This article gives you a wide picture of Common Mistakes of Extra Work Claims in Construction. As you may know that the Extra work is not the dispute in itself. But, it is a ground of argument and disputes which are the same as the original Construction Contract. Possible Arguments and Disputes will be 3 issues as same as the original Construction Contract and nature of construction work as below;
1-The owner claims for the delay penalty and damages.
2.-The owner claims for 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 which is required in the performance of the contract. It may caused by a bunch of reasons eg. the condition of the construction site, the need of the owner (utility, design, quality of the construction materials etc.).The difficulty of the construction.
You may not believe that it often sees the extra work in Construction has been done without a written agreement. Even in a big construction project. Verbal Agreement of Extra Work is a Common Mistake we are talking about.
Even if the Thai law does not require a written agreement for a Construction Contract (Supreme Court Judgment No. 2186/2517). That also means the law does not require to be a written agreement for extra work. But, a written agreement with signature together with clear details of terms and conditions is always the best. As well as the amendment agreement of Extra work.
However, the mistake is not only making verbal agreement for extra work. But also includes making unclear written Amendment Agreement of Extra Work.
Recommendation to Prevent the Mistake
“To give a good result of the case. At least, in the Amendment Agreement you need to give a clear picture of why extra work occurs, how it affects the original Contract, construction plan, material, equipment, Bill of Quantity, payment, defect, delay and guarantee etc. Importantly, it should be signed by both parties and before 2 witnesses.
Without a Clear Amendment Agreement of Extra Work!
Extra Work Claim either wage or damages. The Verdict of both Court and Arbitration most possible to favours the Contractor. It is because both the Construction Contract or the Amendment Agreement of Extra work are not required a Signed Contract or a 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 always better than payment under a verdict. The owner always has a liability to the extra costs as the amount of the 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 be mentioned in the agreement, the minimum interest rate under law will be applied from the date of the due payment (the date which the contractor calls for payment or the date of the delivery of the construction) until the full payment is made. That is accordance with the Section 587 and 152 of the Civil and Commercial Code and Section 85 and 104 of the Civil Procedure Code.
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