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EOT and Loss and

Expense Claim

Mr Tse Sek Chuen


Director
Widnell Ltd
A) Extension of Time Claim

1) General

a) In the absence of express Contractual power


to extend the time for completion, the
Architect could not do so.

b) Failure by the Architect to properly exercise


the power to extend time will relieve the
Contractor from his liability to pay liquidated
damages and the time for completion may
become ‘at large’.
A) Extension of Time Claim (Cont’d)

c) Assessed at the time when the Works


are actually carried out and not when
they were programmed to be carried out.
A) Extension of Time Claim (Cont’d)

d) E.O.T. clause is put into the Contract to


cater for the delay caused by:-

1) Employer or the Architect

Without E.O.T. Clause, the


completion of works delayed by the
Employer/Architect will also relieve
the Contractor from his liability to pay
liquidated damages and the time for
completion may become at large.
A) Extension of Time Claim (Cont’d)

d) (Cont’d)

2) Neither party of the Contract

i) As a fair sharing of the risk between


the parties.

ii) Under those events caused by neither


party which are expressly provided in
the Contract, the Contractor is entitled
to E.O.T. only. No monetary
compensation will be paid to the
Contractor.
A) Extension of Time Claim (Cont’d)

d) (Cont’d)

iii) Under those events caused by neither


party which are expressly excluded
from the Contract, the Contractor is
to take up the risk, no E.O.T. will be
granted.
A) Extension of Time Claim (Cont’d)

e) Under no circumstances will the


Contractor be entitled to receive
financial compensation for the delay
caused by the Contractor himself.
A) Extension of Time Claim (Cont’d)

2) Time at large

a) Where no time for completion is specified,


time is said to be ‘at large’ and a term
for completion within a reasonable time
will be implied.

b) Where the time fixed by the Contract for


completion has ceased to be applicable
and the Contractor is continuing to work
under the Contract.
A) Extension of Time Claim (Cont’d)

c) If a Contractor is delayed by the


Employer where the conditions of
contract make no proper provision for
extending the completion date for this
type of delay.

d) Where time is at large the Contractor/


subcontractor’s obligation is to finish
within a reasonable time.

e) LD will become inapplicable.


A) Extension of Time Claim (Cont’d)

3) Major obstacles to EOT claim

a) Late or lack of notice from the


Contractor.

b) Failure to recognise delay that results


in contemporary records not being
kept.

c) Failure to regularly update the


programme.
A) Extension of Time Claim (Cont’d)

d) Poor presentation of the claim to


show how the progress of the work
has been delayed.

e) Insistence on the part of the Employer’s


professional advisers, that unreasonably
detailed critical path programmes are
essential in order to assess the effects
of the delay.
A) Extension of Time Claim (Cont’d)

4) Events Qualifying For Extension of Time

a) RICS (HK Branch) 1986 Edition

i) Clause 23
(a) Force majeure.
(b) Inclement weather
(rainfall in excess of 20
mm in a 24 hours period)
and typhoon signal No.
8 or above.
A) Extension of Time Claim (Cont’d)

i) Clause 23 (Cont’d)
(c) Fire, storm, tempest.

(d) Civil commotion, local combination of


workmen, strike or lockout.

(e) Architect’s instructions issued :-


i) discrepancies in contract
documents
ii) variations
iii) postponement of any works
A) Extension of Time Claim (Cont’d)

i) Clause 23 (Cont’d)
(f) Main Contractor not having
received in due time necessary
instructions, drawings, details or
levels from the Architect for which he
specifically applied in writing.
(g) Delay on the part of nominated
subcontractors or nominated
suppliers which the Main Contractor
has taken all practicable steps to
avoid or reduce.
A) Extension of Time Claim (Cont’d)

i) Clause 23 (Cont’d)

(h) Delay on the part of artists,


tradesmen or others engaged by the
Employer.

