Construction Law/advance forfeiture

Advertisement


Question
we have a construction contract and employer has given 15% advance against bank guarantee which has expired.Barring preliminary work, no other work could be executed as the Employer was not able to obtain usage of lane approval and has now terminate the contract which is wrong. The contract is silent on the advance paid except that it is is to be recovered/ adjusted from progress payment invoices. under the circumstances can we forfeit the advance received on the ground of wrongful termination and the the contract provided the adjustment of advance only against work done.

Answer
Dear Hemant
Hello
I am trying to reply your question;
Employer has given the 15% advance payment against unconditional bank guarantee.Now your contract has terminated by the Employer without appropriate reasons rather his failure to get approvals. In these circumstances; Contractor is liable to claim for such wrong termination as per provisions of contract agreement.Regarding the forfeit the advance received against unconditional bank guarantee,contractor has no right to forefeet the advance payment,only contractor can claim the amount for wrong termination as per the conditions of contract.
In other circumstances that are beyond the control of the Employer may terminate the contract on mutual consideration and to compensate the losses of the contractor.
I hope this will helps to you.
With best regards,
Sanjay Khandelwal

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Sanjay Khandelwal

Expertise

I can answer related to the various construction contracts forms related with disputes and claims.Expertise in to evalute the extension of time,cost and profit claims.I can answer regarding the contract management in civil works.

Experience

I have the experience of construction industry, as a consultants,executor of construction activities of infrastructure development like road and buildings. I have the experience of various software related to design of highways and quantity evaluation.

Organizations
I am life member of Indian Road Congress,INDIA I am presently employed with M/s Lion Engineering Consultants,INDIA

Education/Credentials
My educational qualifications are as below: I am engineering graduate from MITS, INDIA,1987 I have completed my Post graduation from NIT,INDIA,2011

©2016 About.com. All rights reserved.