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Construction Law/Contractual Payment Issue

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Question
Contract Copy
Contract Copy  

Contract copy
Contract copy  
Dear Sir,

Please find enclosed our contractual agreement for commercial and residential project in Abu Dhabi, UAE. With reference to the attached contact clause no. 3.1, 3.3, 3.4.b and 02 pages No 85 we want to know the payment to consultant as per approved contract period of 26 months.

1) What is the liability of consultant supervision fee for 26 Months,  If project in delay?


Thank You,

Velmurugan

Answer
Dear Velmurugan,

Someone tried to be clever and did not succeed.  If the contractor finishes in 26 months, then you pay the consultant his total fee of 2.25% of the construction value.  If the construction is delayed and the Contractor completes only say 75% of the work, they you will have paid 75% of the Consultant's fee, and will be due to pay him at a man-day rate until the work is complete.  Of course, it could depend on the reason for the delay.  If it is an Employer risk, then the Employer pays.  If it is a Contractor risk, then the Contractor pays the extra over 25%.  The question is 'How many people does he need on the site to supervise it during completion?'  I suggest that the cost of supervision will amount to about 2.25% of the Contractor's monthly output, or close to.  It could be that the remaining fees would be adequate to cover the cost of supervision.  It all depends on other clauses in the Contract, especially about any supervision during the defects notification period.

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Peter M. Elliott

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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 www.eotprotocol.com before submitting a question.

Experience

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')

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

Education/Credentials
B Sc(Hons) in Civil Engineering

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