Construction Law/Delayed Payment

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Question
QUESTION: Dir Sir ,I am contacting you to inquire about an issue related to sub clause 14.8 in the Fidic /1999 Red Book , the contractor does not receive such payment with total amount of 300000$ in accordance with sub clause 14.7 for 4 months after the dead line which determinate in Red book fidic/1999 (56 day) .
So the contractor ask the Employer as sub clause 14.7 ) a sum for overhead charges and profit (
The  project  will be delayed for 3 months , the question is :
is the contractor Right to Claim anything Except  :
1- extension of time .
2- financing cost .
Best Regards

ANSWER: Dear Shadi,

Thank you for this question.

In accordance with clause 14.8 the Contractor will be entitled to financing charges, calculated in accordance with the clause and the rates specified in the contract.

The issue of delay should be treated separately. You have not disclosed the reasons for the delay; however if it is an event for which the Employer is liable under the contract and the event caused a delay to completion of the project then, unless there are other contract clauses which reduce the entitlement, the Contractor will be entitled to an extension of time with payment.


I hope that this assists you.

Kind regards,
John Dowse

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

QUESTION: thanks about above ,
my question is " is the contractor right to claim for
1- over head
2- profit
in the case which mentioned above .
best regards

Answer
Dear Shadi,

Thank you for this follow up question.

If the issue is only that payment was delayed, the Contractor is entitled only to the finance charges.

If the late-payment caused the Contractor to suspend progress (in accordance with sub-clause 16.1) then it should make a claim (under sub-clause 20.1). The contractor's claim would be for delay and it would be entitled to claim compensation including prolongation costs, a contribution to its off-sote overheads and profit.


I hope that this assists you.

Kind regards,
John Dowse

Follow me on Twitter: @CernoOrg
For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line

Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to info@cerno.org (When e-mailing, please include “AllExperts” in the subject line.)

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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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