Construction Law/Employers claim

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QUESTION: We have past the completion date of our project and is being charge delay damages however we have submit a schedule to complete the project in another 9 weeks. The employer send a claim for 9 weeks payment for project supervision and management base on our schedule and the engineer made a determination of the claim in their favor and is deducting the money from our present invoice. Can this be done although the period on the schedule has not yet began.

ANSWER: Dear Bissessar,

You forgot to mention the form of contract you are using, thus my answer will be general in nature.

In most construction contracts, the Contract shall execute and complete the works within a specified duration or date in accordance with the contract. Most contracts also provides provision regarding delay damages and extension of time.

The answer to your question will depend on the provisions in your contract. You need to check what is written.

The Employer may claim delay damage if there is a provision in the contract regarding time for completion, delay damage regarding late completion and or extension of time. If the contract states that in the event that the contractor fails to complete the works in a specified duration or date delay damage shall apply, then the Employer is entitled to claim. If an extension of time provision is also included in the contract and the contractor is entitled to and was granted an extension of time but still fails to complete the works, then delay damage may apply.

Hope the above helps.

Regards,

Jonathan L. Peralta

---------- FOLLOW-UP ----------

QUESTION: The contract we are using is Fidic 1999 red book. But my question is can the engineer determine today a claim  for works schedule 9 weeks in the future and is not project management and supervision included in delay damages. The employer claim is in addition to delay damages.

Thanks

Bissessar

Answer
Dear Bissessar,


Employer's Claim under FIDIC 1999 Red is mentioned under sub-clause 2.5 and delay damage is covered under sub-clause 8.7

If the Contractor fails to complete the whole of the Works within the Time for Completion stipulated in the Contract and no Extension of Time was granted, then delay damage shall apply pursuant to sub-clause 8.7. The total amount of delay damage shall not exceed the maximum amount stated in the Appendix to Tender (if something is mentioned).

I don't think that claiming double is allowed for the same breach or default by the Contractor, which means if the Contract includes a provision regarding delay damage and a pre-determined sum is mentioned in the Appendix to Tender then this shall apply in the event the Contractor fails to complete the Works within the stipulated duration or time. In the absence of a predetermined-fixed sum stipulated in the Appendix to Tender then the Employer may claim pursuant to the provision of sub-clause 2.5 for the damages caused by late completion, this claim shall need to be substantiated and proved by the Employer and the Engineer shall proceed with sub-clause 3.5.

Regards,

Jonathan L. Peralta

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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