Claims Class followers will know that the above comprises the essential elements to a successful claim i. Interested in learning more about claims?
Our newest e-course The Perfect Claim gives you the knowledge and skills to prepare successful claims, every time. Notify me when new comments are added or someone replies. This site uses Akismet to reduce spam. The employer may of course activate its right to vary for many reasons, not least because it simply changes its mind as to what it requires. Situations sometimes arise where the nature of the change that the contractor has to implement, and the manner in which it comes about, are such that the contractor is entitled to compensation under both provisions: that is, as a variation and as a claim.
For example, the different methods of calculating quantum may incentivise the contractor to choose to claim under one compensation provision rather than another.
Equally, the contractor may be able to demonstrate that the formal procedure has been followed under one of the contract provisions but not the other. For example, the contractor may have an instruction from the employer but has not given a notice, or vice versa. In order to illustrate the possible overlap between these two types of provision, it is useful to consider a couple of examples from the standard forms.
If a contractor working under a JCT Standard Building Contract, Edition SBC form of contract has restrictions imposed on its working space by the employer for example because another contractor needs access , then it would normally expect to seek compensation as loss and expense under clauses 4.
However, the SBC defines variations in such a way as to cover not only changes to the permanent works but also alterations to the manner in which the works are undertaken.
Clause 5. Therefore, under clause 5. The employer would have to instruct the change in order for the contractor to have a right to payment as a variation. The SBC is very amenable in this regard and defines a variation instruction widely. Therefore, where the contractor has had its working space impeded then an email from the employer after the event recognising this fact may be sufficient to establish a claim as a variation. The contractor may then be able to choose whether to claim as a variation or loss and expense.
A decision that may be dependent on whether the contract rates are more favourable than actual cost. However, it is often the case that ground conditions clauses under civil engineering contracts can provide a wide scope for compensating contractors where the conditions encountered are different from those contemplated. Clause 4. It is entitled to the additional costs it may expend in doing so.
Suppose a pipe laying contractor was constructing a trench and unexpectedly hit rock. The most appropriate method of proceeding may be to change the line and level of the trench. The possible overlap between claims and variations is an issue that both parties under a contract should be alive to. The age old problem of the lack of an instruction may be avoided if the contractor can base its entitlement on a claims clause, where no instruction is required. These forms of contract effectively use the same procedures for both instructed changes to the scope of works and employer risk events or site discoveries that trigger extra payment.
An interesting feature of some of the claims procedures discussed in this post is that a change to the scope may be effectively sanctioned despite the fact that no instruction has been issued.
In my next post I will consider another contractual procedure which sanctions change without formal instruction: deemed variations. If Employer accepts the delay costs would he issue a Variation Order or would that normally another form of formal acceptance? If a contractor has a claim for delay costs then it will typically need to give notification of the claim.
Any claim associated with delay will often have two aspects to it — a claim for an extension of time and a claim for the additional costs.
In most construction contracts, the client and the contractor agree on how additional work or alterations will be compensated. When a variation claim happens, it means the contractor is demanding these existing provisions set up in the contract be enforced. On the other hand, a change order is requesting an entirely new set of accommodations to be set up for compensation and added into the contract.
Simply put, a change order is an alteration of a contract while variation claim is the contractor or client claiming the other party must uphold what was already agreed upon.
Because a variation claim is a request to uphold a part of your construction agreement, you as the contractor must make sure your contract allows for variation claims at all.
This should go without saying, but it happens more times than it should: make sure your math is correct. You can never be too detailed in a variation claim. Skip to content It is common within the construction industry to see confusion between claims and variations, as the word claim is often, misunderstood in a construction context.
What is a variation? The employer can activate the variation clause for many reasons, with most variations taking the following forms: An instruction to delete works; An instruction to carry out additional works; and To change a specification, location, method or sequence of works.
What is a claim? Differences between variations and claims As such, there are important differences in the way the variation and claim provisions operate. A variation will normally alter the permanent works. The discovery of unforeseen ground conditions may result in a change to the plant or equipment that is being used on site; Late handing over of the site may result in a delay that effectively results in the same permanent works being undertaken but over a longer period of time.
In conclusion Variations are typically, instructed to the contractor and are clearly identified and evaluated following the rules provided for in the contract. Disclaimer The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice.
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