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Construction Law/Contractor's Compensation


Employer default
Employer default  

Contractor\'s  Compensation
Contractor's Compensa  
Dear Sir;

you will find attached a Clause 59 of General Conditions of the Contract + Article 152 of the applicable law ... they both speak about Contractor's Compensation .. please go through them thoroughly and help me by answering the followings:
1- May we use these both Clause & Article to manage a case of dispute between our Employer (we are the Engineer) and the Contractor .. The case in brief is that there is a part of filling materials quantities on site is under dispute, We see that it is to be borne by Contractor referring to a certain condition in the Contract whereas the Contractor sees that he is entitled to this part and always claim to get it paid ...  is this a case of compensation claim that lies under the attached clauses?

2- does the Contractor have any right to stop the work of this disputed part until having it settled Or he must continue the work without stoppage  based on that the Contract would be applied to settle the dispute?

Thank you Sir

Dear Khalid,

Thank you for this question.

As you have highlighted, one of the clauses is from your contract and gives you rights under that contract; the other is from the codified law of the jurisdiction. As a general principle you are entitled to rely upon both, providing that the contract is consistent with the local law. The local law will prevail in the event of conflict between the two.

Concerning the contractor's claim, his entitlement will depend not only upon the applicability of the cited clauses. It will depend on the structure of the entire contract. From the information you have given, I cannot make any consideration of whether the entitlement is valid or not.

The contract clause is clear; a contractor is not entitled to cease work in the event of default by the Employer in making payment. Your situation, however, does not put the Employer in default and the clause does not apply directly. If there is a dispute then payment is not due and, by extension, non-payment cannot be a default. Notwithstanding this, it is common for contracts to specify when the contractor is entitled to slow his work pace or stop. Without knowledge of the contract I cannot be certain on this point, but I doubt there is an express contractual right to cease work.

I hope that this assists you.

Kind regards,
John Dowse

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John Dowse


Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.


Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Various UK and International construction and legal publications.

LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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