FORMULATION

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LECTURE 3

• FORMULATION PRESENTATION OF EOT CLAIMS

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CONTENT FOR FORMULATION PRESENTATION OF EOT
CLAIMS

• Practical completion
• Extension of Time L. D.
• Presentation of Extension of Time claim
• Delay within float time by Architect, but later
  delay by the contractor
• Delay not on the critical path
• Concurrent delay by both parties
• Concurrent delay followed by subsequent delay
• Delays after the Contract Completion Date
• Prevention, presentation assessment
• Summary on Extension of Time claims
• Recovery of loss and / or Expenses and / or
  Damages

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DATE FOR / OF COMPLETION
Date for (Practical) Completion

• Specified completion date agreed at tender time
• Set at the outset of the contract
• The date calculated from the date of possession
  including, if any, EOT granted

Date of (Practical) Completion
The actual date that the contractor completes
his work
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IMPLICATION OF P.C.

• Relieve contractor from (further) L.D.
• Employer is entitled to take possession of the
  site.
• Employer to take out insurance
• D.L.P. commences
• Release half retention
• End of regular interim certificate
• Measurement period commences
• Arbitration can be opened

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EXTENSION OF TIME
Delay not by fault nor responsibility
of the contractor
Extension of time
Relieve contractor from paying L.D.
to the Employer
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EXTENSION OF TIME
Delay by Employer
No
Relevant clause in Contract for EOT
Architect cannot grant EOT
Yes
Time at large, i.e. complete within a reasonable
time
Architect grants EOT
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TIME AT LARGE
??? Reasonable time ???
Reasonable time is equated to the amount of delay
Failure to complete within a reasonable time
Unliquidated Damages (U.D. not L.D.)
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What is Liquidated Damage ?

• It is a kind of contractual provision in which a
  specified sum of money is to be paid by one party
  to the other, or the forfeiture of goods or other
  property by that party to the other in event of
  particular specified breaches of the contract
  committed by the former party.

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L.D. PENALTY

• L. D.
• Genuine pre-estimate of the loss
• Penalty
• Extravagant compared with the greatest possible
  amount of loss
• It does not matter whether the term used is L.D.
  / penalty
• Non completion certificate needs to be issued
  before deducting L.D.

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COULD THE EMPLOYER DEDUCT L.D. IF HE HAS NOT
SUFFERED ANY LOSS?

• As far as the L. D. amount is a genuine
  pre-estimate of the possible loss, the L.D. is
  enforceable.
• They are recoverable whether or not the employer
  can prove that he has in fact suffered loss or
  even if, in the event, there is no loss at
  all.case Clydebank Engineering Vs Castende.

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ARCHITECT ASSESSES EOT AT HIS BEST KNOWLEDGE

• If the contractor did not give notice of claim
  or did not furnish full particulars of the EOT
  claim, the Architect / Engineer must do his best
  to estimate the EOT that can be granted to the
  contractor.
• Case Merton v. Leach
• However, the contractor cannot complain if the
  EOT granted, based on the inadequate information
  the Architect has, is not up to his desired
  period.

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CAN THE ARCHITECT USE THE CONTRACTOR'S FLOAT TIME
?

• The float in the Contractor's program is for the
  benefit of the contractor
• Delay on the part of the Employer which reduces
  that float may have to be taken into
  consideration when considering the time required
  for completion
• However, if the subsequent delays are outside the
  float of the non-critical activities, EOT is
  entitled eventhough the delay event is a
  non-qualifying event provided that sufficient
  float is used up by a qualifying event before

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DELAY NOT ON CRITICAL PATH

• If delay occurs to activity not on the critical
  path and the total delay to the activity does not
  make it critical, then no extension of time will
  be granted as there is no effect to the
  completion date

Activity on non-critical path
No EOT for delay within this time limit
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CONCURRENT DELAYS
Delay by the Contractor
Delay by the Architect / within the control of
the Employer

• The contractor may not recover the loss
  expense for the period delay by the Architect if
  he has some contribution in the delay

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CONCURRENT DELAY - CRITICAL NON-CRITICAL
D1
D2
D1 D2 are concurrent, i.e. at the same time

• If D1 is a qualifying delay/ relevant event, D2
  is not ?EOT can be granted.
• If D2 is a qualifying delay / relevant event, D1
  is not ?no EOT can be granted.

