One change too many

Is there any position for the American concepts of “Cardinal Changes” and “the cumulative impact doctrine” in English Law? 1 Lewis Cohen and Jonathan Miller2 Introduction Almost without exception every form of construction contract allows for variations. English case law3 has dealt with this subject in great detail, as can be seen from the lengthy chapters on this area in the latest editions of Keating on Building Contracts and Hudson’s Building and Engineering Contracts. The need for variations is self-evident. There will always be some form of change in a building contract for a variety of reasons; a change of design by the Employer and the need to accommodate unforeseen ground conditions are two of the more obvious examples. This paper looks at a specific point where the American legal system has developed beyond English contract law and analyses whether the advances made in American Law can be implied into English contract law. The development in question concerns the effect of a series of changes to any given contract with the result that the contract becomes fundamentally different from that which the parties had initially entered into. This development is contained within the two American concepts of “Cardinal Changes” and the “cumulative impact” doctrine. These two concepts allow a contractor to establish that a series of variations can combine to form a breach of contract so significant that it results in a termination of the contract. This is something which on first consideration has no place in English Law. This paper will consider whether there is room for either concept in English Law and if not how this issue is dealt with. The American Position The following definition of Cardinal Changes is taken from a 1978 case and is as follows: “Under established case law, a cardinal change is a breach. It occurs when the government effects an alteration in the work so drastic that it effectively requires the contractor to perform duties materially different from those originally bargained for. By definition, then, cardinal change is so profound that it is not redressable under the contract, and thus renders the government in breach.”4 The doctrine started as a principle of United States Federal Law, developed by the caselaw of the United States Court of Claims. It was a doctrine developed for a practical purpose:

This paper was first published in Construction Law Journal Vol. 18 No. 5 in 2002 Lewis Cohen is a solicitor in the practice of Speechly Bircham and Jonathan Miller is a barrister in the chambers of Desmond de Silva QC (1 Essex Court) 3 References to “English Law” are shorthand for the Law of England and Wales but not Scotland and Northern Ireland. 4 Allied Materials & Equip. Co v United States 569 F.2d 562.


mistake of law) are not very different in the United States from those which would apply in England and Wales. Thus. giving just consideration to the magnitude and quality of the changes ordered and their cumulative effect upon the project as a whole. is not well defined by the American courts and tribunals. In such circumstances. there does not seem to be any conceptual reason why it should not be of more general application. A further utility of the doctrine became apparent after US government contracts began to include standard “termination for convenience” clauses. which have the effect of excluding government liability for loss of profit by limiting recovery after repudiatory breach to a quantum meruit for work done (that is very much a summary of a complex area). or an unwanted and inconvenient limitation on recovery under the contract. unfortunately.(a) (b) (c) US government contracts invariably contain a standard dispute clause providing for a determination of disputes arising under the contract by an administrative procedure. Wunderlich Contracting Co v United States 351 F. This doctrine is not as clearly defined as the doctrine of “Cardinal Changes” but in effect the basic idea of the doctrine is as follows: “The basic idea of this doctrine is that the cumulative impact arising from not one.2d 956 (a965) at p 966 . In normal circumstances. Although the doctrine of Cardinal Changes may not be relevant to any discussion concerning English Law in its own right. There are obvious attractions for use of the doctrine in any situation where a party seeks to avoid an unwanted and inconvenient dispute resolution clause. The doctrine. after or instead of the administrative dispute resolution provided for in the contract). Although the doctrine evolved as a practical response to the specific provisions of US government contracts. they are not necessarily indistinguishable. the claimant must demonstrate cumulative impact rising to the level of a cardinal change.”6 5 6 This definition has been suggested in correspondence between one of the authors of this paper and a US Construction Lawyer. a contractor could recover loss of profits if it could bring itself within the cardinal change doctrine. The usual criteria for such review (fraud. it is needed to assist in understanding the second and potentially more relevant doctrine known as the “cumulative impact” doctrine. and some American courts and tribunals have held that to prevail with a cumulative impact claim. while the two doctrines may be related. capriciousness. The cardinal change doctrine enabled government contractors to by-pass the administrative determination-judicial review route and go to a Federal Court for trial on a claim for damages (either before. that administrative determination can then only be challenged by way of judicial review. Indeed from discussions with American Lawyers it seems there is anecdotal evidence that the doctrine of Cardinal Changes is no longer exclusively applied to cases where it is the US government effecting the alteration and the concept may be applied to construction contracts that do not have a governmental body as a party. but many changes occurring throughout the change order process in combination results in an adverse effect on the construction process and unforeseeable costs. absence of evidence.”5 The “cumulative impact” doctrine appears to have its origins in decisions of the US Court of Claims which emphasised that the issue of a cardinal change was a question of fact and that “Each case must be analysed on its own facts and in light of its own circumstances. gross error.

