Cases - Abbey Developments Ltd v PP Brickwork Ltd

Record details

Name

Abbey Developments Ltd v PP Brickwork Ltd

Date

[2003]

Citation

EWHC 1987

Keywords

Contract - variations - express term entitling employer to increase or reduce scope of work - whether employer entitled to determine contract

Summary

Abbey engaged PPB as a labour-only subcontractor for brickwork and blockwork. Clause 2 of the subcontract conditions empowered Abbey to increase or reduce the quantity of work. The question was whether this enabled the employer to determine the entire subcontract.

The Court considered that a contract for the execution of work confers on the contractor not only the duty to carry out the work, but the corresponding right to be able to complete the work which it contracted to carry out. The work has to be defined for there to be a right to execute it. To take away or to vary the work is to be considered an intrusion into and an infringement of that right and a breach of contract. Hence, contracts contain provisions to enable the employer to vary the work in order to achieve lawfully what could be achieved without breaking the contract or by a separate further agreement with the contractor. By entering into a contract with a variations clause, such further agreement is obviated, as the contractor's consent to changes in the work is in the primary contract.

However, the Court considered that provisions entitling an owner to vary the work have to be construed carefully so as not to deprive the contractor of its contractual right to the opportunity to complete the works and realise such profit as may then be made. Reasonably clear words are needed in order to remove work from the contractor simply to have it done by somebody else, whether because the prospect of having it completed by the contractor will be more expensive for the employer than having it done by somebody else, although there can well be other reasons such as timing and confidence in the original contractor.