THE MEANING OF ‘PROVISIONAL SUM’

Midland Expressway Ltd v Carillion Construction Ltd [2006] EWCA Civ 936, 15 June 2006

In Midland Expressway Ltd v Carillion Construction Ltd [2006] EWCA Civ 936, 15 June 2006, the Court of Appeal considered the meaning of the words ‘provisional sum’ in a construction contract. While the drafting of the contract in the present case was not as clear as it might have been, the Court of Appeal held that a provisional sum was only payable at all if and to the extent that the employer so instructed. The provisional sums were to be omitted from the adjusted contract price and the appropriate actual amount substituted. Matters would have been much more straightforward had a clause been included in the contract which provided for the provisional sum to be omitted and an appropriate valuation of the work actually carried out to be substituted for it and the experience of the present case suggests that it would be good practice to insert an express term to this effect into a contract.