We summarise the outcome of the High Court case ruling against Kingston-upon-Thames RBC and which landlords may need to take action and when, regarding compensation for overcharging water bills.
Contract variations can be a risky business!
In the fourth part of our series on contract management pitfalls, we look at the risks arising from varying the terms of construction contracts.
You might think that having negotiated a contract, it would not be necessary to vary the terms during delivery of the works or services. However, there are occasions when it is appropriate to vary contractual mechanisms. For example, adjusting key performance indicators (KPIs) and incentives, or adjusting the final account mechanism if works are due to continue beyond the expiry of a term service contract.
We often see disputes arise out of a misunderstanding of the consequences of a variation, or where one party wishes to revert to the original contract terms.
The case of Mears Limited v Shoreline Housing  1396 (TCC) highlights some of the difficulties that can arise. In this case, the parties agreed to change the schedule of rates contained within the contract (with the new rates referred to as the “Composite Rates”), but they didn’t agree a formal contractual variation. A dispute arose as to the correct value due to Mears, with Mears calculating payment based on the Composite Rates and Shoreline applying the rates tendered by Mears in the schedule of rates. The Technology and Construction Court agreed with Mears that the Composite Rates applied, requiring Shoreline to pay the higher rates.
How to manage the risk
There are two ways to mitigate the risks of contract variations:
- Firstly, ensure that the contract is managed in accordance with the written terms of the contract; and
- Secondly, ensure that any contract variations are captured clearly in writing and signed by all parties. It is particularly important to document the full extent of the variation, including identifying any additional payments, when those payments are due and the value of those payments.
It is also important to consider whether the variation has any implications under the Public Contracts Regulations 2015. Seeking support from legal advisers to review (or draft) the variations and comment on the procurement implications of any variation, can also assist in managing the risks.
For more information
It is important to remember that when it comes to selling services, you must deliver on your promises.
Under section 3(1) of the Health and Safety at Work Act (HSWA) 1974, organisations are obligated to avoid public health and safety risks through the conduct of their business.
How does a media-savvy employer ensure a season of festive cheer but without mishap, damage to their reputation or harassment and bullying claims?
Providers need to be alive to the risk of contractors becoming insolvent and how to limit the resulting inevitable disruption.
Housing associations must continue to deliver core functions effectively and compliantly notwithstanding the uncertainty over the standards to which you will be held in the future.
Over the last few years the meaning of “asset management” has changed from being all about repairs to understanding that assets might not stay in an organisation forever.
The Grenfell Tower tragedy has understandably prompted a fundamental reconsideration of how building safety is approached for High-Rise Residential Buildings.
Results from the latest three-yearly valuation of the Local Government Pension Scheme (LGPS) are starting to trickle through.
The potential for Brexit with or without a deal causes uncertainty, and credit rating agencies do not like uncertainty.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.