Construction Law/Risk & Cost


What is “Contract at risk and cost of contractor?”
As we were working on 24% below rates by Engineer’s estimate than client gave leftover work to next contractor @ 52% above by Engineer’s estimate, now the client has claimed amount @ 76% by 1st contractor against risk & cost.
Also client award the work to 2nd contractor without intimation and bid.

Dear Farrukh Sb,
Thank you for your question.
You have neither mentioned the type of contract nor relevant clause and its conditions for the termination of the contract. If it is FIDIC-1987, default of Contractor for termination is covered under Clause-63.1 for which Employer has to give 14 days notice to the Contractor and enter upon the site and the works to termination the employment of the Contractor without releasing him from any of his obligations or liabilities under the contract that means to carry out work at his risk and cost and make payment at the final bill stage after adjusting risk and cost factor. It appears that in your case no notice has been given and becomes a breech of the contractual provisions. I feel you can press your case forcefully with the Employer on this account in consultation with a local lawyer. i do not have sufficient information to say more than this at this stage. If you provide detailed information, may be I can come up with some more comments.Regarding amount of recovery, it has to be as per contract i.e. the difference of amounts payable to you on the balance work now done by another contractor at his and your contract rates is recoverable but you have to see and read the relevant clauses very carefully before coming to any conclusion  

Liaqat Hayat  

Construction Law

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Liaqat Hayat


I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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