Trials and tribulations of omitted works

How does an omission of work differ from a variation? When can works he safely omitted?

It is a recognised principle of English law that in the absence of express conditions to the contrary in the contract, once a man has contracted to do a certain quantity of work, he alone has the right to do it if it is to be done at all; only if the contract so provides may the work be omitted, but only if it is not to be done at all. Conversely, if work is set out to be done by a nominated subcontractor, the main contractor cannot he forced to do it instead, nor can he insist on doing it himself.

Most standard form contracts provide that the omission of work will fall within the contractual machinery of dealing with variations, for example clause 13.1.1.1 of the JCT80. For example, the contract administrator may be permitted to instruct the alteration or modification of the quality or quantity of the works as shown on the contract drawings and described by, or referred to, in the contract bills. Instructions can be issued that require the addition, omission or substitution of any work. Difficulties sometimes arise over whether the addition, omission or substitution of any work is related to the work as shown or described in the contract, If, for example, a builder is instructed to build a detached house on a plot, and the employer requests a variation for the construction of an additional garage, that garage arguably falls within what is contemplated by the contract.

However, if the employer were to request a second house to he built on the same plot, that probably would not since it may well destroy the fundamental obligation of the contract which was to build a single house. In such circumstances, the contractor might well resist complying with the instruction, or agree a different means of financial recovery.

Unfortunately, the omission of work by way of a variation can cause even greater problems in practice. Most of the standard contract form clauses put no limit on the extent of work that may be omitted. In such circumstances the concern of the contractor will he threefold: that in omitting work he will lose an element of his profit, lose a disproportionate amount of overheads and profit and he will want to be paid an additional supplement for performing the lesser amount of the work. This often causes arguments and resort to lawyers.

In Gallagher v Hirsch (1899, New York Appeal) it was said that the word "omission" meant things left out of the contract altogether, not works taken out of the contract and given to another. This puts a tough restriction on the contract administrator/engineer, in that it must be the intention not to have any of the omitted works executed by others. A number of hares are raised:

• Is the contractor bound by any rules of valuation in respect of the omitted work and the work that he is now left?
• Can the contract administrator omit all the work if he genuinely desires the work not to proceed?
• What is the significance if the work omitted is given to others?

The essential answer is that the contractor is bound by any applicable rules of valuation in respect of the omitted work. Where the omission is genuine, he will lose an element of his profit. Basically, tough luck. Where omitted work is given to others, however, the contractor would, in most cases, be able to sue for damages.

Many variation clauses permit the employer to omit work if there are sound technical or commercial reasons - for example, a desire to postpone the work because of technical or commercial doubts about its present viability. That said, the rules of valuation would not apply in these circumstances, not least because the contractor would no doubt lose a large chunk of his projected profits. There clearly would he a time when it could he argued that the contract becomes so very different in nature and scope from that originally contracted, on account of such an omission, that the contractor is able to sue for loss of profit on the omitted work and seek a quantum meruit in respect of the work omitted. Like so many things in the law it is a question of fact and degree.