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Construction Law/deduction on lump sum contract

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Question
We have a lump sum contract with the client/owner. However, they deleted some items (supply and installation of balcony and accu railings, trellis, etc.) and awarded it to another contractor without informing us that it will be deleted to us prior to the awarding of those scope.

Can we charge the owner, opportunity of loss? If so, how much. Is 10% of the scope amount okay?

Also, could they deduct items on our contract such as equipments like generator when it was not used on site?

Thank you.

Answer
Hi Dafhne,


Thank you for your question. You forgot to mention the form of contract you are using and the governing law, thus my answer will be general in nature.

It is clear that the Client have breached the contract,unless something is written in your contract YES you can claim, if you can prove it.

There is no exact percentage to compute for such claim, it all depends on your actual loss.

Yes, the Client can deduct items under a lump sum contract provided such item shall not be awarded to other contractors. If you incurred cost to such deduction, you can submit a claim notice and further submit detailed particulars of your claim.

Hope the above helps and you can provide me a good rating.


Regards,

Jonathan  

Construction Law

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Jonathan L. Peralta

Expertise

Questions relating to construction claims, Extension of Time, Variations, Interim Payment and delay analysis under FIDIC Form of Contracts.

Experience

Experience in the following sectors: buildings, residential, infrastructure, civil and marine works. Have worked for different international contractors in Myanmar, Vietnam and the Philippines.

Organizations
AACEI, U.S.A., Dispute Resolution Board Foundation,U.S.A., ASCE, U.S.A., PICE,Philippines

Education/Credentials
Bachelor of Science in Civil Engineering, Registered Civil Engineer in the Philippines

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