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Construction Law/Payment on termination by contractor


Dear Sir

As contractor we are evaluating the opportunity to resolve our contract (fidic red book '87) due to default by the Employer paying certificates.
Clause 69.3 states that the Employer shal pay any losses and damages.
Could we include the loss of profit?
If this is the case, could we calculate as % of the amount of remaining Works?
Finaly if this procedure is acceptable, comparing to profit declared in the offer we should consider some kind of reduction?
Thanks in advance
Best Regards


Dear Frank,

You could include loss of profit, but I would only include it as a negotiation item, not expecting to get it.

The problem with loss of profit is proving it.  You have to prove that you have declined other work, expecting this project to continue.  Further to have to prove the company's actual profit (not the suggested profit shown in the rate breakdown) from audited accounts for a reasonable number of years (don't ask what is reasonable - opinions vary).  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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