2022-03-23（190）Engineering law and the ICE Contracts

(a) In a lump sum contract (p. 27) errors not discovered by the employer or engineer before the tender is accepted, whether in rates, extension or totalling, bind the contractor in relation to the original contract work, which is paid for at the actual lump sum price in the tender. In valuing extras—and in a quantities contract additional quantities—it seems on balance that errors in rates only are included, since the price for extras is excavating 750 cube yds. in rock was priced out at £75, i.e. 2s. per cube yard. A fair and reasonable price would have been £2 per cube yard. It was not known beforehand whether or not rock would be met, but in fact 2,230 cube yds. of rock was excavated. The architect (under a contract in the R.I.B.A. quantities form) valued the excavation at 750 yds. at 2s. (i.e. the original extension of £75) and the balance at £2 per cube yd. Held: the contractors were entitled to 2s. per cube yd. only for the whole quantity excavated.

calculated on the basis of the individual rates and there does not seem to be any reason to apply to extra work a mistake made by the contractor in calculating his price for the original contract work from his rates. Omissions and substitutions are dealt with as in the case of intentional deductions (N. 6). 

For the omission of a rate, see p. 187.

It has been argued that in this case the discovery of the error by the employer does not alter the legal position, and that he may still keep the contractor to the mistaken price. The argument is that the contractor’s offer as to price is the lump sum stated in the tender and is the offer which the contractor intended to make; that it is immaterial that his reason for offering to do the work at this figure was his mistaken belief that it represented the correct total of correct rates and calculations in his bill of quantities, particularly since the bill is completed for pricing variations only. The mistake is said to be on a par with the case of a contractor who prices the bill as he intends but bases his rates on bad costing, in which case, of course, the employer may validly accept the tender even if he realises that the contractor’s price is uneconomic.

This argument is artificial:

Employers directed their quantity surveyors to prepare a bill of reductions of a contractor’s tender. Because a reference letter was misplaced, there was an error in the total of the bill. The contractor’s re-tender for the reduced work with a lump sum price was accepted. Held: that “the intention of the parties…was that the tender for the original amount of the priced section less the priced bill of reductions should be accepted. The sum of £167,000 was erroneously taken to be the figure and erroneously embodied in the (re-tender and) contract” and was therefore rectified to the correct figure.