Construction Law/Notice to proceed

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Question
Dear Femi,

In our contract we have two clear clauses, as such:

1. The Client should issue a Notice to Proceed within a maximum of 90 days from contract signature.

2. The Contractor is not allowed to claim for any issue unless a Notice to Proceed is Issued.

question # 1:If the client refrains to issue a notice to proceed within the 9o day period; is the contractor allowed to consider that the contract is null and void.

question # 2: If the client issues the notice to proceed at 140 days from contract signature; can the contractor demand a price change to any item of the BOQ that he can justify has incurred a cost increase within this 160 day period.

Thanks

Answer
Dear Salah,

Good day and thanks for your question.

I am trying to figure out if your contract provided a recourse for failure of the Client to issue the NTP within 90days. I would have suggested that you can check if there is any and if not, contractually and in the laws that regulates commercial / contract transactions in most countries, if an action or inaction of a party to a contract has caused the other party to same contract to suffer loss, the party that suffers loss can claim for damages and or compensation for such losses he may have sufferred. This is purely based on the principles of causation to be proven by the party that has suffered losses.
Your argument may be correct that, you never anticipated that, NTP would be delayed beyond 90days and even if you had, probably, to a minimal extent and so therefore, issuance of NTP by the client around 140 or 160days from the sate of signature has evidently caused a substantial material damage which i guess you should be able to justify by establishing the losses or damages you sufeered which may be and not limited to the following:

1. Delays in execution and completion of such work for such days beyond the 90th day till the issue date of NTP
2. Losses of direct or project overheads for staying idle (plant and labour) beyond the 90days till the date of issue of NTP
3. Losses of indirect or head office or administration overheads (office staff, equipement, rents, utility bills..etc beyond the 90days till the day of issue of NTP

I am uncertain if you would be able to prove the increament in rate successfully because, i guess the delayed period may still fall within the period of execution (assuming the issue of NTP was within 90days). Another thing is that, you may check if your contract allows for fluctuation or inflation compensation or not before you can analyse your entitlement on any change in rates.

I hope i am clear enough?

Femi

Construction Law

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Femi Alofe

Expertise

I can answer all questions relating to the followings: 1. Contract Administration - variations, contract clauses interpretation, all post contract procedures, valuations and certificates questions, extension of time issues and prolongation cost matters. 2. Contract Practice - Any questions regarding forms of contract like JCT, FIDIC & other Bespoke forms. 3. Quantification, measurements and Estimating questions 4. Contracts and construction law questions and dispute resolutions problems. 5. All FIDIC Conditions of contracts

Experience

Out of my 24 years experience in construction industry, i have the following specific experience: 1. Contract Administration - 15 years in contract administration with over 10yrs in Managerial positions covering africa and the middleeast. 2. Contract Practice - 15 years experience with over 10yrs in Managerial and expert positions covering africa, north america and the middleeast. 3. All pre-contract procedures, Tendering, Quantification, measurements and Estimating questions - 20 years experience. 4. Contracts and construction law questions and dispute resolutions problems - 15 years experience with over 10yrs in Managerial and expert positions and 5 years expert witness and active practice in arbitration proceedings covering africa and the middleeast.

Organizations
1. FAIQS - Fellow, Australian Institute of Quantity Surveyors, Australia 2. FRICS - Fellow, Royal Institution of Chartered Surveyors, UK 3. CCP - Certified Cost Professional AACEI, USA 4. PQS - CIQS, CANADA 5. ACIArb. - CIArb, UK 6. MNIQS - NIQS, NIGERIA 7. RQS - QSRBN, NIGERIA

Publications
1. AACEI RP on Estimating, 2010

Education/Credentials
1. B.Tech (QS) 2. RICS professional course, CEM - UK 3. MSc , UK NARIC 4. Professional Doctorate ( to commence 2016)

Past/Present Clients
1. Larsen & Toubro Ltd, Dubai UAE 2. Larsen & Toubro (oman) LLC 3. Archi + Web consortium, Abuja Nigeria 4. George Dike & Associates, Minna Nigeria 5. Public works Authority (Ashghal), Doha Qatar

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