not a separate doctrine. Air-A-Plane claimed breach of contract by the US government. Air-A-Plane had entered into a fixed price contract with the US Army Chemical Corps to make smoke generators to a detailed specification. However. 7 Coleman v S & W Baldwin [1977] IRLR 342. but instead will focus on the way in which English Law deals in practice with the problem thrown up by these two doctrines and in particular the “cumulative impact” doctrine. There is no distinction made between contractual relations which involve the state and a private entity and those between two private entities. The Court of Claims decided in a preliminary hearing that the issue was entirely arguable at trial. with the effect (it was said) that production was disrupted and the contract took on the aspects of a design or development contract rather than a fixed price supply contract. not in themselves necessarily repudiatory breaches. there is only one recorded situation under English contract law (that the authors are aware of) where the issue of “cumulative changes” has been approached in any other way. can be found in the case of Air-A-Plane Corporation v the United States (408 F. the law of the United States does not restrict the doctrines conceptually (nor practically) to relations between the Government and private individuals. The contract had a “Changes” provision reserving the right to the Government to order changes. This occurred in the context of employment law and is arguably analogous to the American position. This paper will not comment in substance on the mechanics of these two American doctrines. It has been accepted that incremental changes in an employee’s duties. as stated above. There a number of these deriving from Common Law or Statute such as “fitness for purpose” and “satisfactory quality”. There are three in particular that are relevant in the context of this paper. Before we consider the areas of breach of contracts and the specifics of construction contracts it is worth restating certain basic aspects of the law of contract starting with the law of implied terms. although the Court was also clear that it was dealing with a species of cardinal change. As an aside.2d 1030 (1969). The English Position The first point to make (and it is a point which can be stated categorically) is that the concept of Cardinal Changes does not exist in English Law. which dealt with the important matter of smoke generators. English law does provide for the situation where a party effects an alteration in the work so drastic that it effectively requires the contractor to perform duties materially different from those originally bargained for. a decision of the Employment Appeal Tribunal . each justifiable under the contract. but there is no distinction with respect to the Government. can amount in the round to an intention on the part of the employer not to be bound by the contract of employment and therefore amount to a repudiatory breach7.An example of the potential cumulative impact of many changes. Implied Terms One way in which English contract law protects any party to a contract is the mechanism of implied terms. In fact. after the contract was signed over 1000 changes were made.

