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Unachievable variation to a contract?

Unachievable variation to a contract?

Postby Thomas&22 » Fri Feb 26, 2016 7:19 am

A & B enter into a contract to build a factory. A gives B a schedule which has a start date and end date. The agreed completion time is 52 weeks.

3 days prior to the agreed start date A gives B a revised schedule which reduces completion time to 36 weeks.

B objects to this revised schedule as he cannot physically complete job in revised timeframe. A refers B to the contract which has a clause which reads:

“The date for commencement of the Works on Site will be: As Per Agreed Schedule, (schedule annexed to this order). Contractor A reserves the right to alter at any time. A copy of any revised schedule must be issued by A to B. Period required for written notice from A to B to commence the Work on Site is 5 Working Days.”

Note: annexed schedule states 52 weeks.

-Is this a fair contract term? B cannot physically complete the works in the revised time frame and would not have taken the job on. Unfortunately B did not spot this contract term.

- B needs to commence the work as he has employed contractors, and bought materials etc. Not starting it would have financial implications.

-If B commences work knowing that he is physically unable to complete in the revised timeframe, what remedies could A seek against B. E.g. Could A use a Set off clause like the one below to not pay the agreed price. (Hypothetically if this was in the contract let’s say)

Payment Set Off Clause
(1) Without prejudice and in addition to any other rights and remedies which A may possess, if any sum of money shall become due and or payable to B by A under this Contract it may be deducted by A from any sum or sums then due or which at any time thereafter may become due to B under this Contract or may recover the same from B as a debt.
(2) Without prejudice and in addition to any other rights and remedies which A may possess, if in the bona fide opinion of A:
(i) there has been any breach of and/or failure on the part of B to observe the provisions of this Contract with A; and
(ii) such breach and/or failure has caused or is likely to cause the A to incur loss, damage, expense or cost;
then, pending final termination of the matter in arbitration or litigation, or alternatively agreement between A & B, B shall forthwith pay or allow the A such sum as the A shall bona fide estimate in writing from time to time to be the amount of such loss, damage, expense or cost.


Thank you. :)
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Re: Unachievable variation to a contract?

Postby atticus » Fri Feb 26, 2016 9:43 am

Construction contracts can be long and complicated documents - the simpler JCT documents are still 50 or 60 pages long, and there can be bear traps hidden in places the unwary may not think to look.

There may be added complications - I think you are describing a contract between contractor and sub-contractor, and the employer may have rights in all this.

The construction industry is full of sharks, always looking to stuff the subbie.

This calls for legal advice.
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Re: Unachievable variation to a contract?

Postby Thomas&22 » Fri Feb 26, 2016 10:07 am

Thank you. yes is the type of contract you describe. will get legal advice.
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Re: Unachievable variation to a contract?

Postby atticus » Fri Feb 26, 2016 10:14 am

An alternative source of advice may be a good construction consultant. You need someone who really knows his way around these contracts. Fred Smith & Co on the High Street will not do.
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Re: Unachievable variation to a contract?

Postby Hairyloon » Fri Feb 26, 2016 10:21 am

Thomas&22 wrote:will get legal advice.

As long as you do, we can continue to discuss it.

Is it not implied into any contract that the terms of the contract remain within the possible? Thus to attempt to vary the contract into the impossible would be a breach thereof.
Although what is, or is not possible may often be a matter of opinion, especially in construction.
OP should check his insurance to see if he has legal cover or anything else useful.

On the question of whether this is an unfair contract term, I suggest that the term itself may not be fair, but it is being used unfairly.
I could not comment on whether that falls within the rules of fair contracts.
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Re: Unachievable variation to a contract?

Postby atticus » Fri Feb 26, 2016 10:39 am

There should be no messing around here. The contract is to build a factory. There will be hundreds of thousands of pounds at stake. The consequences of getting it wrong may be catastrophic. If you can afford to get into this kind of contract you can afford to get proper advice, or at least you cannot afford not to.

It is possible that the variation clause described refers to the commencement date and not the entire programme of works.
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Re: Unachievable variation to a contract?

Postby Thomas&22 » Fri Feb 26, 2016 12:49 pm

Thank you all, this forum is excellent for helping to steer folks in the correct direction.

atticus - the start has been delayed which is fault of A not B. Therefore, in it appears that order to make up some ground A has altered the time frame for the entire programme reducing it by several weeks.

New start date is imminent. So will get specialist advice asap.

Last query.. If B starts work has he accepted the revised timeframe.
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Re: Unachievable variation to a contract?

Postby atticus » Fri Feb 26, 2016 1:18 pm

not necessarily.
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Re: Unachievable variation to a contract?

Postby dls » Fri Feb 26, 2016 10:35 pm

It is possible that the variation clause described refers to the commencement date and not the entire programme of works.


More than possible I think.
If it is a standard construction contract, each clause and subclause will have been litigated. There should be an answer.
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Re: Unachievable variation to a contract?

Postby diy » Sat Feb 27, 2016 6:38 am

Can the definition of completion be defined? or rather redefined?

Also can A alter the schedule after the works have begun?
My suggestions are not legal advice
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