(i) Opening up for inspection of any


work covered up or of the testing of
any of the work, materials or goods.
A) Extension of Time Claim (Cont’d)

i) Clause 23 (Cont’d)

(j) Unforeseen shortage of labour.

(k) Unforeseen shortage of materials.

(l) Discovery of antiquities.


A) Extension of Time Claim (Cont’d)

b) Hong Kong Government Form 1993 Edition

i) Clause 50(1)(b)

a. Inclement weather conditions


and/or its consequences
adversely affecting the progress
of the Works.

b. The hoisting of tropical cyclone


warning signal No. 8 or above.
A) Extension of Time Claim (Cont’d)

i) Clause 50(1)(b) (Cont’d)


c. An instruction issued by the
Architect concerning discrepancies
in contract documents.
d. Variations

e. A substantial increase in quantities


of any item of work not resulting
from any error in firm quantities or
from a variation ordered under
Clause 60.
A) Extension of Time Claim (Cont’d)

i) Clause 50(1)(b) (Cont’d)

f. The Contractor not being given


possession of the Site or any
portion or part thereof in
accordance with the Contract.

g. A disturbance to the progress of


the Works for which the Employer
or the Architect or a Specialist
Contractor is responsible.
A) Extension of Time Claim (Cont’d)

i) Clause 50(1)(b) (Cont’d)

h. Suspension of the Works, except


due to weather, Contractor’s
default or as provided for in the
Contract.

i. Any utility, undertaking or other


duly constituted authority failing to
commence or to carry out in due
time work directly affecting the
execution of the Works.
A) Extension of Time Claim (Cont’d)

i) Clause 50(1)(b) (Cont’d)

j. Delay on the part of any nominated


sub-contractor, which would entitle
the Main Contractor to an
extension of time.

k. Any special circumstance of any kind


whatsoever.
A) Extension of Time Claim (Cont’d)

ii) Clause 50(1)(c)

The Contractor shall not be entitled to


an extension of time for the following :-

a) Shortage of Construction Plant or


labour.

b) Suspension of the Works


i) Provided for in the Contract.
A) Extension of Time Claim (Cont’d)

ii) Clause 50(1)(c) (Cont’d)

b) Suspension of the Works (Cont’d)

ii) By reason of weather condition


affecting the safety or quality
of the Works.

iii) By reason of some default


on the part of the Contractor.
A) Extension of Time Claim (Cont’d)

ii) Clause 50(1)(c) (Cont’d)

b) Suspension of the Works (Cont’d)

iv) For the proper execution of


the Works or for the safety of
the Works not arising from
any act or default of the
Architect/Employer.
A) Extension of Time Claim (Cont’d)

5) Notice Requirements for EOT

Some notice requirements are condition


precedent to the Contractor’s entitlement
and therefore the Contractor loses his right
to claim if he fails to comply with such a
notice requirement.
A) Extension of Time Claim (Cont’d)

a) RICS HK Branch 1986 Edition

i) Clause 23

Upon it becoming reasonably apparent


that the progress of the works is
delayed, the Main Contractor shall
forthwith give written notice of the
cause of the delay to the Architect.
A) Extension of Time Claim (Cont’d)

b) Hong Kong Government Form (1993


Edition)

i) Clause 50(1)(a)
As soon as practicable but in any event
within 42 days of the cause of any
delay to the progress of the works
becoming apparent, the Contractor
shall give notice in writing to the
Architect of the cause and probable
extent of the delay.
A) Extension of Time Claim (Cont’d)

i) Clause 50(1)(a) (Cont’d)

Any order or instruction issued by the


Architect is likely to cause a delay to
the progress of the works, the
Contractor shall forthwith give notice in
writing to the Architect and specify the
probable effect and extent of such delay.
A) Extension of Time Claim (Cont’d)

6) Presentation of EOT Claim

a) Description of the cause delay.

b) The contractual provision which is being


relied upon.
c) The date when the delay commenced
and the period of delay.

d) The date of notice of delay.


