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Construction Law/The Contractor bears the cost of a Work without increasing the Contract Price



Hope you are OK.
I am the Engineer's CA and the Contract between our governmental Employer and the Contractor is a bespoke one which includes the following sub-article in its Particular Conditions:"The Contractor shall bear the cost of conducting soil tests and inspections and carrying out the approved recommendations related which may include the soil improvement works without any consequent increase in the Contract Price"

My question is; what is the entitlement of the Contractor in the following cases in view of the statement "... shall bear the cost of.... without consequent increase in the Contract Price":
1- The BOQ contains an express item for Soil Improvement Works (either Lumpsum item or remeasured)
2- The BOQ doesn't contain any item for Soil Improvement.
3- The BOQ contains an item which is similar to Soil Improvement Works recommended in the soil report (such as cut & fill for site grading item)

Please note that the contract is re-measured one and meanwhile it is Design & Build and the soil report is to prepared by the Contractor (a specialist assigned by him)

Thank you

ANSWER: Dear Khaled,

Sounds as if you have a mule of a contract.  You have a remeasured Design & Build Contract with a BoQ.  Somebody was confused when they wrote the Contract.  

1. The BoQ is inconsistent with the Particular Conditions.  The court would rule in favour of the Contractor and instruct you to pay the bill item.  
2. The BoQ is consistent with the Particular Conditions and no payment would be made.
3. See Q 1.

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Thank you for your reply. My further important comments on your reply are as follows:

1- In your reply on Q1; why do you see that the BoQ is inconsistent with the P. Conditions?!!
The P. Conditions' clause says that "the Contractor bears the cost of .... without increase in the Contract Price" which means that the Contractor's bearing of the cost is conditional with no increase in the Contract Price.
Such bearing the cost was not absolute, the clause didn't state that "The Contractor bears the Cost of .....".
Does applying the BoQ item increase the Contract Price? please explain.  
2-What in your opinion causes an increase in the Contract Price? Applying an item or similar one in the BoQ may do that? OR only adding a new item (variation)?
3- If you still see there is inconsistency; why we (or the court) rule for the favor of the Contractor since it is clear in the Contract document priorities that P. Conditions prevails above the BoQ?

Thank you Sir

Dear Khaled,

1. Only a variation in quantities will increase the Contract Price, since you have remeasure contract.  The contract price will vary if the measured work exceeds the bill item.  
2. See the answer to Q 1.
3. When there is a conflict in the Contract Documents, remeasure, quantity of bill item exceeded, but extra cost denied by Particular Conditions, then the courts will use the principle of contra proferentum, where they rule in favour of the supposed weaker party.  Generally the drafter of the contract is supposed to know what he wants and eliminates all conflicts.  Have a search on the internet for the phrase and associated case law.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


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