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CONCURRENT DELAY FOLLOWED BY SUBSEQUENT DELAY

• If the subsequent delays are still within the
  float of the non-critical activities, then no EOT
  would be entitled
• If the subsequent delays are outside the float of
  the non-critical activities, EOT is entitled
  eventhough the delay event is a non-qualifying
  event provided that sufficient float is used up
  by a qualifying event

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CULPABLE DELAY

• IN THEORY

A contractor is late and liquidated
damages are incurred
Client issues variations which will further
delay the completion date (culpable delay)
Time is set at large
Client's rights to deduct L.D. are forfeited
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DELAY AFTER THE CONTRACT COMPLETION DATE

• If extension of time has not been made for
  previous qualifying delays, Architect has no
  power to extend the time for completion for a new
  qualifying event occur after 'any extended time
  previously fixed '
• Therefore, EOT must be granted for all known
  delays before the existing completion date has
  passed, otherwise time will be at large and L. D.
  cannot be enforced.

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Revised completion date
Unknown gas ?A.I.?reroute
Delay by Main Contractor (excavation for final
connections to the foul drainage)
EOT for only A.I. Works if it is on the critical
path
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Revised completion date
Architect instructs to cease work add manholes
Delay by Main Contractor (excavation for final
connections to the foul drainage)
Delay due to additional manholes
EOT for total delay as Architect should have
issued the instructions
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EOT AFTER DATE FOR COMPLETION

• Most contracts do not contain the essential
  machinery to enable the employer to deduct L. D.
  for the period when the contractor is in culpable
  delay
• The contractor's liability for L. D. may
  evaporate if employer causes delay after the
  extended completion date. However, the employer
  has to prove Unliquidated Damages for deduction.

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DAMAGES
Substantial Damages
Actual loss / damage
Nominal Damages
No loss / damage at all
Exemplary (Punitive, vindictive) Damages
Not in contract, in tort only
General Damages
1. For loss presumed w/o proof 2. Loss incapable
of precise estimation, e.g. pain
Special Damages
1. For loss need to be proved 2. Out of pocket
expenses or earning loss
Liquidated Damages
Genuine pre-estimate of loss fixed by contracting
parties
Unliquidated Damages
Amount fixed by court
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PREDOMINANT CAUSE OF DELAY
Ignored
Inclement weather
CONSTRUCTION PERIOD
Industrial relations problem
Works is stopped
FIRST OCCURING (PREDOMINANT) CAUSE
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CONDITIONS PRECEDENT
Depends on the conditions (and special /
supplementary conditions, if applicable) of
contract, the following conditions are precedent
to granting EOT

• Notice
• Mitigate the delay
• Details must be given as soon as possible
• Within the time limit specified, if any.
• (time barred)
• The costs and expenses must not be
• duplicated in a variation.

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PREVENTIVE MEASURES OF DELAY

• Improve and adhere to quality assurance programs
• Review the contract carefully
• Review the program of works carefully
• Establish an early warning system including
  diaries, reports and concise filing systems
• Be prompt in the request for variation orders
• Act quickly do not ignore the problem
• Recognise the responsibility in the project team,
  work with the other professional members and
  consultants.
• Identify the dates when the work associated with
  potential variations started and finished.

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PRESENTATION OF EOT INCLUDES

• Supporting records particulars
• activities status
• dates
• events
• Narrative of the events
• Effects on progress
• No. of days requested to be granted for extension

• Cause of delay
• Contractual ground
• Delay commencement
• Delay period
• Notice of delay
• effects of the delay
• estimated delay
• Program before delay
• Program after delay

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EOT CLAIMS ASSESSMENT

• Delay due to weather must be considered in
  relation to the work being carried out by the
  contractor at the time of the delay and not by
  referencing to the work which could or should
  have been happening in accordance with the
  Contractor's program of operations.
• If it is not possible to avoid delay due to the
  fact that neither party had realised sufficiently
  in advance that the information was necessary,
  the contractor is not entitled to an extension of
  time.
• Architect has no obligation to provide
  information to enable the contractor to move
  faster than envisaged.

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SUMMARY ON EOT CLAIMS

• Keep accurate up to the minute records
• Accept a fair settlement, mitigate losses at all
  times if appropriate
• Maintain an as built construction program
• Keep accurate site progress sheets
• Keep notes of discussions held, contractors or
  COW reports
• Keep a record of weather conditions
• Record the current workforce and equipment levels
• Identify the status of documented progress to
  which the variation or daywork items should
  relate
• Regular progress photographs also provide good
  records especially when the date and time is
  recorded on the plate.

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EOT AND COSTS
Granting EOT does not automatically allow
contractor for loss and expense, etc.
Loss expenses claims will be dealt with in
Lecture 4