Browse Forums Building A New House 1 Feb 02, 2010 2:32 pm Hi All, We are about to commence construction with Mirvac - and there is an error in one of the Post Contract Variations. Must note that the error is a Mirvac error and that we will be over $4k better off due to an oversight on their part. The variation is signed and initailed by both the Builder and ourselves. My question is - Does this Post Contract Variation form part of the Building Agreement and therefore binding? Or are Mirvac going to find a way to get this money out of me even though they have made the mistake? Appreciate your thoughts. Thanks, Mike Re: Post Contract Variation - Contractually Binding if signed??? 2Feb 02, 2010 3:05 pm A properly drawn up contract variation, signed by both parties, is legally binding. Check your original contract... it will probably have a clause about variations to the agreement having to be agreed in writing by both parties. I think you'll be ok. Re: Post Contract Variation - Contractually Binding if signed??? 3Feb 02, 2010 3:09 pm Hi Mike, I'd suggest you have a read through some of the fine print in your original contract. In our case which is a base HIA contract, there's a clause (and i'm working here from memory) that reads along the lines of "While all due care and diligence is taken in the preparation of this contract any mistakes, errors and omissions may be resolved by way of post contract variation" Edit: This is not the case, that clause in fact related to a seperate contract we were recently involved in not the HIA building contract. So your correct in that the PCV is binding as written, however usually the builder will reserve the right to issue another PCV to correct any errors etc, its just that they are more likely too if its an error in your favour rather than one in theirs. Our Build - Places Fairhaven 23+ - https://forum.homeone.com.au/viewtopic.php?f=31&t=28045 Our Landscaping - Belial's Backyard - https://forum.homeone.com.au/viewtopic.php?f=19&t=45375 Re: Post Contract Variation - Contractually Binding if signed??? 4Feb 02, 2010 7:55 pm A post contract variation will detail what is changing, how much it will cost or save and the effect on the finishing date. One both parties sign it, it becomes part of the contract. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Post Contract Variation - Contractually Binding if signed??? 5Feb 02, 2010 9:36 pm Our builder has just noticed that they forgot to add the extra price for going from normal cement tiles to colorbond roofing. They told me that this would be a variation, however I am arguing that given that this was in the contract documentation, the signed specification and the signed drawings they have therefore already allowed for it. We have a standard HIA contract in Vicgtoria, I found a clause that states that a variation is defined as a "work change" however as there will be no change this can not be a variation. There is also a clause that states that any error in the drawings or specifications is at the builders expense. View our blog at: http://room4acubby.blogspot.com/ Re: Post Contract Variation - Contractually Binding if signed??? 6Feb 02, 2010 10:01 pm It would be ridiculous to have a contract on which "forgotten" itmes can be included later. How would anyone be able to check this! It's absurd. The contract states what will be done, for how much and when. If a builder wants to up the price, that wouldn't have a legal leg to stand on. Just reject it and tell them to act more professionally. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Post Contract Variation - Contractually Binding if signed??? 7Feb 02, 2010 10:15 pm Belial In our case which is a base HIA contract, there's a clause (and i'm working here from memory) that reads along the lines of "While all due care and diligence is taken in the preparation of this contract any mistakes, errors and omissions may be resolved by way of post contract variation" And that clause would never get through any "real" contract process...bloody HIA contract which is written to protect the builder rather than equal contractual status. Sorry common gripe of mine as I deal with professional contractors...if you screw up the contract...tough titties...they can put a variation in but the Superintendent (read owner) does not have to accept it. There's no way I would accept a pre-emptive clause which assumes acceptance of a variation. That's not to say I haven't accepted fair and reasonable variations...but the onus of evidence needs to be on the contractor (read builder)...and it better be better than..."dah...forgot". mmm....donuts Homer Simpson 1956- Links: Site Costs Ready Reckoner | H1 Addiction Medical Advice | Château TDL: The Backyard Re: Post Contract Variation - Contractually Binding if signed??? 8Feb 03, 2010 7:28 am Well said to_do_list. The HIA contract is only there to protect the builder. And clauses such as the one mentioned above would never stand up if taken to the Department of Fair Trading, etc. Builders are experts at what they do. If they haven't asked the questions and done the work to properly price it, it should be at their cost. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Post Contract Variation - Contractually Binding if signed??? 