Who is responsible for the additional costs and delay resulting front unforeseen

bad ground conditions - the employer or contractor/subcontractor?

If disputes are to be avoided, the contract should make it clear who is responsi
ble for the cost in terms of time and money resulting from encountering unforese
en bad ground.
In general terms, if the contract is silent on the matter and the contractor und
ertakes to construct the work for a lump sum, the contractor will be deemed to h
ave taken the risk of encountering bad ground, whether it was foreseeable or not
.
It will be for the contractor to take a view of the risk of bad ground being enc
ountered and make suitable provision in the price.
In the case of Workshop Tarmacadam Co Ltd v. Hannaby (1995) it was sunmitted, on
behalf of the contractor, that as the contract was a remeasurement contract, th
e contractor was entilted to be paid for additional work encounterd due to teh p
resence of hard rock.
The court disagreed, on the basis that if the parties had intended for rock or o
ther bad ground to be paid for as an extra, it would have been a simple matter f
or teh contract to have made it clear.
A similar situation arose in the case of Nuttall v. Lynton and Barnstaple Railwa
y Co (1899), which related to the construction of a railway for a lump sum of G42
,000.
The contractor claimed extra for dealing with rock, but the Court of Appral disa
greed when it was said:
It seems to me ... that it is an absolute contract; whether [the contrac
tor] found rock in a small degree, or whether [the contractor] found rock in a l
arge degree, the agreement was to do the work for G42,000.
Some contracts make it clear that the contractor is required to bear the risk.
The FIDIC 1999 Silver Book for Turnkey projects, under clause 4.12, makes it cle
ar that the contractor is to take the risk and include in his price for 'any unf
oreseen difficulties or costs, except as otherwise stated in the contract'.