Lion Contractors Pty Ltd (the Contractor) enters into a construction contract with Zebra Development Pty Ltd (the Principal) under the AS 4000 General Conditions of Contract. Clause 25 of the contract conditions is unamended. When carrying out excavation works at the site, Lion encounters extremely hard rock which was not indicated in any of the site information provided by Zebra or obtained from other relevant parties at the tender stage. The cost of excavating the hard rock has not been priced by Lion in the contract sum. On the facts, which of the following is the most likely contractual position with respect to liability for the extra costs of excavating the hard rock?

a. Lion and Zebra must both contribute to the extra costs in equal proportions.
b. Zebra is liable to pay the extra costs under section 18 of the Australian Consumer Law as the geotechnical site report has misled Lion.
c. Zebra is liable to pay the extra costs as a deemed variation under the contract.
d. Lion is liable to pay the extra costs as they have agreed to bear the risk of latent conditions under the contract.



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