New instructions extending the scope of the original contract should be in writing.
Imagine, you are an M&E sub contractor and you have entered into contract with a contractor. During the works, you carry out additional work following instructions from the contractor. You attempt to extract a written order, but this is not forthcoming. Lo and behold, the contractor refuses to pay you without a written order, and you end up at loggerheads. The only thing you can point to as evidence that you were instructed is a conversation you had with the contractor’s site manager, in which he asked you, and you agreed, to carry out the works. Your contract is so worded that orders in writing are made a condition of any right to additional payment for the extra works. This is what happened to Management Solutions & Professional Consultants Limited who ended up in dispute with Bennett (Electrical) Services Limited. Management Solutions entered into contract with Bennett for electrical installation works in connection with electrical upgrading works for family houses at the RAF base in Colchester. After completion of the works, Management Solutions was left with sums of money which had been applied for, but which remained unpaid. A dispute arose concerning the unpaid sums and Management Solutions started adjudication proceedings claiming payment. The adjudicator decided in favour of Management Solutions and ordered Bennett to pay. Bennett refused. Disgruntled by this, Management Solutions issued court proceedings by way of summary judgment to have the adjudicator’s decision enforced. During the proceedings, it became clear that during the course of the project Bennett orally instructed Management Solutions to undertake certain additional works. Bennett disputed that the instructions had led to the agreed expansion of the scope of works or that the work was additional to the scope of the works. The reasoning behind this was that the contract contained a written variations clause allowing it to add or subtract from the scope of work. Thus, oral instructions fell outside the scope of this clause and the contract. Management Solutions argued that the variations clause allowed the scope of work to be varied within the limits provided for by the clause. Within those limits, the works could be varied. Oral variations were not varying the contract, they were merely instructions issued under the contract and redefined the scope of work. The judge preferred Management Solutions contentions. He said that the variations were carried out under the contract and were within its scope. Even if the variations were oral and not evidenced in writing, the work required by them was carried out and the instructions were given by Bennett. The resulting work was therefore carried out by agreement with the result that the requirement that the variations should be in writing was waived by both parties. Final thoughts The anxiety of the courts to avoid injustice to contractors caused by strict wording requiring an order in writing has led to rationalised reasons enabling contractors to recover without such an order in a number of different ways as this case shows. Nevertheless, a contractor should always ensure that orders are received in writing or evidenced in writing and preferably before committing itself to carry out the work.
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Dr. Andrew MilnerDBEnv, LLM, MSc, BSc, MRICS, MCIArb Archives
February 2023
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