ContractConstruction contract - variation - basis of valuation of additional work Henry Boot Construction Ltd v GEC Alstom Combined Cycles Ltd: CA (Beldam and Ward LJJ and Lord Lloyd of Berwick): 4 April 2000

The parties entered into a contract incorporating the ICE Standard Conditions of Contract, 6th ed., for engineering works for a new power station.

After accepting the contractor's tender, the employer changed certain specifications, necessitating an alteration in the temporary works to install the pipework.

The contractor required an extra 250,880 for part of those works, which was accepted.

In fact the contractor had calculated the figure by reference to two areas while stating that it related only to one.

The employer disputed the total variation requested by the contractor.

Holding that it would not be reasonable to base his valuation of all the additional works on a price reached by a mistake, the arbitrator reached a fair valuation under cl.

52(1)(b).

The judge allowed the appeal and ordered a remission to the arbitrator to make a valuation based on the figure of 250,880.

The employer appealed.Lord Neill of Bladen QC and David Streatfeild-James (instructed by Lovell White Durrant) for the employer.

Stephen Furst QC (instructed by Taylor Joynson Garrett) for the contractor.Held, dismissing the appeal, (Ward LJ dissenting) that in valuing work not of a similar character or not executed under similar conditions to work priced in the bill of quantities, it was mandatory by cl.

52(1)(b) to base the valuation on the rates and prices in the bill of quantities unless the differences in the work carried out were so great as to render it unreasonable to base the valuation on those rates; that the rates could not be disregarded because of an error in their calculation; and that, accordingly, the arbitrator was obliged to value the variation disregarding the mistake.