Amending Standard Contract Forms

A developer’s contract department had amended the EOT provisions in the Standard PAM 2006 form by omitting the exceptionally inclement weather provision. What is your advise as the project architect during the Tender stage?

It is easy not to notice that VO is the most important clause in the contract. In the absence of an expressed provision for variation, any instruction issued to modify or alter the original scope of work will entitle the Contractor to end the contract. Subsequently the contractor is no longer bounded by the contract rates and could make the subsequent claims based on ‘quantum meruit’. Therefore, clause 11 of the PAM 2006 Form in general, empowers the Architect to issue instruction ordering a variation without vitiating the contract.

I can’t help but to notice the trend in sidelining architects in the formation of tender/contract documents by some clients (apart from the contract drawings itself). In some projects, we were not even involved in the tender evaluation. Big clients have their in-house legal department to advice, but some of the things coming out of their ‘customised contract’ could rather be ironic. I think it’s prudent to just use the standard PAM forms. Since you’re paying an Architect to administer the contract, you might as well use a form he is familiar with.

Perhaps less liability without fees discount could be healthy to the architects, and perhaps it brings new meaning to Mies Van de Rohe’s “less is more”. However, when the client or other consultant choose to assume certain ‘traditional architect’s responsibility it is prudent to have the decisions documented. In today’s corporate world, we often see key personnel change due to merger and acquisitions or for various other reasons.

But if we may conclude, the industry should be made aware of the consequence of making amendments to standard forms of contracts that it may turn the administration of the contracts a real nightmare. Inconsistencies abound and the varying interpretations are a fertile source of disputes, and possibly the consequence to the two contracting parties is that millions of ringgit may be at stake.

Recent development in the English courts also suggest that the Employer is obliged to draw the attention of the contractor on any onerous conditions at the time the contract is entered into, otherwise they may be unenforceable. (Worksop Tarmacadam v Hannaby [1995])

Another point to note in dealing with amended forms is that, Architects should read thoroughly all the addendums made in the contract and be aware on how the changes affect their scope of empowerment. Architects should be mindful not to grant EOT or instruct variations beyond their contractual ambit, as such act could be regarded as ‘ultra vires’ and could expose the architect directly liable under tort.