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Construction Law/FIDIC Red Book SC 16.4


Dear Sir,
For a Contract terminated under SC 16.2. FIDIC Red Book 1999 version Sub Clause 16.4 (c)states; "pay the Contractor the amount of any loss of profit or other loss or damage sustained by the Contractor as a result of this termination". Could you please clarify the meaning of "or" in this statement. Does this mean that the Employer shall pay either loss of profit or loss or damage sustained by the Contractor and not both of them? If this is the case who will decide which one is due?
Thank you.

Dear Francis,

The Contractor has to present his submission of any loss of profit or other loss or damage (all of them and more) due to the termination and the Engineer has to review and determine it in accordance with clause 3.5.  The Contractor could suffer loss due to materials ordered which cannot be returned, termination of plant hire agreements or losses by subcontractors, as well as loss of profits and overheads recovery.  The idea is to return the Contractor to the state he would have been in if the Contract had not been terminated.

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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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