s Rep 386.
21 See Hudson’s Building and Engineering Contracts (n 9) at para 5–039.
22 A preferential change is one which is not necessary to accord with the specification, but actually enhances the specification of the unit being built.
23 The Company’s words or conduct would need to indicate an agreement or lead the Contractor to believe that in future (as well as on the present occasion), it would agree change orders without the relevant contract formalities being followed. See Tankexpress A/S v Compagnie Financière Belge des Petroles SA (The Petrofina) [1949] AC 76, (1948–49) 82 L1 L Rep 43.
24 See Hudson’s Building and Engineering Contracts (n 9) at para 5–043. In the absence of any contrary provisions, ‘written order’ or ‘written instructions’ will be interpreted as requiring a written order prior to the work being carried out. See also Lamprell v Billericay Union (1849) 18 LJ Ex 282.
25 Hudson’s Building and Engineering Contracts (n 9) at para 5–040 discusses the various cases where it was disputed that the variation instructions satisfied the contractual requirements.
26 Nixon v Taff Railway (1848) 7 Hare 136; Taverner & Co v Glamorgan CC (1940) 57 TLR 243.
27 See Hudson’s Building and Engineering Contracts (n 9) paras 5–043 and 5–048 and Hill v South Staffordshire Railway (1865) 12 LT Rep 63.
28 See McKay v Centurion Credit Resources LLC [2011] EWHC 3198 (QB) at para 56.
29 [2011] EWHC 57 (Comm).
30 Sharpe v San Paolo Railway (1873) LR 8 Ch App 597; Williams v Fitzmaurice (1858) 3 H & N 844.
32 In the same way as the burden of proof that lies on a party who wishes to rely on an exemption clause. See Chitty on Contracts (n 2) paras 15–021 and 15–022).
33 The authors of Hudson’s Building and Engineering Contracts are of the view that generally a power to omit work or reduce the scope can only be employed where the work is not to be performed at all, not where it is to be performed by someone else. To give the work to someone else may interfere with the Contractor’s work. See Hudson’s Building and Engineering Contracts (n 9) para 5–026.