The construction industry caters to the need for buildings, infrastructure, and industrial facilities arising globally. From planning to execution and finally closure, a construction project includes a myriad of activities to build an asset. These activities involve the development of a new building, expansion, or extension of an existing establishment and/or repair work. Thus, the need for extensive construction contracts arises.
A construction contract is an agreement between a client and a contractor to perform certain construction services in exchange for a previously agreed-upon sum of money.
Scope of a construction contract
The scope of a construction project should always be clearly defined in a construction contract. However, even in the most comprehensive construction contracts, the client may ask for additional work to be rendered which is not covered in the original contract.
The contractor is only obligated to perform the work specified in the construction contract and no extra work. The scope of work covered under a construction contract can be used to ascertain whether the work done by the contractor is as per the agreed-upon terms of the contract or not. For any work other than what is covered under the scope of the contract, the contractor can claim compensation under “ Quantum Meruit” as extra work.
Quantum Meruit Compensation
If the client specifically asks the contractor to perform additional work other than what is agreed upon in the construction contract, this extra work falls under the “Quantum Meruit” category. The contractor can claim compensation for the same as it was not covered in the original scope of work defined in the contract.
The primary consideration in such cases is whether the client/owner asked the contractor to perform the additional work or was aware of the additional work being performed by the contractor and approved this action. If the client approved the additional work, he is liable to pay the compensation for the same.
However, if the contractor performed the additional work or ordered any extra materials on-site without the approval or the knowledge of the client, he is not entitled to any compensation for the alteration of the scope of work.
In cases where the work done by the contractor falls explicitly outside the scope of work defined in the original contract, an arbitrator can grant additional payment to the contractor. However, the scope might sometimes not be defined clearly, resulting in the contractor losing out on the additional payment and as a result, losing his profit.
Difference Between Additional Work and Extra Work
The main difference between the additional work and extra work in a construction project is the fact that additional work is done under the terms of the contract and extra work is done outside the terms of the contract. This means that the contractor cannot claim any compensation for the additional work but can claim compensation for extra work done outside the scope of the agreement. This extra work is sometimes covered under a completely new agreement.
In conclusion, it is essential to define the scope of work in a construction contract with absolute clarity. Any ambiguity in the scope can lead to losses being incurred by one of the parties involved in the agreement.