Our new book, Construction Contract Variations, is the only current text that deals exclusively with the subject of changes to the scope of works on a project. This is surprising in view of the wide range of disputes which turn on issues that relate to variations.
Change to the scope of works is at the heart of most disputes on construction projects. At the most basic level this leads to disputes about variations themselves – which can involve disagreements about the valuation of a variation or even whether the work is a variation at all. Such disputes are what we would generally regard as forming the typical variation account.
Disagreements about variations will also be at the centre of disputes that fall outside the variation account, such as those concerning delay, disruption, defects and termination. The very question of whether an item of work is within the contract scope that the contractor is obliged to undertake, or whether it is an extra, is at the heart of many of these other disputes. Delay may have been caused by certain works, but whether this is the employer’s responsibility or the contractor’s will depend on whether it forms part of the contract scope. The same goes for loss and expense claims where disruption has been caused to the works as a result of alleged “extra” work.
Such disagreements about what the scope of work consists of will also lie behind disputes concerning defects. For example, the correction of a defect will often involve changing the design. But the parties will often disagree as to who is responsible for the change. The employer may argue that the contractor’s scope includes responsibility to change the design to the extent that it is defective, and that therefore this extra work is within its scope and not a variation. On the other hand, the contractor may argue that it is only obliged to undertake the works as described in the technical documents and that the design change represents a variation.
In many of these situations a stand off can arise between the parties. After all, a contractor will typically not be entitled to be paid for extra work undertaken unless it has been formally instructed in advance. The contractor may therefore refuse to undertake the item of work in question unless and until the appropriate variation order has been issued. If the employer refuses to issue the variation instruction on the basis that the work is within scope (and therefore not required), an impasse may arise. In extreme circumstances progress may be halted – leading, in turn, to allegations of contract repudiation or termination.
The legal issues that relate to variations have implications that stretch far wider than the traditional variation account.
Our new book on variations is intended to fill a clear gap in the market. Whilst there are several books on other specific construction law topics (such as delay, disruption, defects and design), there are no current texts on variations despite this being such a common source of disagreement.
The book therefore analyses in detail the way in which the courts and other tribunals will examine inconsistencies and errors in the contract scope of work when seeking to determine whether certain work is within a contractor’s obligations. It considers the extent to which design responsibility compels a contractor to carry out extra work that is not specifically referred to.
The employer’s right to change the works is examined and the degree to which this may be curtailed because the nature of the extra work is beyond that envisaged by the parties. The book considers what constitutes a variation instruction and the extent to which the contractor may be able to establish a claim for extra money and time in the absence of a formal order.
We hope that the book will help those in the industry who are engaged in seeking to resolve problems concerning variations – whether this is a humble variation account or a major project failure which has at its heart a disagreement about the scope of the contractor’s work.