When we negotiated the contract with our builder he agreed that certain prime cost (PC) items would be included in the price. When he sent the contract it did not include these items. We questioned this and the builder said to send him a list of the missing items and he will attach the list to the contract. We did this by email. We are now in dispute with the builder for building defects and he has invoiced us for ‘variations’ to the contract that include listing the PC items. Can he do this?
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
Answer by Rob Brook, Newcastle 2300 NSW
- Prime cost items are allowances in the contract for the supply of necessary items that have not been finally selected such as door knobs or kitchen taps.
- You need to show that the list of PC items were part of the contract.
- Is there any evidence in writing, such as email correspondence, showing that prior to both you and the builder signing the contract, the PC items were accepted as included?
- If not, was your email listing the PC items sent to the builder soon after the contract was signed and did it refer to the agreement that the items were included as part of the contract price?
- Did the builder ever respond to that email and say anything that indicates one way or another whether he accepted the PC items were part of the contract?
- Generally an oral agreement that does not form part of the written contract cannot be relied on. However if you can show by evidence that the oral agreement was understood by both parties to be part of the contract and was not recorded by mistake you can resist the builder’s claim for variations.
- You are best to gather your evidence together and get formal advice from a building and construction lawyer.