Last edited 21 Dec 2017

Payment for extra work

Building works are complex, and it is common for a contractor to carry out works not described in the original contract documents for which they consider they are entitled to additional payment over and above the original contract sum. However, the fact that a contractor has carried out extra work does not automatically mean they have a right to payment for it.

The exact conditions under which additional payment is merited should be set out in the terms of the contract, however, generally, the contractor must be able to prove the following:

  • The contract sum does not include the additional work.
  • There was an express or implied promise to compensate the contractor for the work.
  • The work was instructed by an authorised agent.
  • Any conditions precedent to payment, as imposed by the contract, have been fulfilled.

For example, where the contractor has carried out extra work or uses superior materials to those specified, but they have not been instructed to do so, this will not entitle them to extra payment. Similarly, if the employer agrees to different work, they will not necessarily be liable for any additional payment if they were not informed of the increased costs involved.

Generally, in an emergency situation where a contractor pays a sum to preserve the employer’s property, and has not been possible to obtain instructions from the employer, the contractor will be entitled to additional payment.

If the employer refuses to provide additional payment for extra work, the contractor may refuse to carry out the work. If the employer promises the additional payment, and it later transpires that the work is included in the original contract sum and so is not ‘extra’, the promise to pay will generally not be binding.

Even if the employer has had the benefit of extra work, in the absence of written instructions, it is generally held that the contractor will be unable to recover payment.

The contractor should consider whether what they think is ‘extra work’ is provided for by the clauses of the contract.

Typically, contracts provide for changes to the works described in the contract documents through variation clauses. A variation (sometimes referred to as a variation instruction, variation order or change order) is an alteration to the scope of works in the form of an addition, substitution or omission from the original scope of works. Variations may also be deemed to occur if the contract documents do not properly describe the works actually required.

Variation instructions must be clear as to what is and is not included, and may propose the method of valuation.

For more information see: Variations.

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