Construction Law/Loss of Profit Claim...
We've had a project determined on us due to mine workings making the job unviable from the Employers point of view.
As new sub-contractors to a previously 'badly thought of' main contractor we won the job (probably the only tenderer) after pricing it with a relatively big margin - just in case.
Have we a valid claim for loss of this margin due to the shelving of the job by the Employer?
Thank you for this question.
Can you advise how your subcontract with the Main Contractor addresses, if at all, the MC's right to terminate the subcontract? If there are express statements to termination in the subcontract those should be the starting point and may specify the entirety of your entitlement.
If the subcontract is silent on termination, or you do not have a formal subcontract, then the common law position in the circumstances you have described probably dictates against a right to claim loss of profit.
You ought to receive a reasonable period of notice before termination and be compensated for all costs incurred, with consideration being given also to any special arrangements you made in order to perform the subcontract. For example if you have already committed to engage specialist personnel you may have extended obligations to them which you can seek to claim.
If your subcontract has a "good faith" provision - which is unusual in English law based contracts - the MC may have an additional obligation to you if its contract with the Employer allows it to claim loss of profit under that contract.
I hope that this assists you. If you have further information then please email me (firstname.lastname@example.org) and I will consider further.
Follow me on Twitter: @CernoOrg
For my regular industry newsletter e-mail to email@example.com, stating SUBSCRIBE in the subject line
Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to firstname.lastname@example.org (When e-mailing, please include “AllExperts” in the subject line.)