Building Contract Claims

Many building projects are the subject of claims – the assertion of a right, usually by the contractor, to an extension of the contract period or an additional payment under the terms of the building contract. Many of these claims are unsound or ill-founded, often because the basic principles are misunderstood. This highly regarded book examines the legal basis of claims for extensions of time and additional payment, and what can and cannot be claimed under the main forms of contract. It includes chapters dealing with direct loss and expense, liquidated damages, extension of time, concurrency problems, acceleration, time at large, common law and contractual claims, global claims, and heads of claim and their substantiation. With the publication of the fifth edition, Building Contract Claims has been thoroughly revised to ensure it is fully up to date with the latest contracts, court judgments and building practice. Changes include: Coverage of over 60 additional relevant court cases Coverage of the 2005 JCT contracts suite Coverage of changes to the NEC contract Coverage of additional contracts such as Constructing Excellence; Measured Term Contract and the ACA PPC2000 contract together with the 2005 relevant JCT sub-contracts Important changes to liquidated damages and to extensions of time, and the giving of notices Appendix 1 has been substantially revised Like its predecessors, the fifth edition of Building Contract Claims will be essential reading for architects, contract administrators, project managers and quantity surveyors, as well as contractors, contracts consultants and construction lawyers.

Table of Contents:
Preface vii Acknowledgements x Contract abbreviations xi PART I 1 1 Introduction 3 1.1 Structure of the book 3 1.2 Types of claims 3 1.3 The basis of claims 8 1.4 Architect's and contract administrator's powers and liability to contractor 11 1.5 Quantity surveyor’s powers 16 2 Time 20 2.1 Time of the essence 20 2.2 Time at large 22 2.3 Extension of time clauses in contracts 26 2.4 Concurrency 32 2.5 Acceleration 40 2.6 Sectional completion 47 2.7 The SCL extension of time Protocol 51 3 Liquidated damages 57 3.1 The meaning and purpose of liquidated damages 57 3.2 Liquidated damages or penalty 58 3.3 Liquidated damages as limitation of liability 65 3.4 Sums greater than a genuine pre-estimate 66 3.5 Liquidated damages as an exhaustive remedy 67 3.6 Injunction 72 3.7 Liquidated damages in relation to loss 74 3.8 Where there is no breach of contract 75 3.9 Calculation of liquidated damages 77 3.10 Where there is partial possession 78 3.11 Maximum recovery if sum is a penalty 80 3.12 Maximum recovery if liquidated damages do not apply 82 3.13 Defences to liquidated damages in building contracts 84 3.14 Bonus clauses 93 4 Basis for common law claims 95 4.1 General 95 4.2 Implied terms 97 4.3 Variation of contract 103 4.4 Omission of work to give it to others 104 4.5 Extra work 107 4.6 Possession of site 109 4.7 Site conditions 113 5 Direct loss and/or expense 117 5.1 Defi nition 117 5.2 Direct v indirect 118 5.3 Exclusion of consequential loss 120 6 Points of principle 123 6.1 Measure of damages 123 6.2 Burden of proof 124 6.3 Res ipsa loquitur 125 6.4 Mitigation of loss 125 6.5 Betterment 127 6.6 Notices 128 6.7 Categories of claim 135 7 Potential heads of claim 140 7.1 Foreshortened programme 140 7.2 The ‘knock-on’ effect 143 7.3 The more common heads of loss 147 7.4 Cost of a claim 180 8 Causation 182 8.1 Theory 182 8.2 Use of networks 184 8.3 Float 189 9 Global claims 192 9.1 Basic principles of global claims 192 9.2 Unacceptable global claims 194 9.3 The current position 196 10 Preparation and substantiation of claims 201 10.1 Preparing a claim 201 10.2 Types of evidence required to support a claim 206 10.3 ‘Scott schedules’ 213 PART II 217 11 Extension of time under JCT standard form contracts 219 11.1 Standard Building Contract (SBC) 219 11.2 Intermediate Building Contract (IC and ICD) 248 11.3 Minor Works Building Contract (MW and MWD) 251 11.4 Design and Build Contract (DB) 254 11.5 Prime Cost Building Contract (PCC) 256 11.6 Management Building Contract (MC) 257 11.7 Construction Management Trade Contract (CM/TC) 259 11.8 Major Project Construction Contract (MP) 260 11.9 