& S. Performance “The general rule is that a party to a contract must perform exactly what he undertook to do” (Chitty 22-001). There is. there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances under which alone the arrangement can become operative. This principle will only be implied into a contract where the subject matter of the contract requires both parties to co-operate to give efficacy to the contract. 14 10 . 852. Rescission – Substituted Contracts The next area to consider is that of rescission. The test the Courts apply is the standard test as to whether it is equitable and reasonable in all the circumstances. 68 Luxor (Eastbourne) Limited v Cooper 1941 AC 108 Stirling v Maitland (1864) 5 B. In brief the law expects that parties enter any given contract with the mutual expectation that the contract can be performed. This general rule has been moderated by the concepts of partial performance and substantial performance which are not addressed within this paper. This principle is taken further in a separate implied term that the parties will co-operate to ensure the performance of their bargain. 64. This is summed up in the 1864 case of Stirling v Maitland10 as follows: “If a party enters into an arrangement which can only take effect by the continuance of a certain existing state of circumstances. ‘Defendant preventing complete performance’ as follows: “If the other party to the contract wrongfully prevents the claimant from completing his performance.There is a principle known as the “Moorcock principle”8 which states that the law raises “an implication from the presumed intention of the parties with the object of giving to the transaction such efficacy as both parties must have intended that all events it should have”. or alternatively sue upon a quantum meruit to recover a reasonable remuneration for his partial performance. the claimant may either recover damages for breach of contract. one specific point made in this section by Chitty that is directly relevant to the subject matter of this paper is contained at paragraph 22-036.9 Furthermore there is also a doctrine that implies a term that a party will not do an act which. if done.P. 840.” It must be remembered that the Courts will only imply these terms into any given contract after an examination of the facts in question and these last two terms will not be implied into every contract. Rescission in its most basic form is where neither party has performed the whole of his obligations and there is a mutual agreement to rescind the contract.D.”11 The question of what would be the ‘appropriate measure of damages” is discussed further below. Chittty sets an explanation of where rescission can be 8 9 The Moorcock (1889) 14. Such a rescission can be express or implied. 11 Planché v Colborn (1831) 8 Bing. however. would prevent fulfilment of the contract.

The change must be fundamental and the “question is whether the common intention of the parties was to ‘abrogate’.”12 12 Smith v Salt Lake City 104 Fed. neither of which in Hudson’s opinion involves any change in the permanent work. the contractors may recover the reasonable value. ‘supersede’. or ‘extinguish’ the old contract by a ‘substitution’ of a ‘completely new’ or ‘self-subsisting’ agreement”” There are two very obvious points to make about this paragraph.implied where the parties have effected such an alteration of the terms of the contract to substitute a new contract in its place10: “The question whether a rescission has been effected is frequently one of considerable difficulty. a narrow definition distinguished from the wider American concept of changes. ‘rescind’.Rep. the cost for which the Employer will be responsible. if only a variation. If a rescission is effected the contract is extinguished.457 (1900) . For all other work and materials required by the alterations. to such modifications of the work contemplated at the time of making the contract as to not radically change the nature or cost of the work or materials required. Instead a variation in English law represents an alteration instructed by the Employer or his agent. notwithstanding the agreement. Variations Moving on to the topic of variations. Hudson does accept that work might be called a variation to allow an employer to obtain the benefit of a contractor’s prices or his presence on site whilst the work in question could not be regarded coming within the contemplation of the variations or change clause in question. Hudson quotes a 1900 American case which states that the usual “scope” of variation clause: “…is limited by the subject-matter and intention of the parties when it was made. the definition of variations adopted is that employed by Hudson (at 7 – 001). This leads Hudson onto a discussion of the word “scope” and “work falling outside the scope”. or. First the test relies on the parties’ intentions and secondly the test is highly subjective. inconsistent with it to an extent that goes to the very root of it. It is a narrow definition and applicable specifically to construction contracts. if not entirely inconsistent with it. for it is necessary to distinguish a rescission of the contract from a variation which merely qualifies the existing rights and obligations. which allows for modification of the contract price and obligations. it continues to exist in an altered form. A variation according to Hudson is “an alteration in the previously described work and materials to be provided by the contractor”. Furthermore the phrase “from all the surrounding circumstances” is very vague as well as being highly subjective. Rescission will be presumed when the parties enter into a new agreement which is entirely inconsistent with the old. adopting a wide description of scope as including not just the original contract work but also the legitimate variations and changes ordered throughout the contract. The decision on this point will depend on the intention of the parties to be gathered from an examination of the terms of the subsequent agreement and from all the surrounding circumstances.

