Problem: I recently completed the construction of a new building for a client who has since let the property. The contract in place was the Federation of Master Builders (“FMB”) Domestic Contract for Minor Building Work (“MW”).
During the work, we carried out numerous items of additional works via verbal instructions from the Employer which, unfortunately, was not backed-up by written consent after the 14 days permitted by the contract. The value of the additional work carried out amounts to approximately £20,000.00, and the Employer is now saying that he did not issue any instructions and therefore refuses to pay up.
Can we put this matter to adjudication and will we have any chance of securing any of the extra works not covered in written instruction?
Thank you. Raheem
Response: Hello Raheem. The FMB MW does provide for the resolution of disputes, and this can be found at clause 28 and includes conciliation and arbitration, as well as adjudication. However, for contractual adjudication to have validity (i.e. adjudication under the contract), you must ‘enact’ the provision by indicating which clause applies (28.2.1 or 28.2.2). However, failure to enact the provision will not mean that you are unable to refer the dispute to adjudication, because the contract (not being a contract with a consumer), will be subject to statutory adjudication under The Housing Grants, Construction and Regeneration Act 1996 (as amended by the Local Democracy, Economic Development and. Construction Act 2009).
Ordering changes to the scope of work comes under clause 16 of the FMB MW. Clause 16.1 states that if the Employer wants to make a change, he must confirm this in writing within 14 days. However, it is not a condition precedent for instructions to be in writing in order to receive payment, and this is underpinned by Guidance Note 11 where it states that it is only best procedure to confirm changes in writing as opposed to any mandatory procedure. In contract law, a condition precedent is where a certain part of the agreement will only come into force if and when certain conditions are met, unless that certain part is waivered. Therefore, the Employer in refusing to make payment in the absence of a written instruction, he is saying that, under the contract it is essential there is a written order for the instruction to occur, which is not the case.
In such circumstances, you have the option of pursuing the additional works under the contract or, pursuing the additional works as if there was a separate contract (although the latter is usually argued where there is an independent contract administrator employed). However, your ability in making a successful claim will come down to evidence, for example:
- Who did the Employer issue the instructions to and were there any witnesses?
- Were any of the instructions including in the interim valuations?
- Was the Employer aware the varied work was being carried out but said nothing at the time?
- Has there been any signal from the Employer that strict compliance with clause 16.1 will not be required?
In undertaking changes to the scope of works without in the first instance obtaining a written instruction, you are always at risk of not being paid, but the absence of a written instruction will not be a bar to payment.
© Michael P. Gerard
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Practising Solicitor, Barrister, Chartered Builder, Registered Construction Adjudicator & Accredited Expert in quantum and planning matters. He is based in Leicestershire.