Construction Law/Contractor's Claim

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Question
Hi,

I am working as a Contract Engineer for the Engineer on a project pertaining to FIDIC MDB 2010 Conditions of Contract. My query is related to Sub-Clause 3.5 [Determination] of General Conditions of Contract. In one of the Contracts, the Contractor has submitted an extension of time claim. We have reviewed Contractor’s Claim in details as per Sub-Clause 20.1 GCC and find out that the Contactor has not fulfilled the requirement of the Contract in order to qualify for an extension of time. As the Engineer has to proceed under Sub-Clause 3.5 GCC simultaneously, therefore we called for consultation meeting between the parties. In Consultation meeting, we represent our initial findings to the Parties that the Contractor’s Claim did not qualify for extension of time but the Employer in a consultation meeting agreed to give extension of time to the Contractor and this agreement was recorded and take effect accordingly. My queries are as follows;

(i)   Is the Employer has the authority to discharge the Contractor from his liabilities in a consultation process? Keeping in view that the Contractor’s Claim did not qualify for any entitlement.

(ii)   Both Parties has the authority to amend the Contract with mutual agreement, then is it correct to do this mutual agreement under Sub-Clause 3.5 in a consultation process or it can be done elsewhere. Because I think, if such agreements has to be made without considering merit of the Claim, then why a detailed procedure of claim analysis is laid down in Sub-Clause 20.1 & 3.5 GCC.

I will be glad to receive your comments.

Umer Shabbir

Answer
Dear Umer,

(i) The Employer can do whatever his internal regulations allow.  You need to find out why the Employer agreed with the Contractor rather than with you, or you will have trouble in future. I suggest that you get the Employer's approval to the claim in writing, as required by clause 1.3.

(ii) The detailed procedure in clause 3.5 gives the opportunity to consider the strengths and weaknesses of both positions.  The Employer may have granted the claim as a strategic decision against further claims.  More than that I cannot say.  

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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.

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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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