10 Week Ten - Variation issues under the common law (Part II)

Flashcards about construction law variations.

What is a variation in construction law?

A contractual process that addresses modifications or changes to the original scope of work.

What are the key hurdles involved in addressing a variation?

Identification of the contract's base scope, defining the variation scope, procedural hurdles, and valuation of variations (time & cost).

If the original contract sum is $5m and a variation adds $1.2m, what is the revised contract sum?

$6,200,000

If the original completion date is December 1, 2025, and a variation adds 5 days, what is the revised date for completion?

December 6, 2025

In Exercise #2, what was the base scope of works under the original contract relating to the car park?

Construction of a car park for 20 cars.

In Exercise #2, how can the variation instructed by the superintendent be clearly defined?

Extension of paved area; Addition of 10 new car spaces; Adjustment of stormwater drainage. Type: Increase in scope

In Exercise #2, what were the contractual procedural requirements the contractor needed to follow upon receiving the variation instruction?

Written instruction received. Formal variation claim with time/cost impacts to be submitted within 5 business days

In Exercise #2, what risks arise due to non-compliance with the procedure related to variation instructions?

Risk of not getting paid. Risk of not getting time extension. Risk of principal arguing waiver or forfeiture of claim rights.

In Exercise #2, assuming the variation claim for $180,000 is agreed, what is the new contract sum?

$8,180,000

In Exercise #2, assuming the 5 calendar days extension is agreed, what is the revised date for completion?

December 5, 2025

If a principal asks a contractor to replace concrete with granite, but the contract doesn't include a variations clause, what are the contractor's rights?

The contractor can refuse to complete the work if the contract does not include a variations clause.

If a principal instructs 50% more pipes, doubling the work, and the contract says variations must not increase work unreasonably, can the contractor refuse?

The contractor can refuse if the contract states variations must not increase work unreasonably.

Can a party unilaterally amend a contract's terms or scope?

Unless empowered by the contract, the contractor can refuse to perform the variation.

In Ettridge v The Vermin Board, what was the result when the principal insisted on deviating from the original fence line without a variation power?

The contractor was entitled to terminate the contract.

What are the three key limitations on variation instructions?

Principals cannot fundamentally alter the scope of works; they cannot delete works and have another contractor perform them; and cannot instruct a variation after practical completion.

What is an 'Express Instruction' in the context of construction variations?

A formal written direction telling the contractor to change the work.

What should a contractor do when there's no written instruction for a variation, but the principal says 'Do it!'?

Send a claim notice explaining the change and the claim. The contractor may get paid under 'quantum meruit'.

What are the key takeaways regarding verbal changes and written instructions in construction projects?

Always get written instructions before making costly changes. If you don't follow procedure, you risk losing both money and time extensions!

What was the base scope of works under the original contract relating to the car park?

Construction of a car park for 20 cars only.

Is the instruction given by the superintendent outside the original base scope?

Yes, it was outside the base scope because it required increasing the number of car spaces.

What were the contractual procedural requirements you needed to follow upon receiving the variation instruction?

Written instruction received. Formal variation claim with time/cost impacts to be submitted within 5 business days.

Did you comply with these procedures?

No, contractor did not submit variation claim.

What risks arise due to non-compliance with the procedure?

Risk of not getting paid. Risk of not getting time extension. Risk of principal arguing waiver or forfeiture of claim rights.

What is the new contract sum?

$8,180,000

What is the revised date for completion?

5 December 2025