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The consequences of omitting work so as to pass it to another contractor

24 February 2016

It is an unfortunate fact that relationships between employers and contractors occasionally deteriorate, often over issues which would have been unimaginable at tender stage.

One of the consequences of this is that the employer may be tempted to invoke the provisions of the contract, permitting omission of work, and remove items from the contractor’s scope of work.   The intention being to hasten the finalisation of the relationship between the employer and the contractor in question, and permit the employer to pass these items to another contractor (with less baggage) for completion.

It must be born in mind, however, that, in terms of the common law [See Hydro Holdings (EDMS) BPK v Minister of Public Works and Another 1977 (2) SA 778 (T); Van Streepen & Germs (Pty) Ltd v Transvaal Provincial Administration 1987 (4) SA 569 (A)], unless these provisions of the contract expressly and unambiguously permit an omission for the purposes of passing on work to another contractor,  an omission must be a ‘genuine’ one i.e. it may not be for the purpose of handing the work to another contractor.

As pointed out in the 10th Edition of Hudsons’ Building and Engineering Contracts, under normal circumstances, a contractor is entitled to perform all of the contract work and, if the employer prevents the contractor from so doing, the contractor will have a remedy.  In this case the remedy would be damages, such as the loss of profit suffered as a result of the omission.

Author: Michelle Kerr, senior associate