WHERE THERE IS PROVISION IN A CONTRACT THAT AN ORAL INSTRUCTION SHALL BE OF NO FORCE OR EFFECT, WILL A CONTRACTOR BE DENIED PAYMENT IF HE OBEYS AN ORAL INSTRUCTION TO PERFORM ADDITIONAL WORK?
Clause 17.0 of the JBCC Principal Building Agreement provides for the issuing of contract instructions by the Principal Agent.
A contract instruction is defined as "a written instruction signed and issued by or under the authority of the Principal Agent to the Contractor."
Sub-clause 17.3 provides that "an oral instruction issued by the Principal Agent or any other agent shall be of no force of effect. Neither the contractor nor the employer may rely upon an oral instruction for any purpose."
It often occurs that contractors are nevertheless given oral instructions and on many occasions they proceed to obey them. If no written confirmation of the instruction is subsequently given, can the contractor be denied payment in strict compliance with the above provision?
The case of Bank v Grusd (1939) addressed a similar question.
A building contract concluded in writing between the parties included a clause providing that no extra work should be done unless upon the written instruction of the owner and that no claim for extra payment should be entertained unless supported by the written authority of the owner.
The owner, a married woman, sued the contractor in the magistrates court, Johannesburg, for various amounts arising out of the building contract. The contractor counterclaimed for the payment of extras.
The magistrate found in favour of the owner on the counterclaim as follows:
" " In view of the terms of the written contract, which I find was the whole contract between the parties, and in view of the clause providing that no extra work is to be done except on the written authority of the owner, and in view also of defendant's failure to prove the express waiver of that clause which he pleads, I am of the opinion that he is not entitled to claim any payment in respect of extras."
The matter was taken on appeal before judge Maritz who came to a different conclusion, as follows:
" "In my opinion the magistrate erred in so strictly construing this clause in the written contract. In Hill v. The South Staffordshire Railway Company (12 L.T.63) a somewhat similar clause fell for construction. It provided that it should not be lawful for the contractors to make alterations, additions, or omissions without the consent in writing of the engineer. TURNER, I.J., at page 65, said the following: "It cannot, I think, be disputed that there is much difficulty in the construction of this clause. Assuming, however, its construction to be more favourable to the appellants than it has seemed to me to be, I do not think that their case would be materially assisted by it, for whatever might be the effect at law. I think there has been such conduct on the part of the company as would raise an equity against them entitling the plaintiff to payment for the alterations, additions and omissions. In my opinion, companies must, no less than individuals, be answerable to the jurisdiction of this Court in cases of fraud; and I think that, in the eye of this Court at least, it would be a fraud on the part of this company to have desired, by their engineer, these alterations, additions and omissions to be made, to have stood by and seen the expenditure going on upon them, to have taken the benefit of that expenditure, and then to refuse payment on the ground that the expenditure was incurred without proper orders having been given for the purpose."
Further, in Gorfinkel v.Miller (1931, C.P.D.251), the head-note reads as follows: "Where in terms of a building contract a builder was required to put into five cottages merely one water-connection, but following the requirements of a municipal regulation he put in five connections. Held, that the owner was liable for payment of the extra connections in that he had full knowledge that these connections were being made and that he could not have had the benefit of the occupation of the cottages without these connections. It seems to me, therefore that if the defendant proves that the plaintiff agreed that the extra work should be done, or knowing that the defendant regarded the work to be performed as falling outside the contract, stood by and allowed him to do his work, well knowing that she was going to get the benefit, she ought not to be heard when she says "I refuse to pay because I had given no written authority to the defendant to supply these extras." "
His Lordship then proceeded to consider the extra items on the basis propounded above.
"The preponderance of probability is in favour of the defendants evidence that the extra work was done and supplied at the request of the plaintiff, who verbally undertook to pay a reasonable price for them. The prices given by Mr Kaplan in evidence have not been seriously challenged and we propose accepting them.
The defendant is, therefore, entitled to payment from the plaintiff (for the extra work) in all a sum of £76.15s.0d".
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