This article gives you a wide picture of the common mistakes in extra work claims in construction. As you may know, the extra work is not a dispute in itself. But it is a ground for arguments and disputes that are the same as the original construction contract. Possible Arguments and Disputes: There will be three issues as per the original construction contract and the nature of the construction work, as below:
1. The owner claims the delay penalty and damages.
2. The owner claims defects and damages.
3. The contractor claims for the extra costs and damages.
Therefore, If you are looking for deep detail of each claim, the related article, Defect Claim and Delay Claim may be more useful to you.
What Does Extra Work Mean?
In this article, extra work means work arising outside of and independent of the contract, something not required in its performance. Also, additional work is required in the performance of the contract. It may be caused by a bunch of reasons, e.g., the condition of the construction site and the needs of the owner (utility, design, quality of the construction materials, etc.). The difficulty of the construction.
Common Mistake
You may not believe that it often happens that extra work in construction is done without a written agreement. Even in a big construction project. Verbal agreement on extra work is a common mistake we are talking about.
Even if Thai law does not require a written agreement for a construction contract (Supreme Court Judgement No. 2186/2517). That also means the law does not require a written agreement for extra work. But a written agreement with a signature and clear details of terms and conditions is always the best. As well as the amendment agreement on extra work.
However, the mistake is not only making verbal agreements for extra work. But also includes making an unclearly written amendment agreement for extra work.
Recommendation to Prevent the Mistake
“To give a good result to the case, at least in the Amendment Agreement, you need to give a clear picture of why extra work occurs and how it affects the original contract, construction plan, material, equipment, bill of quantity, payment, defect, delay, guarantee, etc. Importantly, it should be signed by both parties and witnessed by two witnesses.
Without a Clear Amendment Agreement of Extra Work!
Extra Work Claim: either wage or damages. The verdict of both the Court and Arbitration is most likely to favour the contractor. It is because both the construction contract and the amendment agreement for extra work do not require a signed contract or form. Also, it is easy for a contractor to provide evidence of the causes of extra work and costs.
Payment for the sum of the agreement is always better than payment under a verdict. The owner always has a liability for the extra costs based on the amount of evidence provided to the court. On top of that, the interest rate will be calculated according to the maximum interest rate under the construction agreement. If the interest rate hasn’t been mentioned in the agreement, the minimum interest rate under the law will be applied from the date of the due payment (the date on which the contractor calls for payment or the date of the delivery of the construction) until the full payment is made. That is in accordance with Sections 587 and 152 of the Civil and Commercial Code and Sections 85 and 104 of the Civil Procedure Code.
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