CLAIM

INTRODUCTION
Claim can be defined as A request, demand, or assertion of rights by a seller against a buyer, or
vice versa, for consideration, compensation, or payment under the terms of a legally binding
contract, such as for a dispute change.

A construction claim consist of two major parts:

The entitlement section, which typically includes a detailed description of the
actions or inaction of the party from whom relief is sought, entitling the claimant
to compensation
The damages section, which sets forth the calculations and support for the
compensation claimed.
Claims arise on many construction projects. A great deal of emotion and anxiety is
wasted by parties to a construction dispute because claims are often not fully and fairly
documented and properly presented. A well organized and documented claim has a far
greater chance of success in convincing a contract payer that payment is fair and
reasonable in the circumstances.
REQUIREMENTS OF A SUCCESSFUL CLAIM

Many contractors harm their credibility in providing verbose, complicated, emotionally

charged and over reaching claims without addressing the primary requirements for a
successful claim. These include:

Recognize when a potential claim arises and provide timely notice of the claim in
accordance with the terms of the contract;

Determine the facts;

Establish entitlement/identify the applicable contract provision or law/establish

liability;

Establish causation;

Calculate damages in accordance with the contract; and

Negotiate or adjudicate the claim.

VARIATION
INTRODUCTION
A variation (sometimes referred to as a variation instruction, variation order or change
order) is an alteration to the scope of works in a construction contract in the form of an
addition, substitution or omission from the original scope of works.
Almost all construction projects vary from the original design, scope and definition.
Whether small or large, construction projects will have inevitably depart from the original
tender design, specifications and drawings prepared by the design team. This can be
because of technological advancement, statutory changes or enforcement, change in
conditions, geological anomalies, non-availability of specified materials, or simply
because of the continued development of the design after the contract has been awarded.
In large civil engineering projects variations can be very significant, whereas on small
building contracts they may be relatively minor.
Variations may include:
Alterations to the design.
Alterations to quantities.
Alterations to quality.
Alterations to working conditions.
Alterations to the sequence of work.
Variations may also be deemed to occur if the contract documents do not properly
describe the works actually required.
Variations may not (without the contractors consent):
Change the fundamental nature of the works.
Omit work so that it can be carried out by another contractor.
Be instructed after practical completion.
Require the contractor to carry out work that was the subject of a prime cost sum.
In legal terms, a variation is an agreement supported by consideration to alter some
terms of the contract. No power to order variation is implied. Hence there should be
express terms in contracts which give the power instruct variations. In the absence of
express terms in the contract the contractor may reject instructions for variations without
giving rise to any legal consequences.
Standard forms of contract generally make express provisions for the contract

administrator (generally the architect or engineer) to instruct variations (for example,

FIDIC Clause 51.1). Such provisions enable the continued, smooth administration of the
works without the need for another contract. Variation instructions must be clear as to
what is and is not included, and may propose the method of valuation.
Valuation of variations
Variations may give rise to additions or deductions from the contract sum. The
valuation of variations may include not just the work which the variation instruction
describes, but other expenses that may result from the variation, such as the impact on
other aspects of the works. Variations may also (but not necessarily) require adjustment
of the completion date.
Variations may be valued by:
Agreement between the contractor and the client.
The cost consultant.
A variation quotation prepared by the contractor and accepted by the client.
By some other method agreed by the contractor and the client.
Valuations of variations are often based on the rates and prices provided by the
contractor in their tender, provided the work is of a similar nature and carried out in
similar conditions. This is true, even if it becomes apparent that the rates provided by the
contractor were higher or lower than otherwise available commercial rates. They do not
become reasonable or unreasonable by the execution of variations (see Henry Boot
Construction v Alstom (2000).
In some contracts, when rates are applied to the valuation of variations, the contractor is
not able to claim for additional payments in relation to profits and overheads.
If similar types of works to those instructed by a variation cannot be found in the
drawings, specification or bills of quantities, then fair valuation of the contractors direct
costs, overheads and profit is necessary.
Conflict can also arise when a sub-contractor qualifies that, for example, Supply &
Fixing of Door is included but Supply & Fixing of Ironmongery is excluded. A
reasonable sub-contractor should foresee that a door cannot be fixed without hinges
which is a part of the ironmongery.
So even if ironmongery is excluded, the sub-contractor cannot expect a variation for any
of the items required to fix the doors.
PROCEDURE FOR CLAIMS ARISING FROM VARIATION

when there is a variation in a contract, the conmtractore will recieve a writen

confirmation from the Architect in other to carry out the work.
when the work has been completed, the contractor will value the variation.
a memo will be prepared by the contractor, ;
- the nature of the variation
- date of issue of the variation
- cost of carrying out the work.
the memo will be sent to the client for approval along side the valuation of the variation
and any other doccument required as an evidence to back up the variation claims.
after the confirmation ofn the claim by the client, the consultant Quantity surveyor will
then add the valuation of the variation in the next valuation of the project for payment to
be made.

Below is a Format for claim on variation after work was done

below is an example of valuation of a project including the valuation of a

variation carried out by the contractor.

Conclusion
Claims arising from variations are often sources of dispute (either in valuing the
variation, or agreeing whether part of the works constitute a variation at all) and can cost
a lot of time and money during the course of a contract. Whilst some variations are
unavoidable, it is wise to minimize potential variations and subsequent claims by
ensuring that uncertainties are eliminated before awarding the contract.
This can be done by:
Undertaking thorough site investigations and condition surveys.
Ensuring that the project brief is comprehensive and is supported by stakeholders.
Ensuring that legislative requirements are properly integrated into the project.
Ensuring that risks are properly identified.
Ensuring that designs are properly coordinated before tender.
Ensuring the contract is unambiguous and explicit.
Ensuring the contractors rates are clear.
Preparing concise drawings, bills of quantities and specifications, providing for all
situations which are reasonably fore-seeable.