Variations/Change Under the JCT – Back to Basics 10
Variations are extremely common in Construction Projects and despite the mechanisms which exist in the standard forms they often lead to disputes between parties.
Under the JCT there are two possible terms that are in use depending on the Contract. “Change” which are included in the JCT Design and Build Contract (“D&B”) and “Variation” in any other JCT Contract.
Regardless of the terminology used Changes/Variations are defined as additions, omissions or the substitution of work or the alteration of any materials or goods. A Change/Variation can also be due to the Employer or Architect/Contract Administrator (“Employer”) limiting access, working space, working hours or the order of the execution of the works.
An Employer may issue an instruction for a Variation/Change under Clause 3.5 (D&B) and 3.10 of the Standard Building Contract (“SBC”). Should the Contractor not implement the instruction, the Employer has the right to issue a notice to the Contractor which after 7 days allows the Employer to employ others to complete the instruction and the additional costs can be deducted from the Contractor.
It is not a specific requirement under the JCT for a Contractor to provide notification of a Variation/Change however it is recommended that parties maintain good practice and do so to remove any ambiguity.
Should an instruction be given by the Employer in any other format than in writing, the Contractor under Clause 3.7 (D&B) and Clause 3.12 (SBC) can confirm the instruction to the Employer. Should the Employer not respond in 7 days, the instruction becomes effective.
Contractors should value works in accordance with the Valuation Rules which can be found within Clause 5.4-5.7 of the D&B and Clause 5.6-5.10 of the SBC.
There are different headings within the Valuation Rules along with sub-sections within each heading depending on the Contract in use, however, the general rule is that where the additional or substituted work is similar and carried out in similar conditions, the rates (if any) included within the Contract should be used.
Where the works are carried out under different conditions or is not similar to other works in the contract “fair rates and prices” are to be used. Whilst this sounds simple, the word fair can often be very subjective so we would recommend that as much detail to support any rates used, such as labour allowances or material prices, is presented to ensure that Contractors give themselves the best chance of a successful claim.
Whilst the standard wording within the JCT Contracts refers to notices being issued as soon as possible, please check any amendments t make sure there are no “Condition Precedent” clauses which have been introduced.
Finally, unlike the NEC there is no obligation for the Variations/Changes to be assessed within a certain amount of time, therefore having the potential to be left to run. We would recommend that Contractors ensure that they are applying the necessary pressure on the Employer for engagement in discussing the Variations/Changes.
In our forthcoming Article we will look at Change / Variation in far more detail.
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