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Construction Law/Exclusion of Provisional Sum

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Question
Dear Sir,
Is there any possibility a contractor to claim loss of profit, if client decided to exclude provisional sum from his contract?
Can client award the excluded provisional sum to another contractor?
Thanks in advance,
Priyanka

Answer
Good Day Priyanka,

I an not aware of which standard form of contract you are using. Generally, the Client is not allowed to exclude a provisional sum from the contract agreement for reasons of giving it to another contractor, especially while the works are currently being executed.

The contractor is entitled to carry out the whole of the Works in the contract. If the employer/engineer attempted to prevent the contractor carrying out any part of the Works, it would be a breach of contract. Most standard form of building contracts provide that the engineer may instruct the omission of parts of the Works. However, such clauses do not entitle the engineer to omit work so that it can be carried out more cheaply by another contractor. If the contract so provides, the work may be omitted, but only if it is not to be done at all, not in order to give it to someone else.

Any arbitrary withdrawal of work from the provisional sums and the giving of it to the third party is something for which the Contractor is entitled to be compensated and the compensation is loss of the profit. However, it is the for the Contractor to prove that he has suffered a loss of profit with figures put forward to the Engineer as evidence.


I hope this answers your question.

Best Regards

Kermit Dick  

Construction Law

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Expertise

All questions pertaining to Construction Law isses, ie, Claims EOT Loss of Profit Variations Damages ADR Delays and disruption Professional Negligence

Experience

Certified Arbitrator/ Mediator & Senior Quantity Surveyor Contract manager for Major Construction Firm From 2008 - 2010 Quantity Surveyor for over 16 years dealing with all issues of construction disputes, claims and general contract administration.

Organizations
Member of CIArb Member of ISTT (Institute of Surveyors of Trinidad & Tobago)

Publications
Thesis for Robert Gordon University re: "Professional Negligence in the Construction Industry[20,000 words]" Report for Deakin University "Failures in Slipform Construction [10,000 words]"

Education/Credentials
LLM in COnstruction Law & Arbitration (Robert Gordon Institute 2010) Graduate Diploma in Quantity Surveying (Deakin University Australia - 2007) Civil Engineering Technician Diploma (John D Institute Trinidad 1995) General Draghting Diploma (S'fdo Tech Inst. Trinidad 1984)

Awards and Honors
Distinction in Quantity Surveying via Deakin University (Graduate diploma in Quatity Surveying)

Past/Present Clients
VINCI COnstruction Grans Projets Kee Channona Limited (Trinidad & Tobago) NH International (Caribbean Limited)

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