A) Extension of Time Claim (Cont’d)

e) A summary of records and particulars


relied upon.

f) A description of the event and effects


on progress.

g) A diagrammatic illustration showing the


status of the programme, progress and
current completion date prior to the
commencement of the delay.
A) Extension of Time Claim (Cont’d)

7) Programme

a. Effective and realistic programme

b. Delay has affected completion of


the Works

c. Flow time included in the programme


B) Loss and/or Expenses Claim

1) Events Giving Rise to a Monetary Claim

a) RICS (HK Branch) 1986 Edition

i) Clause 11(6)
a) Direct loss and expense arising from
Architect’s variations and expenditure
of provisional sums for which the
Contractor would not be reimbursed
by payment in respect of valuation of
variation, both subject to written
notice.
B) Loss and/or Expenses Claim (Cont’d)

ii) Clause 24(1)

Direct loss and expense arising from:

a) Not having received in due time


necessary instructions, drawings,
details or levels from the Architect for
which the Contractor specifically
applied in writing;
B) Loss and/or Expenses Claim (Cont’d)

ii) Clause 24(1) (Cont’d)

b) Opening up work for testing;

c) Discrepancy or divergence between


contract drawings or contract bills;

d) Delay by artists and tradesmen or


other engaged by the Employer in
executing work not forming part of
this contract;
B) Loss and/or Expenses Claim (Cont’d)

ii) Clause 24(1) (Cont’d)

e) Architect’s instructions regarding


postponement

iii) Clause 34(3)

a) Direct loss and expense arising from


the discovery of antiquities
B) Loss and/or Expenses Claim (Cont’d)

b) Hong Kong Government Form 1993 Edition

i) Definition of ‘Cost’

Clause 1 : “….. expenditure reasonably


incurred including overheads whether on
or off the site and depreciation in value of
Construction Plant owned by the
Contractor but excluding profit.”
The following clauses provide an express
entitlement to the recovery of additional
cost.
B) Loss and/or Expenses Claim (Cont’d)

ii) Clause 5(b)

Compliance with instructions concerning


discrepancies between documents

iii) Clause 34(2)

Provision of facilities for other Contractor


working adjacent to the site as the Surveyor
considers reasonable.
B) Loss and/or Expenses Claim (Cont’d)

iv) Clause 48(2)


Due to progress of the Works being affected
by failure to give possession of site as are
necessary for the Contractor to carry out
the Works.

v) Clause 54(2)
Due to suspension of the Works under
Architect’s Instructions subject to certain
listed exceptions.
B) Loss and/or Expenses Claim (Cont’d)

vi) Clause 63

Due to progress being materially affected by:-

(a) Late information

(b) Variations issued in Clause 60

(c) Opening up for inspection etc (unless


provided for in contract or unless
inspection reveals a non
compliance).
B) Loss and/or Expenses Claim (Cont’d)

vi) Clause 63 (Cont’d)

(d) The work or supply of others (except


utilities) engaged by the Employer
which are directly connected with the
Works though not forming a part of it.

(e) Late delivery of materials, plant or


equipment by the Employer.
B) Loss and/or Expenses Claim (Cont’d)

vi) Clause 63 (Cont’d)

It should be noted that the rules for


evaluating variations (Clause 61) contain
some flexibility in that rates may be
enhanced to cover the material affect on
progress. This should be considered as a
convenient alternative to a claim under
Clause 63(b), particularly when the effect is
disruption to progress, rather than a
prolongation of the Works as a whole.
B) Loss and/or Expenses Claim (Cont’d)

vii) Clause 66

Additional expenditure incurred by the


Contractor as a result of being instructed
to engage a NSC on conditions other than
the standard form of sub-contract.
B) Loss and/or Expenses Claim (Cont’d)