Measured Term Contract (MTC) 262 11.10 Constructing Excellence Contract (CE) 264 12 Liquidated damages under JCT standard form contracts 268 12.1 Standard Building Contract (SBC) 268 12.2 Intermediate Building Contract (IC and ICD) 273 12.3 Minor Works Building Contract (MW and MWD) 273 12.4 Design and Build Contract (DB) 274 12.5 Prime Cost Building Contract (PCC) 275 12.6 Management Building Contract (MC) 275 12.7 Construction Management Trade Contract (CM/TC) 275 12.8 Major Project Construction Contract (MP) 276 12.9 Measured Term Contract (MTC) 276 12.10 Constructing Excellence Contract (CE) 277 13 Loss and/or expense under JCT standard form contracts 278 13.1 Standard Building Contract (SBC) 278 13.2 Intermediate Building Contract (IC and ICD) 305 13.3 Minor Works Building Contract (MW and MWD) 309 13.4 Design and Build Contract (DB) 311 13.5 Prime Cost Building Contract (PCC) 315 13.6 Management Building Contract (MC) 316 13.7 Construction Management Trade Contract (CM/TC) 316 13.8 Major Project Construction Contract (MP) 316 13.9 Measured Term Contract (MTC) 318 13.10 Constructing Excellence Contract (CE) 318 14 Variations 319 14.1 Introduction 319 14.2 The baseline 320 14.3 Bills of quantities 321 14.4 Functions of the architect and the quantity surveyor 324 14.5 JCT Standard Building Contract (SBC) 325 14.6 JCT Intermediate Building Contract (IC and ICD) 345 14.7 JCT Minor Works Building Contract (MW and MWD) 350 14.8 JCT Design and Build Contract (DB) 352 14.9 JCT Prime Cost Building Contract (PCC) 360 14.10 JCT Management Building Contract (MC) 361 14.11 JCT Construction Management Trade Contract (CM/TC) 361 14.12 JCT Major Project Construction Contract (MP) 362 14.13 JCT Measured Term Contract (MTC) 364 14.14 JCT Constructing Excellence Contract (CE) 366 PART III 367 15 Claims Under The General Conditions of Government Contracts for Building and Civil Engineering Works (GC/Works/1(1998)) 369 15.1 Introduction 369 15.2 Extension of time and liquidated damages 369 15.3 Prolongation and disruption 377 15.4 Valuation of instructions 381 16 Claims under the ACA Form of Building Agreement (ACA 3) 385 16.1 Introduction 385 16.2 Extension of time and liquidated damages 386 16.3 Prolongation and disruption 395 16.4 Valuation of instructions 402 17 Claims under the ACA Standard Form of Contract for Project Partnering (PPC2000) 407 17.1 Introduction 407 17.2 Extension of time and damages 408 17.3 Loss and/or expense 413 17.4 Changes 415 18 Claims under NEC 3 Engineering and Construction Contract (NEC 3) 418 18.1 Introduction 418 18.2 Compensation events 420 18.3 Delay damages 444 19 Sub-contract claims 446 19.1 Introduction 446 19.2 JCT Standard Building Sub-Contract Conditions (SBCSub/C) 446 19.3 JCT Standard Building Sub-Contract with Sub-Contractor’s Design Conditions (SBCSub/D/C) 457 19.4 JCT Intermediate Named Sub-Contract Conditions (ICSubNAM/SC) 458 19.5 JCT Intermediate Sub-Contract Conditions (ICSub/C) 459 19.6 JCT Intermediate Sub-Contract with Sub-Contractor's Design Conditions (ICSub/D/C) 460 19.7 JCT Design and Build Sub-Contract Conditions (DBSub/C) 460 19.8 JCT Management Works Contract Conditions (MCWC/C) 462 19.9 ACA Form of Sub-Contract (ACA/SC) 465 APPENDIX 473 Example of contractor's claim for reimbursement of direct loss and/or expense under SBC with quantities clauses 4.23–4.26 – architect's and quantity surveyor's assessment with commentary 475 Table of cases 498 Table of standard form contract clauses 512 Index 523

About the Author :
David Chappell BA(Hons Arch), MA(Arch), MA(Law), PhD, RIBA with 50 years experience in the construction industry has worked as an architect in the public and private sectors, as contracts administrator for a building contractor, as a lecturer in construction law and contracts procedure and as a construction contracts consultant. He is currently Director of David Chappell Consultancy Limited, is a Specialist Advisor to the RIBA and RSUA and frequently acts as an adjudicator. He was Professor of Architectural Practice and Management Research at The Queen's University of Belfast and Visiting Professor of Practice Management and Law at the University of Central England in Birmingham. He regularly acts as an adjudicator and is author of many books for the construction industry.