Expectation that cost of renovation limited to fixed price contract was not realistic

Ontario civil | Contracts

BUILDING CONTRACTS

Expectation that cost of renovation limited to fixed price contract was not realistic

Plaintiff sought balance owing for extras it performed in excess of base contract. Plaintiff was general contractor on renovation to commercial property owned by defendant. Plaintiff claimed that principals of defendant or its authorized agents expressly or impliedly authorized numerous extras to contract for which it was entitled to payment on quantum meruit basis. Defendant claimed there was oral term of contract that no extras would be charged unless authorized in writing by it and that plaintiff agreed to perform some of claimed extras without compensation due to defendant’s complaints about quality of work. Judgment for plaintiff. Agreement was fixed price contract. Scope of work called for in fixed price contract comprised work listed on two-page schedule attached to plaintiff’s quotation. Defendant’s expectation that cost of renovation would be limited to fixed price contract set forth in quotation, regardless of actual extent of work performed at its discretion, was not realistic. There was no term of contract that required extras to be authorized in writing on behalf of defendant. Defendant, by conduct of principals and authorized representatives in directing extra work be performed, waived any requirement for written authorization of extras. In any event, plaintiff did provide written notice of various extras that had been performed and requested and for which it would be looking for payment. In respect of many extras claimed by plaintiff, express authorization or instruction was given on behalf of defendant to complete work. Plaintiff established it was entitled to $86,829 for extras. Defendant had not established its claim for set-off.
2016637 Ontario Inc. v. Catan Canada Inc. (Jul. 12, 2013, Ont. S.C.J., D.A. Broad J., File No. C-858-06) 230 A.C.W.S. (3d) 710.

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