2) Notice Requirements for Loss & Expense


Claim

i) General
a) Some notice requirements are
condition precedent to the
Contractor’s entitlement and
therefore the Contractor loses
his right to claim if he fails to
comply with such a notice
requirement.
B) Loss and/or Expenses Claim (Cont’d)

b) Failure to give notice in accordance


with the contract may bar or severely
prejudice a claim for additional payment

c) Specific notice provisions are inserted


the Contractor must comply with these
requirements
B) Loss and/or Expenses Claim (Cont’d)

d) Advance warning as possible of the


possibility of an increase in the contract
price

e) Under a duty of care to the Employer in


giving an estimate of the cost of an
intended building

f) Enable the Architect/Engineer/Surveyor


to make assessment
B) Loss and/or Expenses Claim (Cont’d)

ii) RICS HK Branch 1986 Edition

a) Clause 11(6), Clause 24(1)


Upon written application being made
to the Architect, the Architect is of
the opinion that the Main Contractor
has incurred the loss and/or expense
for which he would not be reimbursed
by payment in respect of valuation of
variation / made under any other
provision in the Contract.
B) Loss and/or Expenses Claim (Cont’d)

iii) Government of the Hong Kong SAR (1993


Edition)

a) Clause 64(1)

Contractor shall give written notice of


his intention to claim a higher rate
within 28 days of Surveyor’s
notification of the rate.
B) Loss and/or Expenses Claim (Cont’d)

b) Clause 64(2)
Contractor shall give written notice of his
intention to claim any additional payment
within 28 days of the event giving rise to
the claim.

c) Clause 64(5)
If the Contractor fails to comply with the
notice provision contained in Clause 64(1)
and 64(2), such claim shall not be
considered.
B) Loss and/or Expenses Claim (Cont’d)

3) Prolongation Claims

Typical heads of claim arising out of


prolongation of the contract period are:

a) Site overheads or preliminaries

b) Head office overheads

c) Loss of profit
B) Loss and/or Expenses Claim (Cont’d)

d) Cost escalations

e) Cost claims from subcontractors

f) Depreciation on assets

g) Financing charges

h) Delayed release of retention

i) Adjustment of levies
B) Loss and/or Expenses Claim (Cont’d)

4) Site overheads

a) Actual Costs

The extra site overhead costs due to


prolongation are those incurred after
the original contract completion date
and up to the extended (or actual)
completion date.
Some may prefer the costs incurred
during the actual period of delay.
B) Loss and/or Expenses Claim (Cont’d)

Documents/information to substantiate the actual


costs incurred:-

i) Staff

- Organization chart/site diary records


showing the staff involved.

- Staff salaries payroll records or


contract of employment.
B) Loss and/or Expenses Claim (Cont’d)

ii) Plant
- Site and plant records showing
the plant involved.

- Plant hire purchase agreement/


contracts of plant purchase/plant
costs depreciation record.

iii) Insurance/Bond
- Premium receipts for the prolongation
period.
B) Loss and/or Expenses Claim (Cont’d)

iv) Security/Safety Services

- Security staff payroll records.

- Payment receipt for contracted


security services.

v) Site Facilities e.g. site office, toilet, store


room, etc
- Actual cost records as appropriate.
B) Loss and/or Expenses Claim (Cont’d)

b) Preliminaries BQ

1. Time-related items

2. Non-time-related items

3. A price per day/week/month to


apply to the prolonged period
B) Loss and/or Expenses Claim (Cont’d)

4. Very simple means of establishing an


additional payment for site overheads

5. Not complying with the provisions of


most standard forms of contract which
require loss and expenses or costs to be
paid
B) Loss and/or Expenses Claim (Cont’d)

5) Head office overheads

Components of head office overheads


may be listed as follows:-

a. Rent and rates of offices, plant and


yards;

b. Maintenance and running costs;

c. Directors’ salaries and expenses;