9Feb 03, 2010 12:47 pm Thanks Everybody. The issue is that they have credited us back $6.5k for carpet through the house as we are doing the carpeted areas ourselves, yet they are now saying that should have only credited for the bedrooms and the hallway at $2.5k, so therefore we owe them the difference. However we have both signed and accepted the PCV that this mistake is documented on which in my view makes it tough luck to them? Clause 17 (Variations) of our HIA contract doesnt make any mention of what happens if an error has been made, yet I have just been contacted by Mirvac to say that as it was a "genuine mistake" they will not be honouring the error they made. After contacting Fair Trading they said that as this is a contractual issue so I should seek legal advice and they cannot help. Does anybody know how much this is likely to cost me and I am right to be sticking to my guns?? They are due to commence construction within 7 working days from today..... Any advice greatly appreciated, and if there are any contract lawyers out there I'll shout you a drink if you can help me?? Re: Post Contract Variation - Contractually Binding if signed??? 10Feb 03, 2010 2:31 pm "genuine mistake". Does that mean there are "non-geniune mistakes"? What do you think is a fair credit for the carpet? Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Post Contract Variation - Contractually Binding if signed??? 11Feb 03, 2010 2:56 pm I did enquire as to whether they were in the habit of making "deliberate mistakes". Went down like a lead balloon. With regards to the credit, a fair price probably would be 3-4k. That said, we hadn't realised the error either and have subsequently spent the credit money on nicer tiles for the house and Alfresco area as well as some funky splashbacks in the bathrooms & kitchen! If we had made the mistake they would say "the contract is legally binding", so they can have some of their own medicine. I have gone over the contract 3 times now and can see nothing that allows them to rescind on a signed PCV. Still like to hear other thoughts and experiences. Cheers, Mike Re: Post Contract Variation - Contractually Binding if signed??? 12Feb 03, 2010 4:58 pm Hi Mike, In reference to my previous comments, i went back through our contract this afternoon and as it turns out that clause is included in a seperate contract we were recently involved in , not in the HIA building contract. Sorry if my comments were misleading to you. Now that said, upon inspection of the HIA contract rather than from memory. Under Interpretation of the contract , Clause 16.3 - The Builder is not entitled to claim for extra costs for errors in Plans and/or specifications that the builder has prepared. Based on that, if the PCV was issued by the builder and signed in agreement by yourselves hence it was prepared by the builder then i'd be directing their attention to that clause, assuming of course it is present in your contract. As from your description the PCV was a modification to a specification within the contract. Just to re-iterate , i'm not a legal professional in any way shape or form, my previous incorrect comments are testament to that. But it might be something you may want to look at, if its present in your contract. Other than that next stop would be to contact the building commission or consumer affairs - building department. Our Build - Places Fairhaven 23+ - https://forum.homeone.com.au/viewtopic.php?f=31&t=28045 Our Landscaping - Belial's Backyard - https://forum.homeone.com.au/viewtopic.php?f=19&t=45375 Re: Post Contract Variation - Contractually Binding if signed??? 13Feb 03, 2010 5:54 pm Thanks for that Belial. Have referred to my HIA contract and no 16.3 exists, or any clause such as the one you mention. I will contact the organisations you mentioned and have a contract lawyer look at the contract to be safe. My concern now is that they are going to become difficult and put as many road-blocks in the way as possible - is this something that tends to happen? Re: Post Contract Variation - Contractually Binding if signed??? 14Feb 03, 2010 6:50 pm Mikenrochelle I did enquire as to whether they were in the habit of making "deliberate mistakes". Went down like a lead balloon. With regards to the credit, a fair price probably would be 3-4k. That said, we hadn't realised the error either and have subsequently spent the credit money on nicer tiles for the house and Alfresco area as well as some funky splashbacks in the bathrooms & kitchen! If we had made the mistake they would say "the contract is legally binding", so they can have some of their own medicine. I have gone over the contract 3 times now and can see nothing that allows them to rescind on a signed PCV. Still like to hear other thoughts and experiences. Cheers, Mike You've spent all the money and now you've run out. Just tell the builder it was a "geniune mistake" Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Post Contract Variation - Contractually Binding if signed??? 15Feb 03, 2010 6:51 pm Mikenrochelle Thanks for that Belial. Have referred to my HIA contract and no 16.3 exists, or any clause such as the one you mention. I will contact the organisations you mentioned and have a contract lawyer look at the contract to be safe. My concern now is that they are going to become difficult and put as many road-blocks in the way as possible - is this something that tends to happen? You don't need "Clause 16.3" It's implied in any contract. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Post Contract Variation - Contractually Binding if signed??? 