Notices: Should a Contractor Submit if He is Not Sure Whether He Intends to Make a Claim?

A blog follower recently asked for advice on the correct interpretation of FIDIC Sub-Clause 20.1 (Contractor’s Claims) with regard to situations where the Contractor is not sure if he will submit a claim or not. It’s not unusual for the Contractor to become aware of an event that may cause delay, the occurrence of additional Cost, or entitlement for additional payment. However, he may not be aware of the final effect of the event at the time that he becomes aware of the issue. For example, perhaps a delay will end before it affects the Time for Completion or perhaps an instruction received will not constitute a variation which will change a lump sum contract or, possibly, the Contractor will just decide that the value of the claim will not justify the time and cost involved in preparing it. The wording of the first part of this clause is as follows: ‘If the Contractor considers himself to be entitled to any extension of the Time for Completion and/or any additional payment, under any…

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5 Tips For Success When Claiming for Variations

During CPD talks and training courses, I am often asked if it is necessary to submit claims for a variation. Unfortunately, I am going to have to give a lawyer’s answer to this and say it depends. If the party responsible for administering the contract follows the procedure set out in most forms of contracts for instructing variations, then the answer is “no”. The variation has been acknowledged and it will either be measured and evaluated as part of the remeasurement (on a remeasureable contract) or as a separate evaluation leading to a change of the contract price of a lump sum contract. We all know, however, that in many cases, consultants do not formally issue instructions for variations to the contract and often give instructions which are not acknowledged as being variations. Examples can often take the following forms: Issue of revised drawings; Comments on shop drawings which require changes to the contract drawings; Comments on materials submittals which change the…

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What is “Time at Large”?

A blog reader got in touch asking for an explanation of the term “time at large”. This is not something that I have personally come across in practical terms, so for the advice that I am about to give, I am indebted to my former boss, Roger Knowles, who provides an explanation in his book, 150 Contractual Problems and their Solutions. Roger explains: Time is at large when a contract is entered into with no period of time fixed for completion. Where this occurs, the contractor’s obligation is to complete within a reasonable time. I have never experienced such a situation and I expect that when it does occur, it will be on smaller projects where the contract is between parties unfamiliar with good practice. There may also be circumstances which arise rendering a completion period fixed by the contract as no longer operable, again rendering time at large. An example is where a delay is caused by the employer and the terms of the contract make no provision for extending the completion…

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What Qualifies as Force Majeure Under FIDIC?

One of our blog subscribers requested advice on force majeure under the FIDIC Red or Yellow books. The good news is that the FIDIC force majeure clauses are nearly the same under the Red, Yellow, Silver, and Gold forms of contract, so the following is applicable to all of them. Sub-Clause 19.1 (Definition of Force Majeure) the Red Book states that: ‘In this Clause, "Force Majeure" means an exceptional event or circumstance:      (a) which is beyond a Party's control,      (b) which such Party could not reasonably have provided against before entering into the Contract,      (c) which, having arisen, such Party could not reasonably have avoided overcome, and      (d) which is not substantially attributable to the other Party.’ Thus, to qualify as a force majeure event, it has to tick all of the boxes (a) to (d) above. The clause, however, goes on to offer further definitions as follows: Force Majeure may include, but is not limited to, exceptional events or circumstances of the kind…

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How to Ensure Engineers’ Responses and Instructions Do Not Result in Expensive Claims

A request was made by one of our blog followers to examine the Engineer’s duty to provide instructions and responses within a reasonable time. In my experience, failure of the Engineer to comply with such obligations often gives rise to claims, so this is definitely worth a blog post. This example uses the 1999 FIDIC Red Book, although other forms of contract contain similar provisions. Sub-Clause 1.3 (Communications) states that ‘Approvals, certificates, consents, and determinations shall not be unreasonably withheld or delayed’ which immediately begs the question: what constitutes unreasonable delay? The contract itself provides guidance in many circumstances. For example, Sub-Clause 14.6 (Issue of Interim Payment Certificates) provides that payment certificates shall be issued within 28 days of the Contractor’s Statement being received and 10.1 (Taking Over of the Works and Sections) obliges the Engineer to either issue the Taking Over Certificate or reject the Contractor’s…

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