this implies that at some stage the contractor would be entitled to refuse to obey the instructions. as applying only to work ordered within the scope of the clause. they would appear to be a good summation of the current position in English Law. it is submitted. be justified on the basis akin to frustration of the contract. and re-pricing of the whole could only. (ii) If the request is purportedly given under the variation clause and the contractor complies without objection. there are the following comments on the second. The sixth principle is important. those requiring written instructions as a condition precedent. as this is the clearest commentary available on the English perspective on the “cumulative impact” doctrine. This claim does not appear to have succeeded in England or the Commonwealth. (iv) “On the strict basis of interpretation applied to exclusion clauses.080 at pages 929-930 (Hudson 11th edition) . it is not certain that a contractor will always be estopped from claiming an alternative right to payment after the works have been carried out. Turning to the fourth principle. it is not totally certain what point Hudson is making but it seems that unless a variation is ordered within the contractual mechanism provided. (v) If work outside the scope is carried out. each of which is individually admitted to be within. the scope of the clause. 13 The full propositions can be found at paragraph 7. (vi) “If a claim is advanced to re-price the whole contract because of multiple variations or changes”. he will be estopped from subsequently claiming any right to payment other than under the terms of the contract. then the original pricing mechanism should only be departed from with respect to the work outside the scope and not any part of the original contract works. the contractor will be entitled to recover a reasonable price for such work outside of any contractual mechanism for payment (i.e. the courts will construe restrictive provisions. (iii) If the request is made without any reference to the variation clause then the contractor will be entitled to reasonable remuneration on the basis of an implied reasonable price under a separate contract. Dealing with the second principle first. fourth and sixth principles.” Although these six submissions are largely unsubstantiated by case law and represent editorial opinion. It is possible to think of examples where due to “efficacy of contract” or undue influence/duress a contractor would carry out works without objecting at the time. so enabling the contractor to recover a reasonable price for work outside its scope free of any such restrictions”. However. and has been rejected in many reported cases in the Court of Claims in the United States. for example.Hudson concurs with this position and sets out six submissions which follow on from this point and are paraphrased for the sake of brevity as follows13: (i) The contractor will be entitled to refuse to carry out the instruction. on a quantum meruit basis). but in total alleged to be outside.

from those obtainable under the clause. enabling the Court to award damages for breach and consequential loss not recoverable under the strict terms of the changes clause. Hudson makes the point that for an entitlement for a quantum meruit payment to arise there must be a new contract and cites Lord Dunedin in The Olanda14as authority: “As regards quantum meruit where there are two parties who are under contract. accepts payment and subsequently contends that he is entitled to quantum meruit. is that in building and engineering projects which are of necessity often prototypical. with the possible exception of rare cases where it is no longer possible to trace. and it should be understood in that context. and that the finding of “cardinal change” was basically jurisdictional. Hudson is keen to note the following: “… no claim was made that the project as a whole required to be revalued or repriced. One of the major obstacles that contractors have to overcome. Instead a “variation” that instructs work “outside the scope of the contract” need not necessarily terminate the original contract but may form a separate contract in addition to the original contract. the variation in question is unlikely to constitute a change outside the scope of the contract unless and until the contractor takes some form of stand on the matter. let alone “outside the scope” alterations of the work.” The final comment made by Hudson that is applicable in this instance is a practical point. identify and separate the original and the altered parts of the work. one of which is drawn from an American case concerning the contract for the construction of an aircraft hangar for the US Government13. including requirements of form.Hudson then turns explicitly to the question of pricing works outside the scope which is reproduced here in full: “It is sufficient to say that. The position in Keating is greatly simplified as follows.” It is suggested that Hudson is too dogmatic on this point. Too often the contractor works to the change. “Scope” arguments. quantum meruit must be a new contract. or to secure a valuation of such work as has been carried out outside the scope of the variation clause at reasonable prices differing. and free also of any other restrictions. and in order to have a new contract you must get rid of the old one. which might have applied to “within the scope” variations it is submitted”. even in a case of a repudiatory breach of contract by the owner.B. A number of examples are cited. 13 The Olanda [1919] 2K. will at best do no more than enable a contractor either to refuse to carry out the work at all. 728 . a contractor will be unable to make such a claim unless he has accepted the repudiation and rescinded the contract. therefore. where appropriate. In this case the Court of Claims found that the changes were of such a magnitude that they constituted a “Cardinal Change” with the effect that they were not within the scope of the contract and were therefore a breach of contract and the contractor was entitled to new prices for the work.

