Claims in Construction Contracts

Questions and Answers

What is the consequence of employer's risks?

Improvement in worker productivity

Increase in the costs of works (correct)

Guaranteed project completion

Decrease in the duration of the project

What payment is due in case of contract termination due to war?

No payment required

Full payment for all work

Partial payment based on progress

Payment for completed work only (correct)

When can either party be released from contract performance?

If external circumstances make it impossible to fulfill the contract (correct)

At any point during the contract period

Only if both parties agree

Only if one party defaults

What does employer's liability typically cover?

Damage resulting from special risks Signup and view all the answers

What should a contractor expect if a war hinders the execution of works?

Potential compensation for incurred costs Signup and view all the answers

In what situation can a contractor claim payment for circumstances outside the parties' control?

During any part of the contract term Signup and view all the answers

What is an example of a special risk for which a contractor may seek payment?

Destruction caused by terrorism Signup and view all the answers

What is the typical outcome of an increase in costs due to employer's risks for a contractor?

Increase in contractor’s claims for compensation Signup and view all the answers

What right does the employer usually have regarding variations to the works?

The right to introduce amendments at any time Signup and view all the answers

Under what circumstance can the contractor refrain from agreeing to a variation?

When the proposed variation requires high cost or unacceptable extension Signup and view all the answers

What is the role of the engineer in issuing a variation order?

To make any variation without limitations as defined in the contract Signup and view all the answers

What can the contractor request if they wish to introduce changes to the work?

Consent from the employer Signup and view all the answers

What must the contractor do in response to the engineer's instructions regarding variations?

Comply with the engineer's instructions concerning variations Signup and view all the answers

Who can submit claims for damages caused by the contractor's plant and equipment?

Third party Signup and view all the answers

What type of remains may prompt specific instructions from the engineer?

Valuable coins Signup and view all the answers

Which party is responsible for costs associated with granting access routes as per the engineer's request?

Contractor Signup and view all the answers

What leads to costs incurred due to the repetition of specific tests?

Engineer’s inspection results Signup and view all the answers

For what reason might claims be submitted for the costs of granting facilities?

As per engineer's instructions Signup and view all the answers

What is a potential basis for claims related to bridges and roads?

Contractor's plant and equipment Signup and view all the answers

Which party suffers costs incurred from the rejection of specific tests?

Employer Signup and view all the answers

What type of value is associated with the historical importance of site discoveries?

Cultural significance Signup and view all the answers

What is one of the primary aims of the prompt notice mentioned in the content?

To investigate the claim facts and financial results while the event is still recent. Signup and view all the answers

What happens if both parties fail to avoid the grounds of the claim?

Giving notice of the claim becomes purposeless. Signup and view all the answers

During a dispute involving a seaport construction project, what did the contractor fail to do according to the Government's plea?

Give notice of the intention to claim as required. Signup and view all the answers

What risk did the contractor cite in their claim after the completion of the project?

Fear of damage from the possible presence of undiscovered mines. Signup and view all the answers

What did the Government provide to the contractor before the contract was signed?

A certificate about possible risks related to unexploded mines. Signup and view all the answers

What was the first edition of the contract called?

Contract for Construction Signup and view all the answers

Under what circumstances can a contractor claim additional amounts or time?

If the execution circumstances are different from what was known or foreseen Signup and view all the answers

Which party has authority in managing the project according to the FIDIC forms of contract?

The engineer Signup and view all the answers

What is NOT one of the engineer's responsibilities in project management?

Financial auditing Signup and view all the answers

How do the FIDIC conditions of contract differ from fixed-price contracts?

They request contractors to submit claims based on unforeseen events Signup and view all the answers

What type of risks are associated with long-term contracting as per the content?

Increase in prices and wages Signup and view all the answers

What is considered ideal for the benefit of the employer in relation to the contractor's claims?

Drafting contracts that allow claims for risks during execution Signup and view all the answers

Which factor does the engineer NOT base his decisions on?

Personal opinions Signup and view all the answers

Study Notes

Claims and Responsibilities in Construction Contracts

Various claims can arise from the discovery of fossils, valuable items, or historical remains during construction, with contractual obligations defined by specific clauses.
Contractors may submit claims for damages due to access route disruptions caused by their equipment impacting nearby infrastructure.
Employers are responsible for costs associated with delays caused by defective tests requested by engineers.
Special risks resulting in damage to works or equipment from employer's liabilities can lead to claims.

Contractual Clauses and Causes for Claims

Clauses specify payments due to war-related project executions or unforeseen circumstances preventing contract performance.
The FIDIC forms of contract allow contractors to claim additional costs or time for unforeseen execution challenges perceived during tender evaluation.
Primary responsibilities of engineers include approval, inspection, certification, and project management decisions influencing both parties' rights and obligations.

Engineer's Authority and Variations

Engineers can authorize variations in project specifications, which contractors must comply with, ensuring the right to seek additional time and compensation.
Contractors sometimes initiate changes to achieve better execution conditions or resource alignment for project completion.

Notification and Claim Filing

Prompt notification of claims within 28 days is essential to investigate facts and predict financial impacts, aiding in budget adjustments.
Early notification allows for identification and resolution of potential disputes before they escalate.

Case Study: Mine Discovery

An example involving a contractor claiming millions after discovering undisclosed mines highlights the necessity of prior notification of potential risks.
Claims can be rejected if parties did not adhere to notice requirements or stipulations concerning evident risks before contract signing.

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Description

Explore the complex world of claims and responsibilities in construction contracts. This quiz covers various types of claims that may arise during construction, the roles of contractors and employers, and key contractual clauses that influence these claims. Test your knowledge on the implications of unexpected events and liabilities in construction projects.