Construction Contract Claims: Managing Delays, Variations, and Defects

In construction and engineering projects, claims under a construction contract are frequent. These claims often encompass requests for extensions of time, compensation for loss and expense, payments for variations, quantum meruit claims, remedies for defective works, liquidated damages, and breaches of duty by professional consultants . It is essential for contractors, employers, architects and consultants to understand these claims, particularly within the context of Cyprus law.

Extensions of Time and Loss and Expense Claims

One of the most frequent claims in construction projects is for an extension of time. This claim arises when a contractor experiences delays beyond their control. The contractor must demonstrate that the delay is due to an event covered under the contract. If the claim is valid, the contractor is entitled to additional time to complete the project without facing penalties.

Alongside extensions of time, contractors often claim for loss and expense. These claims cover additional costs incurred due to delays, such as increased labour and material costs. Contracts usually have specific clauses that outline the circumstances under which loss and expense can be claimed and the process for quantifying these costs.

Variations in the Scope of Work

Variations to the scope of work are another common cause for claims. These changes can result from the employer's changing requirements or unforeseen site conditions. When a variation occurs, it often leads to additional costs and time extensions. Contractors must follow the procedures outlined in the contract to formally submit variation claims.

Quantum Meruit Claims

Quantum meruit claims arise when there is no agreed-upon price for the work done. This situation can occur if the work was performed outside the scope of the contract or under a letter of intent. Quantum meruit allows the contractor to claim a reasonable amount for the services provided, typically based on fair market rates.

Defective Works and Remedies

Claims for defective works are another significant area of concern. These claims involve rectifying work that does not meet the specified standards. The cost of remedial work can be substantial, and the contractor responsible for the defects may be liable for these costs. The aim is to restore the building to the condition it would have been in if the work had been performed correctly.

Liquidated Damages

Liquidated damages are pre-agreed amounts specified in the contract, payable if the contractor fails to complete the project on time. These damages are designed to compensate the employer for losses due to delays, such as lost rental income or additional financing costs. Such claims however need careful consideration since damages are not awarded automatically or “as a right”, but only following proof of loss.

Breach of Duty by Professional Consultants

Professional consultants, such as architects and engineers, have a duty to perform their services with reasonable care and skill. If they fail to meet this standard, resulting in additional costs or delays, they can be held liable for breach of duty. Claims against consultants typically require detailed evidence of negligence and the resulting impact on the project.

Conclusion

Understanding the various types of claims that can arise under a construction contract is essential for effectively managing construction projects. Whether dealing with delays, additional costs, defective works, or professional negligence, it is crucial to follow the contractual procedures and maintain comprehensive records to support any claims.

For tailored advice and legal support on construction contract issues, including delays and extensions of time, please contact Klitos Platis by email at klitos@kleanthousplatis.com.

The content of this article is valid as of the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Klitos Platis by email at klitos@kleanthousplatis.com.