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Construction Law/Compensation of satff salary in case of extesion of time

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Question
Hello John,
We have FIDIC 1999 form of contract.
The employer has granted one year extension to the contract due late handover of the site.However, we as contractor, have continued to work in a peacemeal manner to mitigate delays in whatever area was handed over to us.
We are now preparing claim for the delay for this one year period. How should we account for the staff salaries for this period because we have been working all this period. Can we claim for the full staff salaries for this period?What is the best and recognized way to deal with such a situation?
Kindly advice.
Tanking you
Abdul

Answer
Dear Abdul,

Thank you for this question.

A fundamental principle of payment of damages in a contract is to put the innocent party back into the position it would have been but for the breach.

I assume that you reduced the level of staff as much as you were able from time-to-time to mitigate the cost to the Employer (and yourself) and that you are looking at the uneconomic cost of working in this piecemeal manner. In this case my suggestion is that you should recover the full cost of the staff, less any amount earned by working in the manner described. Check also your contract (and particular conditions) to ascertain whether you are entitled to overhead and profit recovery on the delay period.


I hope that this assists you.

Kind regards,
John Dowse

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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