The initial trial judge in this case found that there had been a multitude of breaches which amounted to a fundamental breach of contract. Keating cites a Canadian and a Scottish case as authority where the Courts have considered a claim that the entire case should have been revalued but have rejected the proposition. American and Commonwealth courts and confirms the law as stated throughout this note with respect to subjects such as quantum meruit. L.R. As a point of interest this case considers much of the case law generated by the English. It is worth noting that one Court of Session Judge dissented on this point on the basis that repudiation was not needed before the works had been completed since there might be situations where the effect of the employer’s breach might not become known or properly understood until the works have been completed. The trial judge therefore found that although the contractor continued the work and completed the contract he was entitled to have treated the contract as terminated and was therefore entitled to payment on a quantum meruit basis. The earlier of these two cases is Morrison-Knudson v British Columbia Hydro and Power Authority15.“Where there is a contract for specified work but the contractor does work outside the contract at the employer’s request the contractor is entitled to be paid a reasonable sum for the work outside the contract on the basis of an implied contract. 67 .L. There is nothing in the full case note in Construction Law Journal which suggests that the court would have departed from the common law principles of repudiation of an entire contract and quantum meruit being the correct measure of damages if the facts had so required. The case follows both Morrison-Knudson and Humberoak closely. The second and more recent case is the case of ERDC Construction Ltd v HM Love & Company and others16. also reported at (1991) 7 Const.R. This case was heard by the Scottish Court of Session (equivalent to the English Court of Appeal). Two findings in particular are of interest. First.L. It arose out of an arbitration which was concerned primarily with what constituted the essential nature of a quantum meruit claim. This was appealed to the British Columbia Court of Appeal. (3d). where the claimants had not promptly elected to treat the contract as determined they were not entitled to claim a quantum meruit whether in whole or in part. They upheld the appeal on the basis that the contractor had elected to continue with the contract and therefore payment was limited to recovery under the contract. Secondly. The case did not have to consider the issue of repudiation of an entire contract and what damages would flow from such a repudiation as the Court found that there had been no fundamental breach. 227 ERDC Construction Ltd v HM Love & Company and Others (1994) 70 B. Discharge by Frustration 15 16 Morrison-Knudson v British Columbia Hydro and Power Authority (1978) D. J. the Court of Session determined that a claim for quantum meruit was a claim which was inconsistent with the continuing existence of a contract. The Court found that for quantum meruit to apply the contract must have been rescinded or discharged so that the mutual obligations had ceased to exist.15 Keating notes that Parkinson’s case was only concerned with payment for extra work and was not a case that the entirety of the contract works should have been revalued.