B) Loss and/or Expenses Claim (Cont’d)

d. Head office, technical salaries and ‘on


costs’ (surveyors, planners,
purchasers and the like);

e. Head office administrative staff


salaries and ’on costs’ (accountants,
typists, messengers, cleaners,
maintenance staff);
f. Administrative expenses, such as
postage, printing, stationery,
telephones;
B) Loss and/or Expenses Claim (Cont’d)

g. Traveling expenses, including the


provision of motor cars for directors
and staff;

h. Legal and professional fees;

i. Depreciation.
B) Loss and/or Expenses Claim (Cont’d)

i) The actual cost approach

1. Cost of the actual head office


overheads affected by the delay
2. The difficulty arises in identifying
the increased expenditure directly
and indirectly arising from the
delay on the project in question
B) Loss and/or Expenses Claim (Cont’d)

3. Generate a timesheet, showing the


time which they have spent on the
project , compared with the time
spent on the project during the earlier
period of construction
4. Other head office costs such as
accounts, secretarial and clerical staff,
rent, services, stationery, etc,
effectively exist to support key staff
B) Loss and/or Expenses Claim (Cont’d)

A global claim ie: where a Contractor claims his


total head office expenditure and deducts from
that total the amount included in its tender.

Documents/information shall be provided by the


Contractor to substantiate the actual costs
incurred:-
B) Loss and/or Expenses Claim (Cont’d)

- Actual cost records, e.g. time sheet,


contract of employment, etc.

- Auditor’s account showing the detailed


breakdown of administrative expenses
covering the whole contract period.
B) Loss and/or Expenses Claim (Cont’d)

ii) The lost opportunity approach

The lost opportunity approach uses a


formula for its calculation, which is simple,
cheap, quick and produces a reasonable sum
of money for very little effort.

There are three formulae commonly used for


head office overhead calculations: the
Hudson formula, the Emden formula and the
Eichleay formula.
B) Loss and/or Expenses Claim (Cont’d)

a) Hudson’s formula

Head Office Overhead Contract


Percentage Sum Period of
x x
100 Contract Delay
Period

Note: The Head Office Overhead


percentage in the Contract
B) Loss and/or Expenses Claim (Cont’d)

The formula adopts the head office overhead


percentage from the contract as the factor
for calculating the costs. This may bear little
or no relation to the actual head office costs
of the Contractor and therefore Hudson’s
formula is often criticized as unrealistic.
B) Loss and/or Expenses Claim (Cont’d)

b) Emden’s formula

Head Office Overhead Contract


Percentage Sum
Period of
x x
100 Contract Delay
Period
B) Loss and/or Expenses Claim (Cont’d)

Note: The HO/Profit percentage is head office


percentage, arrived at by dividing the
total overhead costs and profit of the
Contractor’s organization as a whole by
the total turnover.
This formula has the advantage of using
the Contractor’s actual head office/profit
percentage rather than the one
contained in the contract and has
received judicial support in a number of
cases.
B) Loss and/or Expenses Claim (Cont’d)

c) Eichleay formula

ie: Value of work during


contract period Total Head Office
Overheads
Total value of work for the x
During contract
company as a whole period
during contract period

= Head Office Overheads Allocated to


the Contract
B) Loss and/or Expenses Claim (Cont’d)

Head Office Overheads


Allocated to the Contract
x Period of Delay
Contract Period

= Amount Claimed
B) Loss and/or Expenses Claim (Cont’d)

1. Comparing the value of work carried


out in the contract period for the
project with the value of work carried
out by the contractor as a whole for
the contract period.
2. A share of head office overheads can
then be allocated in the same ratio and
expressed as a lump sum to the
particular contract.
B) Loss and/or Expenses Claim (Cont’d)

3. The amount of head office overhead


allocated to the particular contract is
expressed as a weekly amount by dividing
it by the contract period.

