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Underestimated costs in tender through life of contract

+1 vote
476 views
A subcontractor has come to a main contractor 2 months before their part of a contract is complete and requested departure from original estimate as they require more money to complete on time. Where would the main contractor stand legally?
asked Jan 5, 2015 in JCT Contracts by james an inquisitive student  
   

1 Answer

+1 vote
Under contract law, it is tough on the subcontractor : they should have got their original estimate and hence offer correct !

This assumes there are no Contractor owned risks (i.e. claims and variations) which have caused the increase in Subcontractor costs. If there are, then the Subcontractor could make a claim under the contract.
answered Jan 5, 2015 by Jon Broome (23,720 points)  
A lump sum contract means, as Jon says, that it is tough on the subcontractor. The same rates are used with variations whether they are too high or too low.

Departures can sometimes be agreed as a variation to the contract where there are other benefits like being able to finish at all. More money might be available if the main contractor wants the subcontractor to accelerate completion (which is currently in delay). But don't bet on it!