posted on 2022-11-03, 12:41authored byConor Francis Joseph Mooney
This thesis studies the consideration requirement for verbally-made contract
variations in Irish construction contracts, and proposes how this specific
circumstance can be best served by the law of contract. Construction is a
complex and uncertain industry; and an effective construction industry is
important and necessary for Ireland: it is a key driver of a functioning, developed
economy, and it requires a sustainable level of activity to maintain infrastructure
and develop new assets, consistent with what is expected of a developed nation.
Yet it often involves projects of financial and technical vastness; and operates in
an environment of risk, contractual risk allocation and residual uncertainty. The
law of contract is essentially applied in the same way by the courts, regardless of
whether the transaction is one of a major or minor nature. This contract paradigm
is a straightforward and rigid system, which is designed for simple contracts
involving equally-met parties, conducting non-complex transactions.
Construction is an industry which operates within this contract paradigm, even
though construction contracts are rarely as straightforward as those envisaged by
the contract paradigm. When agreeing a construction contract, parties attempt to
foresee all possible risks which could occur in the transaction, even though, in the
case of construction, it is often impossible to foresee all the risks. This thesis
studies the nature of the construction industry in general, and the Irish industry in
particular; it examines the characteristics of risk and risk allocation in
construction contracts, and then, by analysing the consideration requirement for
contract modifications, as well as the doctrines of promissory estoppel and
duress, looks at the alternatives to contract law requirements for the presence of
consideration in situations of verbal modifications to existing, properly-formed
construction contracts, where fresh consideration is absent. The thesis
recommends that, in order to simplify the process which exists in the Irish
construction industry, the consideration requirement be removed solely from this
specific circumstance, for the categories of construction activity covered by the
Construction Contracts Act 2013, and provided that duress is not present.