Construction Law/Lump Sum Contracts



In a Fixed Price Lump Sum Contract, if the Contractor has priced a line item in the bill but is no longer required to carry out the works - is he entitled to the whole amount or just loss of profit?

I understand that if the Contractor had to carry out the works but had made a greater allowance for the works then its his gain but the fact that no works are longer required, is the whole amount (excluding loss of profit) deemed a negative variation to the Contract Sum?

Thank you.

Hi Ciaran
It all depends on who has the work volume risk.
The simple test for this question is to reverse it.
If the Contractor was required to do work that was not in the BoQ would he be paid extra?
If No then there would be no reduction - if Yes then full reduction for the unwanted work.
Best regards
Mike Testro

Construction Law

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Mike Testro


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45 years in the Construction Industry 15 Years as a consultant delay analyst - I now hold myself to be expert in this field.

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Currently employed in India by Punj Lloyd as expert delay analyst. Engaged in ongoing arbitrations and EoT claims. Prior an Indepenent consultant in delay analysis.

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