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Law advice//

Focusing on
contractual
claims
Illustration by Mitch Blunt

‘Claims’ is a word that can mean different things to


different people. It can cause emotional flare-ups,
strained relations, endless exchanges of correspondence
and considerable resources. A claim has been defined
as the assertion of a right to, a demand or a request for
something. That ‘something’ in the context of a building
contract can be an extension of the time for completion
and/or additional payment under the express or implied
provisions of the contract. 2.5, which entitles the employer to claim payment from the
Claims must be distinguished from disputes and contractor or to extend the Defects Notification Period are
variations. When the contractor makes a claim, he is found in several clauses in the contract form.
simply putting forward a statement on his contractual
entitlement. However, if the claim is not accepted or there CLAIMS BY CONTRACTOR
is a failure to reach consensus, it may become a formal The contractor has 28 days from being made aware of the
dispute. Variations can manifest into claims when the event or circumstance giving rise to the claim to notify the
contractor believes he has a contractual entitlement, for engineer. Failure to give a notice within the 28-day limit
which he could not be sufficiently compensated under the disentitles the contractor from claiming an extension of
contractual machinery for valuing variations. time and additional payment, and discharges the employer
from any liability for the claim. Any other notices called for
if the claim is not ORIGINS AND BASES
Contractual claims must
under the contract, and the supporting details which are of
relevance to the claim, are also required to be submitted.
accepted, or there originate from particular The contractor has to keep such contemporary records
clauses in the contract. A grant as may be required to substantiate his claim and make
is a failure to reach or refusal of an extension of them available for inspection by the engineer. A fully
consensus, it may time for completion does
not necessarily entitle the
particularised claim must be submitted within 42 days
of the contractor being made aware of the relevant
become a dispute contractor to a claim for event or circumstance. If the event has a continuing
additional payment. Neither is effect, interim claims have to be submitted at monthly
it necessary for the time for completion to be extended intervals, culminating in a final claim within 28 days of the
before the contractor can make a claim for such additional end of the effects.
payment. That regular progress or completion of the works In the final reckoning, any claim for time or additional
has been disrupted, prolonged and/or materially affected is payment must be responsibly assessed by the engineer
what forms the basis of the contractor’s entitlement. The without delay and within the contractual framework so
expression ‘materially affected’ means that trivial delays that, importantly, the employer pays no more and the
and disruptions must be absorbed by the contractor and, contractor recovers no less.
therefore, only circumstances which substantially affect
progress and/or completion of the works are recognised. Eugenie Lip FRICS is head of KPK Contracts Support Group
and a director with KPK Quantity Surveyors. kpkqs.com.
CLAIMS BY EMPLOYER
Where the employer considers he is entitled to claim
payment from the contractor including claims for delay
damages, breach of contract by the contractor (or any
other claims under the contract), or an extension to the
Defects Notification Period, he (or the engineer) must
give a notice to that effect as soon as practicable. The
notice must be accompanied by particulars specifying
the relevant sub-clause and/or basis of the claim with
substantiation of the amount claimed and/or extension to
the Defects Notification Period. References to Sub-Clause

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