” The test for frustration requires that neither party be in default. For the breach to allow discharge. If the breach gives rise to a claim that can be made under the contract (e. The current test applied in English law is that laid down by Diplock LJ: 17 18 Davis Contractors v Fareham UDC [1956] A. the breach must “go to the very root of the contract”. A breach of condition will allow the innocent party to consider himself discharged from his contractual terms. Non haec in foedra veni.The subject of frustration is touched on briefly for the sake of completeness. Not all breaches will give rise to a discharge. It was not this that I promised to do.g. HL McAlpine Humberoak v McDermott International (No1) (1992) 58 BLR 1 . Keating gives as examples clause 26 JCT – Loss and expense and Clause 52 ICE – provision for variations. This has also been described as “affecting the very substance of the contract” or “frustrating the commercial purpose of the venture”. A breach of an intermediate term may allow an innocent party to treat himself as discharged.C. Although frustration is not relevant to this discussion it is raised to show that it can be discounted. However. As a final point on frustration. Furthermore. It is important to determine whether the breach is of a condition or an intermediate term. foreseeability will often preclude the possibility of frustration and therefore it is close to impossible to argue frustration arising out of an instruction purporting to be under a building contract. The first consideration is what has been breached. Chitty describes this as fundamental and both Chitty and Keating refer to the Humberoak18 case on this point. Self-induced frustration occurs where a party seeks to rely upon a discharge from contractual obligations where the basis of the discharge is frustration due to his own conduct. The standard test for frustration is laid down in Davis Contractors v Fareham UDC17where it was stated that frustration: “occurs wherever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. 696. In such circumstances these rights will be in addition to and not in substitution of common law remedies for damages for breach of contract. The first and most important point to consider is whether the claim is made under the contract or is for breach of contract. This is not an easy position to adopt in the context of the potential frustration arising out of a single instruction or series of instructions. breach of contract will create a different mode of claim. the phrase “self-induced frustration” is often misapplied in circumstances such as these. liquidated damages for late completion) then the contractual mechanism will be utilised. Keating also makes the point that many building contracts give contractors contractual rights to additional payments in circumstances some of which might otherwise be breaches of contract by the employer. Discharge by Breach This section effectively follows on directly from the analysis on variations above.

These are not detailed here. breach by the contractor or frustration. · Failure to give possession of the site. materials. · Employment of additional contractors. Keating at 6-89ff lists out examples where the actions of an employer amount to a repudiatory breach of contract. Damages The position on damages seems to be straightforward. one can easily see an argument that issuing such instructions would fall under the heading of rendering completion under the contract impossible by issuing instructions to the degree that if those instructions were followed the contract as originally signed would be rendered impossible to achieve and therefore the contract has been repudiated. 26. overheads and profit. However. · Rendering completion impossible. a reasonable sum would be assessed by reference to negotiations as to price. it is clear from the above principles that the contractor may be able to treat the contract as discharged by relying on repudiation by the employer. Keating suggests that quantum meruit will normally be left to the courts to determine and that the courts would not be expected to adopt the rates previously utilised in the repudiated contract. 66. Turning to the second limb of damages. · Order not to complete the works. If the employer prevents completion then one of two approaches will be adopted (these are not mutually exclusive). Instead. If the work as instructed was capable of being carried out under the contract. 19 Hongkong Fir Shipping Co. McGregor on Damages notes with surprise that there is no English case which deals with the measure of damages where the employer acts in such a way to bar completion (16th edition paragraph 1154 at page 755). expert evidence on the cost of labour. quantum meruit has already been touched on above in the section on variations.B. but essentially they are three different ways of awarding the contractor the costs incurred to date together with an allowance for loss of profits on the residue of the works which he would have carried out. prices in a related contract. v Kawasaki Kisen Kaisha Ltd [1962] 2 Q. These include: · Refusal to carry out obligations under the contract. Keating does not give an example which is even analogous to issuing instructions outside the scope of the works. First the contractor will be compensated for the loss of profits and secondly he will be paid for any work carried out under the “new contract” further to the instruction to carry out work “outside the scope” of the original contract. in a scenario like this the court will happily adopt the rates from the original contract and ask the contractor to demonstrate why he would be entitled to an uplift. However.“Does the occurrence of the event deprive the party who has further undertakings to perform of substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should obtain as the consideration for performing those undertakings?”19 This leads on to a discussion of non-completion where the cause may be prevention by the employer. it will be priced under the contract. . Concentrating only on default by the employer. He sets out three different methods for compensating the contractor.

