194 The contract is SBC, which includes provision for sections. The employer wants to rearrange the sections. Can that be done with an architect’s instruction?
The fact that the contract is to be carried out in sections was agreed between the employer and the contractor when they executed the contract. In other words, the sections are a term of the contract. Therefore, in order to change the sections it is necessary to have a further agreement between employer and contractor. It is not something the employer can unilaterally decide, any more than the employer can unilaterally decide to reduce the contract sum by 20 per cent.
Still less can the sections be changed by the architect through the medium of an architect’s instruction. Apart from any other consideration, the architect is not empowered by the contract to issue an instruction to that effect. Therefore, any such instruction would be void.
If the employer wishes to rearrange the sections, the contractor’s consent must be sought. Even where both parties agree, the change cannot be achieved by an architect’s instruction. If the contractor is willing, the employer must organise the drafting of a special addendum to the contract setting out the variation agreed between the parties and any other matters that arise from the change (for example, it will be necessary to amend the liquidated damages). Both parties must sign the addendum.
195 The contract is SBC in sections. The dates for possession and completion have been inserted for each section. Section 2 cannot start until section 1 is finished. Is it true that possession of section 2 must be given on the due date even if it is the contractor’s own fault that section 1 is not finished?
This is a common problem when the contract is divided into sections, each with its own date for possession and completion, but two or more of the sections are interdependent. For example, a refurbishment project may be divided into three sections, but section 2 may be dependent on section 1 in a practical sense, because the contractor cannot physically be given possession of section 2 until section 1 has been completed. That is usually because the occupants of section 2 have to be moved to section 1 when it is finished. Usually, the dates for possession and completion of each section are inserted into the contract as a series of dates. The date for completion of section 1 and the date for possession of section 2 will probably be separated by a week or so to allow occupants and furniture to be moved from one section to another.
If section 1 is not finished by the completion date, even if the contractor is at fault, the contractor is still entitled to take possession of section 2 on the appointed date in the contract particulars (see clause 2.4 of SBC) because that is what the parties have agreed and inserted in the contract. If it is physically impossible for such possession to take place, the employer will be in breach of contract. The contractor is, therefore, correct.
Where a project is split into sections, any extensions of time must be given in respect of the particular section affected by the delaying event. There is no provision that the delay in one section will affect another. Therefore, even if the whole of the delay to section 1 entitles the contractor to an extension of time, it will be only section 1 that is extended and not section 2.