1.

0 TYPES OF CLAIMS (a) VARIATION WORKS Changes in the requirements of the clients Defective plans and specifications Differences between billed and actual quantities Tendering errors Revisions caused by statutory and legislative changes Advices by engineers and architects Changes in construction methods Difficult ground conditions PRELIMINARIES Tools and small items of plant Lighting and power Water for the Works Insurances Supervision of the Works Scaffolding and hoist TIME RELATED Liquidated damages (genuine pre-estimates of the loss) Penalty (extravagant) Extension of Time - force majeure e.g war, epidemics, strikes - ordering of additional works & omissions - exceptional adverse weather conditions - distruption by actions of Government bodies - late possession of site - delay on the part of NSC or Suppliers - delay in engineers approval & instructions - events which affect the contractors liability to procure labour or materials

(b)

(c)

(d)

SUBCONTRACTORS AND SUPPLIERS Nature of the contractual relationship (i) if the Main Contractor does any act which has the effect of making the subcontractors task more onerous or otherwise impedes the progress of the subcontractor works, he may be liable to the subcontractor for any loss arising from such acts of prevention where the main contract work is delayed through some defaults of the subcontractor, the main contractor becomes liable to pay liquidated damages to the employer under the main contract. The main contractor then can recover the full extent of this loss from the defaulting subcontractor

(ii)

(e)

TERMINATION BY EMPLOYER Default by contractor to perform Insolvency of the contractor TERMINATION BY CONTRACTOR Contractors power to suspend work Default of client in payments

(f)

TERMINATION CLAIMS COMPONENTS OF CLAIMS:(a) (b) (c) Cost of preparing the completion contract, including expenses incurred in connection with the appointment of the completion contractor Cost of the completion contract itself, consist mainly of amounts paid to the completion contractor Liquidated damages for which the original contractor is liable

CLAIMS IN NEGLIGENCE Damages to persons and property Recovery of economic loss Liability of owner Liability of consultants - negligent statements & misrepresentations - design - supervision - certification - other contractual administrative functions

ACCELERATION CLAIMS Acceleration claims are commonly used in the U.S.A Acceleration of work is used to refer to situations where additional capital and manpower resources are applied to increase the rate of progress of the Works. Example:If as a result of accelerating the air conditioning installation works, the air conditioning crew is given priority of access to certain parts of the site, this in itself may impede smooth execution of the other trades on the project. A contractors claim for loss associated with acceleration of works will depend on the circumstances under which the acceleration measures are prompted. The groupings are as follows:(a) Where the measures are necessitated by the overall slow progress of the works (b) Where the measures are implemented at the express request or instruction of the employer or his engineer (c) Where there is a dispute relating to time extension and the contractor accelerates the works to avoid the consequences which would follow if the dispute is subsequently determined against him

Contractors slow progress of work The costs associated with the acceleration of works by the contractor (to make up for the loss of time when the work fall behind the program schedule) cannot form part of a legitimate claim against the employer. Instruction by the Employer, Engineer or Architect An employer or his engineer or architect may request or instruct the contractor to accelerate the works and, if the contractor acts on this, a claim would lie against the employer in respect of the acceleration costs incurred.

Time extensions have not been settled This is a situation where the employer or his engineer is unable to decide the contractors case for an extension of time in respect of the delay. The contractor, in order to avoid liability for liquidated damages, takes upon himself to accelerate the works.

2.0 CONSTRUCTION CLAIMS This is defined as any claim by a contractor for additional payment beyond the original contract price stipulated in a construction contract. The principal concerns to claims:(a) (b) the premise on which a claim may be founded the manner by which the quantum of the claim may be determined Claims Premise (i) A construction claim may be advanced on the basis that the employer has committed a breach of contract which has the result of inflicting some loss or damage to the contractor

(ii) (iii)

A claim may derive from a variation to the quality or quantity of the work to be executed under a construction contract A contractor may allege that a situation has arisen which notwithstanding the absence of breach by the employer, would entitled the contractor to financial compensation under some provision contain in the construction contract

Quantum of Claim
(i) The amount of financial compensation, which may be claimed following a breach of contract is governed by the operation of common law principles relating to damages

(ii)

When the claim does not amount to a breach, its quantum will be determined largely by the provisions for payment and additional financial compensation contained in the construction contract

The compensation sought by the contractor are as follows:(1) The contractor may seek compensation in respect of all additional expenditure which he has incurred as a direct consequence of the breach The contractor may claim for additional interest and other financing costs The contractor may allege that delay has adversely affected his output so that there is, in effect, a loss of productivity The contractor may also seek compensation for on-site overheads which consist of item e.g standing charges & expenses incurred for plant and equipment, manpower resources and site facilities There will be a component representing so called off site charges or overhead office overheads which are essentially related to the loss of recovery for fixed standing costs incurred in maintaining the companys head office support There will be an item representing an attempt to claim for loss of profit resulting from the contractor being denied the facility to employ his capital resources elsewhere for the duration of the delay

(2) (3) (4)

(5)

(6)

3.0 CLAIMS The QS should take the following actions in the assessment of any claims by the Contractor:(i) (ii) (iii) Which clauses of the contract apply and how they are be interpreted? What elements of cost are involved? What is the monetary entitlement?

- The QS will usually request the master program, often in the form of a bar chart, a method statement which shows the sequence of work by the contractor together with the cost of preliminaries Broad Categories of Claims (i) Contractual claims - these claims are founded on specific clauses within the terms of the contract (ii) Ex-Contractual claims - these claims are not based on the clauses within the terms of a contract although the contractor has suffered loss or expense in the project - in normal circumstances, there is no contractual obligation for payment to be made in this type of claims - any payments made will be on an ex-gratia status (act of grace) e.g (a) late deliveries of materials by a supplier on a firm price contract which result in a high increase for the materials (b) where there is a shortage of labour and the contractor has to pay high additional costs to recruit them (iii) Common Law claims

- these claims are established by taking action through the courts for damage for breach of contract, tort, repudiation, implied terms and other related matters.

NEGATIVE CLAIMS Negative claims are as follows: (a) these are claims where the contractor will not get any payments e.g liquidated and ascertained damages (b) LAD will be imposed if there ia an alleged breach of contract by the contractor (c) A negative claim can be submitted by the contractor in this case (d) Claim for an extension of the contract period is also a negative claim PAM 98 Clause 23.0 deals with Extension of Time - examples of the relevant events that will give rise for the contractor claims are stated in the clause JKR 203A Clause 43.0 deals with Delays and Extension of Time. - examples of causes of dealy are stated in Clause 43 (a)-Clause 43 (k) POSITIVE CLAIMS - these claims, if successful can result in an addition to the contract sum, i.e, the contractor will get extra money in this type of claim - the relevant clauses in PAM98 are as follows:

(i) (ii)

Clause 4.0- Statutory Obligation....... Clause 6.0 Materials, Goods and Workmanship to conform to description, testing and inspection (iii) Clause 7.0 Royalties and Patent Rights (iv) Clause 11.6 Valuation of direct loss and/expense (v) Clause 15.3 Cost of making good defects (vi) Calause 20.C.1 to C.6 Cost of insurance premiums in respect of existing structures (vii) Clause 24.0 Loss and / or expense caused by disturbance of regular progress of Works (viii) Clause 26.0 Determination of Contract (ix) Clause 33.0 - Antiquities