Construction Law/Material at site

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QUESTION: Question:

We are working in re measurable contract ,there is allowance in payment clause to pay 75% of  the C.I.F value of material delivered at site subject to further 10%  retention .

My question : what is the meaning of "subject to further 10% retention" ,is the 75% value shall reduced by deducting of 10% (i.e. the net value will be equal to 67.5 % ).

what about the general 10% retention applied to all other estimated IPC  due amount ,it will applicable to to 67.5 as well ,and same shall be applied to recover the advance payment.

Many Thanks,

Ahmad"

ANSWER: Dear ahmad,

You forgot to mention the form of contract you are using.

Based on the information you provided, it means you retain 10% of 75% once the material is delivered at site subject to submission of any required documents as stipulated in your contract.

You should then claim for the actual percent accomplished once the material is included in the permanent works then retain 10% of it and deduct contract value of materials included in the permanent works.

Hope the above helps.


Regards,

Jonathan L. Peralta


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

QUESTION: Thanks a lot contract form is remeasurable ,I can understand only one 10% shall be applicable

Answer
Dear Ahmad,

Apply 10% to 75% upon delivery and when you used the material and incorporate in the works, you need to claim for the work done and apply 10% retention (this is the "general' retention you mention),then you need to deduct the value of materials delivered(claimed) and equivalent to 10% retention to make it balance..

Hope its clear and you can provide me rating.thanks.

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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