Construction Law/Termination


QUESTION: Dear Florin,

Hope you are doing fine.

It has been so long since my question last time.

The Employer for a road construction project was complaining about the poor progress by the Contractor and is intending to terminate the Contract. The Contract is based on BANK HARMINIZED EDITION OF THE GENERAL CONDITIONS PREPARED AND COPY RIGHTED BY FIDIC, FIDIC 2005.

My questions today are:

1.   Would the Contractor be required to give notice, in reply of the notice of termination by the Employer, of its intention to claim for any loss and damage sustained by it? If so, would the notice be given to the Engineer and under GC Sub-Clause 20.1?

2.   Would the Engineer have the duty to evaluate and make determination on the Contractor’s Claims after termination? Or would it be through a dispute resolution procedure by the Dispute Review Expert or Board?

3.   On what contractual basis the Contractor can submit its claim for any loss and damages to be sustained as a result of the Employer’s termination- which Clause to rely upon? For the termination by the Employer, the Contract makes provisions at GC Sub-Clauses 15.3 and 15.4 for payments to be due to the Employer only.

4.   I would also appreciate if you give me a guidance on the claims the Contractor may come up with when the Employer terminates.

Being deeply indebted in advance to hearing your expert advice, as usual of course, I remain


ANSWER: Hello Alemu,

Good to hear again from you, thank you for your new question.

Sorry for not replying earlier, we had a heavy snowfall last night and today and shovelled the snow almost all day. My back hurts badly ...

1. If the Employer issues a Notice of Termination, Contractor is not obliged to issue any response.

But of course, any sensible Contractor would reply indicating their point of view, why termination is not appropriate.

ONLY UPON TERMINATION Contractor can claim for wrongful termination, providing they indeed have a good substantiation for that.

Together with that claim, they would then indeed include any pretentions they consider appropriate and which they can demonstrate and substantiate, including loss of profit, etc.

2. Claims procedure will be followed, i.e. Engineer's Determination and if that not satisfactory, DAB. Mind you regardless if Contract is terminated, claim resolution will follow the normal path.

3. Depends on what reasons the Contractor can demonstrate that termination by Employer is wrongful. One needs more information to give an answer to that question.

4. Likewise, one need the actual information to answer that question.

Hope that helps, but if you have any further details you're always welcomed to come back.

---------- FOLLOW-UP ----------

QUESTION: Dear Florin,

I really felt very sorry for what happened to you because of the snowfall.

I would like to feel gratitude that even with this problem you replied promptly dear Sir.

I do not have words to thank you enough.

I am satisfied with the manner you addressed my questions. Indeed, I am continually getting the benefit of your knowledge whenever I need it.  

However, as to question no 3 my follow up question is for instance if it is about losses specifically associated with the termination that it is believed to be wrongful such as: under-recovery or loss of anticipated  profit, fixed component of site overhead costs, home office over head cost, damage for losses of good will or future business due to potential negative publicity, etc.

Best regards,


Hi Alemu,

Welcome back, thank you for your kind words.

In respect of indicated point 3, you can indeed think of loss of profit and along with that, anything else that you can demonstrate as being a genuinely suffered loss and which can be quantified.

As such, first, you must ensure you indeed have grounds to claim for the wrongful termination, i.e. Contract has not been terminated under any of provisions of Sub-Clause 15.2.

Loss of profit is mentioned under Sub-Clause 17.6, which then sends you at Sub-Clause 16.4 [Payment on Termination] - exactly what you need. Under that Sub-Clause, you can claim "any loss or damage sustained by the Contractor as a result of this termination" - but mind you, only if you can demonstrate the wrongful termination. That must be your first concern.

Not sure you can demonstrate the "fixed component of site overhead costs" as that is rather for recovering your cost for running the site.

As well, I do not think you can claim anything for "damage for losses of good will or future business due to potential negative publicity, etc", as that can not be demonstrated, nor quantified.

Moreover, such thing would not have happened at the time of your claim/ dispute adjudication.

Just to add to that, in general, you can claim whatever loss originates from the Contract itself. Such losses, even if demonstrable and quantifiable, are originating from outside the Contract.

Depending o the Law of the Country, most probably such loss can only be sustained in court. An Engineer/ DAB will most probably not have jurisdiction to grant compensation for such loss.

Trust that is clearer now, good luck!

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Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.


Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List and of DRBF Chapter for Eastern Europe Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List Member of “” volunteers pool Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States

- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme ( - FIDIC Accredited Adjudicator

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