This assignment reviews construction contracts and claims for loss and expense. Contractors provide for the contractor to claim direct loss and expense. The claims are a result of the progress of the works being materially affected by the client’s matters. The matters include failure to give the contractor possession of the site, delays in receiving instructions, and so on. The claims may also include prolongation cost claims, which comprise costs resulting from disruption or delays to the works. Contractors must give written notice of a claim as soon as it becomes apparent that work is getting affected. The notice need not necessarily result in a delay to the completion date. Also, claims for loss and expense, and claims for extensions of time do not always run together. Construction contracts and claims for loss and expense are on restriction and so the exclusion of consequential losses.
construction contracts and claims for loss and expense
KEY THEMES ARISING FROM CONTRACTUAL LOSS AND EXPENSE CLAIMS
Construction contracts and claims for loss and expense enable the contractor to recover costs incurred due to certain risks. The risks include employer risk delay events. NEC3 users are familiar with the term compensation events, which deal with both extensions of time and costs consequences. In the JCT suite, however, the term is known as loss and expense. Time doesn’t always equal money is one of the key themes. Notably, just because an employer risk delay event arises, there is automatically no right to claim loss and expense. Setting out heads of claim is another theme, which is the next step after the delay identification period. The heads of claim theme consist of prolongation cost claims, finance charges, disruption, and costs of compiling a claim.
key themes arising from contractual loss and expense claims, click
THE BASIC PRINCIPLES OF PROLONGATION COST CLAIMS
Construction contracts and claims for loss and expense incorporate prolongation costs. Prolongation cost is the contractual mechanism for the recovery of additional time-related costs properly incurred due to compensable delays. The delays are to the completion of the works. For prolongation cost claims, there is a delay to the completion. The delay to the completion must be the consequence of a compensable delay to the completion of the works. In short, to warrant payment of prolongation costs, the delay must be compensable. The delay must also affect the critical path and delay the completion of the works. Compensation for prolongation should not get paid for anything other than work done, and loss and expense suffered.
the basic principles of prolongation cost claims
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