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Construction Law/Government Order to increase wages


I am working as a Site Agent for a Contractor on a Construction project with fixed rates for work items. The Government recently ordered a drastic increase in wages and this about doubled our monthly wage bill. How can the Contractor be compensated for this increase and which clauses can be referred to in considering this kind of claim. The Contractor has given notice of intention to claim.

Hi Samuel
Even in a fixed price lump sum contract there is usually a clause in the Contract that allows for compensation for changes in Government Laws.
Read through the terms and conditions of the Contract to find that clause and follow the text.
If there is no such clause and the Employer is the Government then there is a rule about "unjust enrichment" whereby one party cannot make gains from another by their own action.
If there is no clause in the contract for law changes and the Employer is a private entity then your case rests on Force Majeure which is not a strong hook to hang on.
Otherwise the contractor is stuck with the loss.
Best regards
Mike Testro

Construction Law

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Mike Testro


Anything related to extensions of time and delay analysis.


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

Society of Construction Law Adjudication Society ex Planning Engineers Organisation

6 articles on the relevance of the India Contract Act 1872 and its relevance to modern construction in India. Waiting Publication

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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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