Cases - Sharpe v San Paulo Railways

Record details

Name

Sharpe v San Paulo Railways

Date

(1873)

Citation

LR 8 Ch App 597

Keywords

Contract - lump sum contract to complete the whole of the railway line - change in scope of excavation works - original plans inadequate - completion of works - whether, on the construction of the contract, the contractor ought to have considered the extent of the excavation works - whether the contractor was entitled to additional payment

Summary

The contractor engaged to build a railway in Brazil undertook to complete the whole line, with everything that was requisite for the purpose of completion, from the beginning to the end for a lump sum. The engineer's original plans were inadequate, and vastly underestimated the amount of excavation required. Nevertheless, the contractor was held liable to complete all the work as part of the original lump sum. It was held that the amount of excavation was a thing the contractors ought to have looked at for themselves and made out their own calculations.

It should be noted, of course, that as a matter of construction in this particular contract, the engineer's plans did not override the principal obligation to build the railway line. It may be that a differently worded obligation (e.g. 'build the railway in accordance with the engineer's plans') would have given rise to the risk of inadequacy of the engineer's plans falling upon the employer. Modern standard forms will attempt to allocate the risk as between the parties for the information/plans provided by the employer for carrying out the work.

One of the arguments raised by the claimants was that the defendant was bound by the (apparently vague) assurances of the engineer in relation to what was claimed to be the additional work. The Court held, finding that the work was part of the original scope, that it was in any event quite clear that the engineer had no power to vary the contract; he had power to give directions to do certain things upon the line within the limits of the contract. If the contractors thought that these things were not within the contract they were not bound to do them. The claimants could not therefore 'vary the contract and make a new and substituted contract by reason of any conversations said to have been held with the engineer'.