4. The period of delay can then be multiplied


by the weekly amount to give a total sum
claimed.
B) Loss and/or Expenses Claim (Cont’d)

6) Loss of profit

a. Some contractual provisions only


provide for recovery of additional
cost or expense, a claim for loss of
profit is not permissible
B) Loss and/or Expenses Claim (Cont’d)

b. The Contractor to show some evidence


that he was given the opportunity to
tender for other projects and that he
could not reasonably take advantage of
these opportunities because of the fact
that his resources were retained on the
delayed project
B) Loss and/or Expenses Claim (Cont’d)

c. the Contractor would be advised to keep


a record of the following:-

i) All tenders submitted and


awarded so that a success ratio
can be established;

ii) All projects for which the Contractor


was invited to tender, but which
were declined or a deliberately high
tender submitted.
B) Loss and/or Expenses Claim (Cont’d)

If the Contractor can demonstrate that, on the


balance of probability, he would have been
able to obtain other contracts during the period
of overrun, that alone ought to be sufficient to
establish the claim in principle.
B) Loss and/or Expenses Claim (Cont’d)

7) Cost escalations

If the contract is fixed price there is no


mechanism for adjusting the contract sum
for fluctuations in prices of labour and
materials
B) Loss and/or Expenses Claim (Cont’d)

Published indices, eg: “Index Numbers of the


Costs of Labour and Selected Materials used
in Government Contracts” by the Hong Kong
Government Census and Statistics
Department.

Invoices and trade agreements to show actual


price increases.
B) Loss and/or Expenses Claim (Cont’d)

8) Cost claims from subcontractors

Where the Contractor incurs liabilities


under his subcontracts or supply
contracts as a result of a event for which
he is entitled to recover cost.
B) Loss and/or Expenses Claim (Cont’d)

9) Depreciation on assets

Where a montary claim arises from a


substantial delay to the contract period,
necessitating the Contractor’s plant and
equipment to be held on site for much
longer than planned, then the Contractor
incurs a depreciation in the value of those
assets. This loss would be recoverable.
B) Loss and/or Expenses Claim (Cont’d)

HK Government Form 1993 Edition clause 1(1)


defines “cost” as including “depreciation in value
of Construction Plant owned by the Contractor”.

The calculation may be based on actual market


values, if available, or representative values taken
from accounting practice.
B) Loss and/or Expenses Claim (Cont’d)

10) Financing charges

a. A debt which is paid late does not


entitle the recipient to interest at
common law
b. The interest or finance charges are
an integral part of the cost or loss
and expense
B) Loss and/or Expenses Claim (Cont’d)

c. If the value of work increase, the


additional financing ought to be
recovered in the rates for variations

Documents/information shall be provided to


substantiate his claim:-

i) Documentary proof of overdraft facilities


or money borrowing to finance the
expense.
B) Loss and/or Expenses Claim (Cont’d)

ii) Evidence of draw down of the overdraft


facilities or money borrowing.

iii) Borrowing ratio of the company.


B) Loss and/or Expenses Claim (Cont’d)

11) Delayed release of retention

A direct cost arising from the disruption


to progress which the Contractor would
usually be entitled to recover.

The period by which the release of


retention will be/has been delayed
multiplied by the finance charges incurred.
B) Loss and/or Expenses Claim (Cont’d)

12) Adjustment of levies

The value of the contract increases as


a result of the payment of additional
sums against claims.
B) Loss and/or Expenses Claim (Cont’d)

13) Disruption and loss of productivity claims

a. Works may be disrupted without a


delay to the contract completion
date.
b. Establish that a planned orderly timing
and sequence of events was affected
by causes within the Employer’s
control to the extent that the
Contractor was prevented from
carrying out the work in that planned
orderly timing and sequence.
B) Loss and/or Expenses Claim (Cont’d)

c. Many disruption claims fail because


the Contractor is unable to show that
the additional costs were caused as a
result of matters for which the
Employer/other party was responsible.
B) Loss and/or Expenses Claim (Cont’d)

d. To compare actual productivity during


a period of disruption with productivity
during a period when no disruption
was evident.

