An instructed variation is not the only way a contractor’s work under a project can be altered. Equally it is not the only contractual ground for the contractor to claim additional compensation. Construction contracts will normally also contain provisions allowing the contractor to make “claims”. For example, the site conditions may be different to those contemplated, such as unexpectedly bad ground conditions or restrictions on site access. Alternatively, the employer may fail to fulfil its obligations, such as providing design information or approvals late.
In each of these situations an event (or a discovery relating to the site) that is the employer’s risk under the contract, may result in the contractor undertaking the works in a different way as well as increasing its costs. Such events will typically give rise to a right to extra money (and possibly time) either under a particular clause of the contract or under a general claims provision, such as a loss and expense clause.
A comparison between variations and claims is interesting for a number of reasons, not least because of the possibility that the contractor may have a right, in certain circumstances, to choose which provision it relies upon to claim additional compensation. Continue reading
