Basis for common law claims - Building Contract Claims - page 75

was included in the original contract, the employer will not be bound to pay
the extra price, as he will have received no value in return for the promise to
pay. This is illustrated by the case of Sharpe v. San Paulo Railway 227 . There,
the contractor submitted a lump-sum price for the construction of a railway,
based upon a quantified specification produced by the engineer, but there
was no indication in the contract that the quantities were guaranteed to be
correct. It turned out that the engineer had made an error of 2 million cubic
yards in his calculation of earthworks. The engineer promised to make other
changes in the works which would reduce the cost of the work as a whole so
as to compensate the contractor for the effect of the error. However, he
did not make the changes promised and, at the end of the contract, certified
for payment the original contract sum with no allowance for the
extra earthworks. The Court of Appeal held that, since the contractors had
undertaken simply to build the railway from terminus to terminus for the
lump sum stated, and the engineer's quantities did not form part of the
contract, the contractors must be held to have contracted to carry out
whatever work was necessary for the construction in return for the lump
sum and could not recover any extra payment for the additional earth-
works; nor was the engineer's undertaking to make compensating savings
enforceable.
An architect may only instruct such variations as the contract expressly
provides. He has no automatic right to order variations 228 . Although he acts
as agent for the employer, he has limited authority. So far as the contractor is
concerned, the authority is limited to what is stated in the contract. Where
the power to instruct is not expressed in precise terms, for example in MW
98, it will be implied that the architect can only issue instructions which are
within the scope of the contract 229 . If an architect issues instructions which
are not empowered by the contract, the contractor should not comply. If he
does comply with unauthorised instructions, he is in breach of contract.
Moreover, if the contractor does comply, it is conceivable that the architect
may become personally liable to the contractor for the price. How the
contractor would make such a claim against the architect, however, is
unclear, because, to the contractor's clear knowledge, the instruction
would concern works which are the property of the employer. Where the
architect appears to have the employer's authority to order a variation, even
if unauthorised by the employer, the employer will normally be liable to the
contractor for the price and the employer in turn will look to the architect for
reimbursement.
If the employer gives a direct instruction to the contractor, it would not be
authorised under most standard forms, which reserve the power to issue
instructions to the architect or the contract administrator (of whatever
discipline). It is often suggested that the giving and receiving of such an
instruction would create a separate little contract by which the contractor
227 (1873) 8 Ch App 597.
228 Cooper v. Langdon (1841) 9 M & W 60.
229 Sir Lindsay Parkinson & Co Ltd v. Commissioners of Works [1950] 1 All ER 208.