7/23/2019 Construction Law - Answer - Regarding Charges for Termination

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Construction Law/Answered Question

Expert: Sanjay Khandelwal

Subject: Claim for Early Termination of Contract

Question:

Dear Sir,

I want to know that what are the cost elements categories that can be claimed fromthe Client if the contract is terminated prior to completion of Project Scope meaning

an early termination!

Is one entitled to claim the demobili"ation charges as well!

#e$%est yo%r answer %nder &IDIC!

Thank yo% and best regards

Answer: Dear Tari$ ' (hmad'ello

)o%r $%estion is not $%ite clear regarding the termination of contract! Please f%rnishthe complete information regarding the reason of termination of contract!

If the early termination of contract before completion of project scope for theEmployer*s con+enience or optional termination by reason of &orce aje%re, then-

.a/Employer will pay to the Contractor the amo%nt of any loss or damage s%stained bythe Contractor as a res%lt of this termination! 0r

.b1 the Cost of Plant and aterials ordered for the 2orks which ha+e been deli+eredto the 1b/Contractor, or of which the Contractor is liable to accept deli+ery3 this Plantand aterials shall become the property of .and be at the risk of1 the Employer whenpaid for by the Employer, and the Contractor shall place the same at the Employer4s

disposal-1c/other Costs or liabilities which in the circ%mstances were reasonably and

necessarily inc%rred by the Contractor in the e5pectation of completing the 2orks-.d1 the Cost of remo+al of Temporary 2orks and Contractor4s E$%ipment from the

Site and the ret%rn of these items to the Contractor4s works in his co%ntry 1or to anyother destination at no greater cost1- and

1e/ the Cost of repatriation of the Contractor4s staff and labo%r employed wholly inconnection with the 2orks at the date of termination!

It is clear that contractor is entitled to claim Demobilisation charges as well!2ith best regards,

S(67()

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