Loss of Profits which contractor would have earned

Loss of profit which the contractor would otherwise have earned but for the delay or disrupion .
This is based on the argument that a contractor has lost the opportunity to earn addtional profit as a result of being delayed on another project . Perhaps he had to turn down a lucrative contract because this project continued to absorb his staff and labour .
If such losses have really been incurred , then very persuasive evidence will be required before any judge or arbitrator will consider making an award .

cONTRACTOR'S CLAIMS

• Delay in receipt of iunstructions , drawings details or levels from Architect . 
• Opening for inspection and testing where materials are found to be in accordance with contract 
• Delay in appointment of Architect or Quantity Surveyor . 
• Discrepancy or divergence in conditions , drawings specfications or bills .
• Delay arising from nomination of Subcontractors 
• Delay in receiving possession or access 
• Contractor suspending work in accordance with provisions of contract . 
• Not all ground sentitling contractor to entension of time lead to automatic recovery of loss and expense . 

Natural of loss and expense

• Actual losses of money ( which ought to have been received ) as a result of the circumstance sgiving rise to entitlement 
• Actual expenditure of money which ought not to have been made occasioned as a direct result of the same circumstance . " The primary meaning of the word expense is actual disbursemnents '. 
• Note that in all cases of loss and expense the contractor is under a duty in law to " mitigate his loss " so far as it may be reasonable for him to do so . 
• For example if a contractor is issued with a variation order which necessitates plant lying idle for some days , he ( the contractor ) would not be entitled simply to accept the situation , but would be bouind to make reasonable endeavours to use the plant productively elsewhere or to persuade the plant owner to accept an early return . 

loss and expense

DEfinition

• Loss and / or expenses caused by disturbance of regular progress of works 
• THis means that what is recoverable is the financial loss and expenses which directly and naturally results in the ordinary course of occurrence of events . 

Loss and expense 

Therefore a contractor who claims direct loss / pr expenses must establish by use of oral or documentary evidence the followings : 

- That he has suffered loss or incurred additional costs caused by occurrence of events specified in the provisions of Contract . 

Demoinstrate that the loss or expenses or additional costs are sufficiently linked to the events set out in the contract . 

- The loss or expenses or costs must be actual financial and not merelyu national loss . THe contractor must prove his case " on the balance of probabilities . " 

-Must be able to prove the loss or expense or additional costs , reasonably to establish the probability that it has been incurred .  

Interim Valuations For Private Client

• Valuation and checking of COntractors Interim Progress Applications For payment 
• Payment Recommendation 
• Identification and Pricing of COntract Variations and  
• General Procedure 
• Prior to issuing interim certificate , a QS must prepare interim valuation . 
• Main items to be considered
• i) Measured work , including preliminaries 
• ii) Value of variations and extras 
• iii) Value of nominated sub-con and suppliers work 
• iv) Fluctations 
• v) Unfixed materials on site 
• vi) Retention monies 
• Vii ) Previous payments 

• Valuation - as accurtate as possible 
• Contractor is entitled to toal value of work properly executed less a specified % of retention . 
• Improperly retained sum could strain contractor - pa his debts 
• Emplpyer must be protected agains over payment , if insolvencies of contractor occuyrs ,e xtra payment cannot be recovered . Liable to extra cost of selecting another contractor .  
• Amount of measurement to be depends on nature and complexity of wortks and the stage they have reached . 
• Common practice = contreactor and QS meet regularl for the purpose of measuring works . 

Purpose of Interim Valuation

Interim Valuation for Main Contractors and Sub-COntractor

• The submission of Interim Valuations and following up in order to agree payment '
• Valuing and negotiating Contract Variations in Accordance with the Terms of the COntract 
• Re-measuring work on-site . 

Payment

Variation

The term variation means the alteration or modification of the design , quality or quantity of the works including :

 A) The additional , omission or substitution of any works
 B) The alteration of the kind or standard of any materials and goods to be in the work
C) The removal from Site of any work executed , or materials and good brought thereon by the COntractor for the purposes of the Works other than work , materials and good which are not in accordance with the Contract , and
D) ANy changes to the provisions in the COntract with regards
 - Ay limitation of working hours
 - Working space
 - Access to or utilisation of any specification part of the Site .
 - The execution and completion of the work in any specific order .

But shall exclude any changes intended to rectify any negligence  , omission , default and / or breach of contract by the Contractor entirely at his own cost .

Each variation is considered separately and their net values carried forward to a general summary .

The total value of omissions and the total value of additions are computed to arrive at a et balance which is added to or deducted from the interim valuation .

Nominated subcontractor and suppliers accounts are also included in interim valuations as and when the works has been executred on-site or materials supplied .