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Construction Law/Percentage of deduction after the termination.


I have question about the payment and % of deduction after the termination. My first question is: when the payment should be done ( after the evaluation of the remaining works or after the agreement with the new contractor for completion of remaining part of the works???)  
2nd question is: I am confused in the percentage of deduction. What you suggest, is this so called percentage counted from whole the contract amount or from balance amount of the contract to be paid ( with initial rate) or the estimated amount for the completion of remaining part of the work(actual amount with new rate which would be needed to complete the remaining part of the works by new contractor)

Dear Vijay,

I understand that due to some reasons, the Contract between the Employer and the Contractor has been terminated by the Employer and it is awarded to another Contractor.

When the Contract signed between parties, the Contractor is responsible from completion of the Project and in case of termination, he is still also responsible to pay the Employer's Losses. Payment after Termination Clause in Fidic 4 stipulates that "If the Employer terminates the Contractor’s employment under this Clause, he shall not be liable to pay to the Contractor any further amount (including damages) in respect of the Contract until the expiration of the Defects Liability Period and there after until the costs of execution, completion and remedying of any defects, damages for delay in completion (if any) and all other expenses incurred by the Employer have been ascertained and the amount thereof certified by the Engineer. The Contractor shall then be entitled to receive only such sum (if any) as the Engineer may certify would have been payable to him upon due completion by him after deducting the said amount. If such amount exceeds the sum which would have been payable to the Contractor on due completion by him, then the Contractor shall, upon demand,pay to the Employer the amount of such excess and it shall be deemed."
Therefore the Employer is not obliged to pay any amount till the completion of the Project and he can also deduct al above additional expenses incurred by the Employer for utilizing another contractor.

I hope it is clear.

Best Regards.


Construction Law

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FIDIC, Arbitration Procedures, Claim Management, Project Management.


I have experience of working at 6 countries in MENA region (algeria, Libya, Saudi Arabia, Oman, Pakistan)as the Regional Director and General Manager of a construction company. I have experience on various applications of FIDIC and construction law, arbitration procedures, claim management, project management.

CEO of TURCON Construction presently.

M.S. Civil Engineer, Various Courses on Project Management, Seminars on FIDIC.

Past/Present Clients
National Highway Authorities of various countries, Water and Power Development Authorities, Karachi Port Trust, etc.

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