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1、Variations in construction contracts can mean changes to the terms of the contract or it can mean changes to the scope or character of the works. In this article, Lim Chuen Ren looks at variations in construction contracts in the latter sense.Variations to the scope of construction works are necessa
2、ry because no project is impeccable and changes are required to meet unforeseen circumstances or changed requirements. Thus, variation can be in the form of additions, omissions or substitutions.Functions of Variations ClausesVariation clauses are a common feature in construction contracts. It is us
3、eful to note, at the outset, that the proprietor is not entitled as of right to direct variations ( Ashwell Nesbitt v Allan & Co (1912) Hudsons Building Contracts (4th ed) Vol 2 at page 462).Hence the need for a variation clause. Secondly, they ensure that contractors can recover payments for variat
4、ions properly directed (Knight Gilbert Partners v Knight (1968) All ER 248).Issues Concerning VariationBroadly, problems concerning variations arise in three areas: scope (was it a variation or was the contractor bound to do it anyway?);: non-compliance with procedural requirements; and3 valuing the
5、 variations.Whether the variation work is within the scope of the contract will depend, firstly, on the terms of the contract, which sometimes beg the question: what is the contract? In many cases, the documents forming the contract are defined. An example is clause 1.1 of PC-1 (PC-1, 1988 Project C
6、ontract by Property Council of Australia) which provides:ContractThe contractual relationship between the parties is constituted by:(a) the Formal Agreement to which these Conditions of Contract are attached;(b) these Conditions of Contract;(c) the Contract Particulars;(d) the Works Description; and
7、(e) the other documents (if any) referred to in the Contract Particulars.Even without such explicit provisions, it is probably true to say that the court will not confine itself to the written agreement alone in determining the scope of the contract: specifications, drawings, correspondence, etc, al
8、l form part and parcel of the contract.Having determined the contract documents, there is the further issue of inconsistencies in or between parts of the contract. Different contracts deal with theissue differently. FIDIC, in clause 5(2), provides for a priority list of documents as follows:The seve
9、ral documents forming the Contract are to be taken as mutually explanatory of one another, but in the case of ambiguities or discrepancies the same shall be explained and adjusted by the Engineer who shall thereupon issue to the contractor instructions thereon and in such event, unless otherwise pro
10、vided in the contract, the priority of the documents forming the contract shall be as follows:(i) The contract Agreement (if completed).(ii) The Letter of Acceptance.(iii) The Tender.(iv) Part II of these conditions.(v) Part I of these conditions.(vi) Any other document forming part of the Contract.
11、The JCC-D 1994 contract (section 2, JCC-D 1994 Building Works Contract without Quantities issued by the Joint Contracts Committee, Australia) provides for a similar precedence of contract documents but goes one step further by requiring the contractor or architect, if they discover any discrepancy,
12、to inform the other. The architect will then give to the contractor an instruction explaining, determining or correcting the discrepancy.Implied or Necessary WorksAs indicated, whether a particular work is a variation will depend on whether it comes within the general scope of the contract. Some wor
13、ks, although not specifically described, are nevertheless considered as implied or form a necessary part of the contract. An early case on this point is Williams v Fitzmaurice (1858) 157 ER 709. In that case, the contractor undertook to provide the whole of the material mentioned or otherwise in the
14、 foregoing particulars necessary for the completion of the work and to perform all works of every kind mentioned and contained in the foregoing specifications for the sum of 100.00 pounds. Flooring was not specifically mentioned and the issue was whether it was included in the contract. The court he
15、ld that it was.Similarly, in Walker v Randwick Municipal Council (1929) SR (NSW) 84 the contractor agreed to do and perform the whole of the works required in or about the construction of a concrete retaining wall. In performing the works, Walker had to remove a sandbank to construct the retaining w
16、all. The plan (which was not incorporated in the contract) showed the bank to be 6 feet wide. Walker claimed the bank was in fact 12 feet wide and claimed for work and labour in removing the extra 6 feet. The majority of the court held that the contract was an entire one to build a retaining wall at a fixed price and that the risk lay with contractor. Rogers J said (at page 87):The contract is not to perform the work set o