This method does not take into


account errors in the tender.
B) Loss and/or Expenses Claim (Cont’d)

e. i) Daily disruption schedules may be


used: the record, for example.
ii) Access to a particular area was
not available to the specified time,
or in the specified condition

iii) Labour and plant left idle as a


result for a recorded period of
time
B) Loss and/or Expenses Claim (Cont’d)

e. iv) Or a site instruction received at a


recorded time necessitated the
transfer of noted resources,
resulting in demobilization and
remobilization.
B) Loss and/or Expenses Claim (Cont’d)

f. The site diary could be better completed


with relevant information.

g. All such records must then be verified


and signed by the supervision consultant
as an accurate record.
B) Loss and/or Expenses Claim (Cont’d)

14) Acceleration claims

a. An express term of the contract or a


separate agreement
b. The Contractor is not entitled to
unilaterally decide to accelerate and
expect the Employer to pay the
acceleration cost.
B) Loss and/or Expenses Claim (Cont’d)

c. The Contractor is required to


demonstrate the cost of resources
which would have been employed had
no acceleration measures been taken.
B) Loss and/or Expenses Claim (Cont’d)

d. The acceleration costs might consist of:-

i) Deployment of additional plant,


formwork

ii) Deployment of additional workforce

iii) Working overtime

iv) Additional overhead and profit


thereon
B) Loss and/or Expenses Claim (Cont’d)

15) Quantum meriut

a. “the amount the Contractor


deserves” or “what the job is worth”

b. Payment on a quantum meriut may


arise:-
B) Loss and/or Expenses Claim (Cont’d)

i) Where there is no contract at all;

ii) Where changes are made under a


contract to a degree which renders the
work carried out substantially different
from that contracted.
B) Loss and/or Expenses Claim (Cont’d)

16) Ex-gratia claims

Claims which the Employer is under no


contractual obligation to pay.
B) Loss and/or Expenses Claim (Cont’d)

17) Common law claims

Claims for damages for breach of


contract at common law.
B) Loss and/or Expenses Claim (Cont’d)

18) Adjustment for overheads and profit in


variations

Refer to wording of loss and expense


clauses eg:
B) Loss and/or Expenses Claim (Cont’d)

a. RICS (HK Branch) 1986 Edition clause 24:

“If … the Architect is of the opinion that the


Main Contractor has been involved in direct loss
and/or expense for which he would not be
reimbursed by a payment made under any other
provision in the Contract by reason of the
regular progress of the Works … having been
materially affect … then the Architect shall
ascertain … the amount of such direct loss and
expense.”
B) Loss and/or Expenses Claim (Cont’d)

b. HK Government Form 1993 Edition


clause 63:

“If … the Architect is of the opinion that the


Contractor has been or is likely to be involved in
expenditure for which the Contractor would not
be reimbursed by a payment made under any
other provision in the Contract by reason of the
progress of the Works … having been materially
affected … then the Architect shall ascertain the
Cost incurred …”
B) Loss and/or Expenses Claim (Cont’d)

c. A variation causes a delay to the


contract period for which prolongation
costs are paid then it is necessary to
deduct from the prolongation costs the
amount of profit and overheads included

d. Only those variations causing the delay


in question should be considered
B) Loss and/or Expenses Claim (Cont’d)

e. Any variations which do not cause the


delay or which is not the subject of the
prolongation claim, should be ignored
B) Loss and/or Expenses Claim (Cont’d)

19) Time limits on recovery

a. Within six years of the cause for


contracts under hand

b. Within 12 years for contract under


seal
B) Loss and/or Expenses Claim (Cont’d)

20) The duty of mitigation

a. What steps the Contractor


takes to mitigate the effects of
the delay.

b. What steps the Contractor


takes to mitigate the losses.
The End

Thank You

Mr Tse Sek Chuen


Widnell Ltd
www.widnell.com
The End

Question
And
Answer