16Feb 03, 2010 9:37 pm Casa2 Mikenrochelle Thanks for that Belial. Have referred to my HIA contract and no 16.3 exists, or any clause such as the one you mention. I will contact the organisations you mentioned and have a contract lawyer look at the contract to be safe. My concern now is that they are going to become difficult and put as many road-blocks in the way as possible - is this something that tends to happen? You don't need "Clause 16.3" It's implied in any contract. Its only clause 16.3 because i quoted it directly letter for letter from our contract in the HIA section. Again why i suggested mike should check his specifically and why i cited the section name it was under. Saying something is implied is not the same as it being legally binding, but realistically you need professional advice if you want to take the builder to task over it. And in all honesty Casa I disagree with you, contracts rarely have anything implied thats the point of all the legalese. To outline specifics to avoid interpretation and implication, though i suppose its those areas where the lawyers make all their money. Consider the particular clause I cited is in some respects a protection for the purchaser in regards to an error made by the builder, however is not limiting in the case where the mistake is made by the purchaser. Ie, it should stop an unscrupulous builder from upping prices once fixed for no real reason, but does allow for the builder to charge for change of mind variations made by the purchaser. That said you also do need to consider the implications of doing so as you will in all likelyhood wear out your welcome with whomever was responsible for the mistake and if that happens to be your admin, well you may want to triple check everything else is exactly as you want it ahead of time, because the chances of the builder agreeing to a variation you propose unless its in their favour would be slim at best. Our Build - Places Fairhaven 23+ - https://forum.homeone.com.au/viewtopic.php?f=31&t=28045 Our Landscaping - Belial's Backyard - https://forum.homeone.com.au/viewtopic.php?f=19&t=45375 Re: Post Contract Variation - Contractually Binding if signed??? 17Feb 03, 2010 10:40 pm Contracts have lots of things implied: 1) You will not beat up the builder 2) You will not burn down the house 3) You will not pay using monopoly money The list goes on. On a more serious note, if someone makes a mistake, they pay for it. Simple. Demolition August 2009, Construction Started September 2009, Completed December 2010 Re: Post Contract Variation - Contractually Binding if signed??? 18Feb 03, 2010 10:52 pm I must admit that i get an uncomfortable feeling about benefiting from another person's mistake. I suppose most of us tend to see a difference between our dealings with an individual and a company, but the principle is the same IMHO. I will admit that I wouldn't necessarily rush to point out the builder's mistake to them. However, once it has come to light, I'd find it difficult to "dig my heels in". What I'd be tempted to do is to say something like "OK, it's your mistake and it has caused me some inconvenience and financial embarrassment as we've spent the money we thought was ours. We're willing to allow the mistake to be rectified without a legal fight at the end of the build PROVIDED we're completely satisfied about all aspects of the build". Make them pay for the mistake by ensuring you are their No 1 priority customer. I really would rather be in that position that be "the *@#$% that ripped us off" There's a genuine "give and take" relationship with a good build, and taking a legalistic hard line to score a windfall at their expense would veto that from the start. Just MHO. Cheers zeke PS, Our builder made a mistake in the specifications/plans that we signed off on. One of the best rooms in our house was meant to be the same ceiling height/proportion as one of their display homes, but the plans they drew for us had a lower ceiling height. If they followed the "letter of the law" they would've built strictly to the plans and one of the nicest rooms in our house would have been of very different proportions to our detriment. Even though major work needed to be undone to correct it as the mistake was discovered at a relatively late stage, they were willing to fix it at their cost. So, I can't entirely accept some of the generalizations and assumptions about what a builder would do if the shoe was on the other foot. Re: Post Contract Variation - Contractually Binding if signed??? 19Feb 04, 2010 9:56 am zeke What I'd be tempted to do is to say something like "OK, it's your mistake and it has caused me some inconvenience and financial embarrassment as we've spent the money we thought was ours. We're willing to allow the mistake to be rectified without a legal fight at the end of the build PROVIDED we're completely satisfied about all aspects of the build". I think that is a really good piece of advise and I can see a real benefit in taking this approach Re: Post Contract Variation - Contractually Binding if signed??? 20Feb 05, 2010 9:50 am Hi All, I have an UPDATE. Mike 1 - Builder 0 They have backed down, conceded it was their mistake and that they should have been more diligent when checking their paperwork. Thus, we do not have to pay the $4k. Result. 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