Is a contractor bound by a markedly under-priced bill rate when the measured quantity turns out far larger than billed?

SCCSI
Presented by
Society of Construction Claims Specialists International
sccsinternational.org
Legal and contractual solutions - Payment

Is a contractor or subcontractor bound by a markedly under-priced rate in the bills of quantities when the measured quantity turns out far larger?

Agreed rates, mistake and a change in quantity

The instinct is to apply a low rate only up to the billed quantity and pay the excess fairly. The cases hold the opposite: an agreed rate governs the increased quantity, mistake and all.

Quick answer

Yes: an agreed contract rate governs the work, even where the quantity increases substantially and even where the rate was a mistake, so the low rate applies to the increased quantity, as Henry Boot v Alstom shows, though a quantity surveyor who spots an error on vetting should point it out

Yes. An agreed contract rate governs the work, even where the quantity increases substantially and even where the rate was a mistake. Henry Boot Construction Ltd v Alstom Combined Cycles Ltd went the same way, the Court of Appeal holding that a mistaken rate still governed a variation, because the contractual requirement of reasonableness went to the process of applying the rate, not to the rate itself, so the parties were stuck with the rate they had agreed. There are two qualifications: a quantity surveyor or engineer who spots an error while vetting a priced bill should draw it to the contractor's attention, or the contractor may become entitled to an adjustment; and the rule addresses errors in the rate, not a change in the nature of the work, so in Aldi Stores Ltd v Galliford moving material from one category to another, where both rates were nil, gave no variation.

The ruleAn agreed rate governs, whatever the quantity turns out to be
MistakeGenerally irrelevant; reasonableness goes to applying the rate
Henry BootA low or mistaken rate still governed the increased or varied work
Vetting dutyAn error found on vetting should be drawn to the contractor
AldiMoving nil-rated material between categories gave no variation

The rest of this solution is for members

Fifty of the two hundred contractual solutions are free to read. This is one of the remaining hundred and fifty, which Premium and Pro carry.

See what Premium includesAlready a member? Sign in