Job Book 9th Edition - Book - Page 272
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Stage 5 > Construction: Supplementary Material: 5/SM9
5/SM9: Dealing with claims
(actions for the contract administrator)
Although the word is frequently used, ‘claim’ is something of a misnomer as
far as contract administration is concerned. The contract administrator has the
authority to act where the Building Contract conditions expressly provide for
entitlement in certain events, particularly concerning extensions of time and
reimbursement of loss and/or expense.
Claims not expressly within the Building Contract provisions or where, for various
reasons, a contractor has elected not to follow the procedures or is unable to
conform to the express terms would be ‘ex-contractual’ claims to be pursued in
arbitration or litigation.
Extensions of time
Most construction contracts include a mechanism for dealing in a convenient
way with events which might affect progress, which are beyond the control of the
contractor and which were not foreseeable at the time of tender. For this to be
operable there must be a clearly stated date for possession or commencement
and a date for completion. There is usually an extension of time provision and a
separate provision for dealing with additional costs which might arise.
Extensions of time provisions benefit the contractor in that they are relieved of
paying liquidated damages for failure to complete because of stated reasons.
The express terms are also very much in the client’s interests by keeping alive
the right to liquidated damages even though the contract period is extended
because of the client’s intervention. It is, of course, essential that such intervention
is included as an event covered in the Building Contract conditions, and that the
architect operates the extensions of time provisions strictly in accordance with
the contract requirements.
When dealing with extensions of time, remember the following:
• Respond to each and every proper notice of delay from the contractor – at
least it is evidence that the claim has been considered.
• When awarding extensions of time, do so only for the causes specified in the
Building Contract. State the causes but do not apportion. Keep full records
in case the award is contested.
• Comply strictly with the procedural rules. For example, if the contract
requires it, notify every named subcontractor of a decision.
• Observe the timescale if one is stated in the Building Contract. If none is
stated, act within a reasonable time.
• Form an opinion which is fair and reasonable in the light of the information
available at the time.