and (b) English law recognises neither the concept of Cardinal Changes nor the “cumulative impact doctrine”. Conclusions It is strongly arguable that the US doctrines of “Cardinal Changes” and the “Cumulative Impact theory” do not exist in English Law. English Law has developed a complex approach to allow Contractors and Employers a series of mechanisms for ascertaining their contractual rights and remedies. The leading judgment was that of Lloyd LJ. This frustration led to a substituted contract and therefore McAlpine had a reasonable time to complete the works (i. . McAlpine sued claiming delay and McDermott counterclaimed alleging defective workmanship. Although the case turns on its facts the following can be put forward as a summary of the current position in English law: · To establish a repudiatory breach of contract a single variation must require the work ordered to be so far outside of the “scope of the contract” that the change order goes to the route of the contract and is a fundamental change to the contract. However in their place and particularly with respect to the minefield that is the law of “variations”.McAlpine Humberoak This case is not “on all fours” with the American concepts of “Cardinal Changes” and the cumulative impact doctrine but does seem to be the nearest that English Law has come to dealing with these issues. quantum meruit). He accepted that the number of drawings may have allowed McAlpine an extension of time but he did not see that the contract had been distorted. He found that the contractual machinery had not been displaced and most tellingly there could not be frustration where the frustration was brought about by reasons of matters provided for in the contract itself. He found that that the large number of drawings did not constitute a breach by McDermott. This case establishes 2 principles in English law: (a) that a series of variations will not in itself constitute a breach of contract. This was appealed successfully on the facts. time was at large) and they could do this for a reasonable cost (i. A specific variation could. The Judge at first instance (largely of his own accord) found that the large number of drawings had distorted the substance and identity of the contract with the result that it was frustrated. McDermoott issued a large number of drawings and McAlpine issued a large number of technical drawings in reply.e. Humberoak concerned a contract between McAlpine and McDermott for the construction by McAlpine of nine steel pallets to form part of a weather deck for a tension leg platform in the Shetland Basin. From the beginning the job did not go smoothly.e. It is conceivable that a number of variations when taken together could likewise constitute a fundamental change but this point has not been advanced in any English case law and whilst not precluded by Humberoak would effectively be new law. · A series of variations will not constitute such a fundamental change.

L. A Contractor faced with a contract in delay (and the Employer and its agents) will need to have a clear understanding of the critical time path and the impact of variations on the contract.cohen@speechlys. As practical advice. At best one (or more) variation/change order will be deemed to stand outside the contract and therefore form a contract by itself with payment on a quantum meruit basis. The authors of this paper have formulated the following questions to assist the parties in determining where they stand under (or outside!) the contract: · Were any of the instructions outside the scope of the original contract? · Were such instructions acceded to? · Were such instructions performable? · If yes then there was no breach just “extras” under contract – if no what did the contractor do? · What price mechanism was adopted? · If there was a new contract did they price on quantum meruit or did they adopt the pre-existing pricing mechanism by common dealing? Lewis Cohen. If their involvement can be construed as interference then they may allow a Contractor to argue that one (or more but on a separate basis) variation/change instruction was so far removed from the scope of the contract that it constituted a repudiatory breach of This article was written with Jonathan Miller of 1 Essex Court 20 Cohen & Browning (1998) 14 Const. This would then allow the contractor to argue for payment under a new contract on the basis of quantum meruit.Whereas the American Contractor often tenders with cost and time certainty. in most cases be hard to argue that the entire contract has been repudiated. Construction & Engineering Group lewis. This will be heavily dependent upon an analysis of the factual matrix and as a general rule of thumb it is contended that it will.257 . “The Pre-Tendering Process Revisited”20) English Contractors are more often than not subject to the vagaries of applying for variations under their contracts. Solicitor. 251 . Employers must be educated as to the effect that their requirements will have once a contract is under way. This is most crucial when they seek to rely on Employer interference to justify Extensions of Time Applications which if the fail to achieve will result in the flip side of the coin namely the deduction of Liquidated Damages. by the very nature of the tender process in English Law (c.f. J.