To work out whether works, goods or services are ‘extra’ ie a change to the original scope, you need to know (1) the extent of the original scope as well as (2) how your contract defines changes/variations/extras – this can be pretty wide (eg JCT), narrow (MF/1), or non-existent (NEC).
It is best if your scope is really clear, but even then it is hard to be utterly prescriptive. That means there is often doubt about whether specific works are extras – the client may believe they were included in the original price!
The general principles for deciding if works are extras (assuming it is a lump sum contract) are:
- If the work is specifically provided for in the contract, it is not a change;
- If the work is impliedly provided for in the contract, as being within the contemplation of the parties, it is not a change;
- If the work is required as a result of the contractor’s default or fault, then it is not a change;
- If the work involves supplying materials better than those specified, at the contractor’s option, then it is not a change;
- If the contractor provides works or materials not specifically noted in the description of the works, without express or implied instructions, then it is not a change;
- If the contractor provides works or materials not specifically noted in the description of the works, under express or implied instructions, then it is a change.
- If I agree to build a house that includes the floors. (Williams v Fitzmaurice)
- If I agree to construct a whole railway that includes all the earthworks required, even if my estimate was wildly wrong. (Sharpe v San Paulo)
What should you do?
You should define the scope of the works to ensure an independent third party can decide if any works, goods or services are extras (and also to manage client expectations).
Cases: Williams v Fitzmaurice (1858) 157 ER 709, Sharpe v San Paulo Railways (1873). Both available here.