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Types of Claims

Different types of claims in COnstruction industry

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7 views

Types of Claims

Different types of claims in COnstruction industry

Uploaded by

chidvilas.contracts
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TYPES OF CLAIMS

1. Delay Claims

 Extension of Time (EOT): Contractors often claim additional time to complete the
project due to delays caused by factors like design changes, approvals not provided on
time, site access issues, or adverse weather conditions.
 Compensation for Prolongation Costs: If delays are caused by the employer or
unforeseeable events, the contractor may claim costs incurred during the extended
period (e.g., increased labor costs, machinery, site management expenses).

2. Disruption Claims

 These are claims for compensation due to the contractor’s work being disrupted,
resulting in loss of productivity or inefficiency. Common causes include delayed
instructions from the employer, unforeseen ground conditions, or logistical issues.

3. Acceleration Claims

 Claims for costs incurred by the contractor when the employer demands acceleration
of the work to meet deadlines. This can involve hiring additional resources or working
overtime to catch up on delays.

4. Variation Claims

 When changes to the scope of work are introduced, contractors may claim additional
payment for variations. This can involve adjustments in design, materials,
construction methods, or changes to the original specifications.

5. Price Escalation Claims

 If the contract allows, contractors can claim compensation for increases in the cost of
materials, labor, or fuel due to inflation, market volatility, or regulatory changes
during the project.

6. Force Majeure Claims

 Construction contracts typically include force majeure clauses that cover


unforeseeable events like natural disasters, pandemics (like COVID-19), war, or
government actions. Contractors may claim relief from performance obligations,
additional time, or costs due to such events.

7. Claims Related to Payment Delays

 Contractors may claim interest or compensation for delayed payments by the


employer, which disrupts cash flow. In India, payment issues are one of the most
common causes of disputes.
8. Termination Claims

 If a contract is terminated prematurely by either party, the non-defaulting party may


claim for costs and damages. This could include lost profits, costs of demobilization,
and compensation for work done up to the date of termination.

9. Defects and Rectification Claims

 Claims can arise from disputes over the quality of work or materials. The employer
may claim against the contractor for defects or non-compliance with specifications,
while the contractor may claim for additional costs for rectifying unforeseen issues.

10. Dispute over Liquidated Damages

 Employers may impose liquidated damages (LD) for delays beyond the agreed project
completion date. Contractors often contest the quantum or validity of such claims,
particularly if they can demonstrate that delays were not their fault.

11. Change in Law Claims

 If a change in law or regulations affects the project costs or timelines (e.g., new
environmental regulations, labor laws, or taxation changes), contractors may seek
compensation for the additional costs or time required to comply.

12. Claims Due to Regulatory Approvals

 Delays or difficulties in obtaining regulatory approvals, permits, or licenses


(environmental clearances, land acquisition issues) can lead to claims, particularly if
these responsibilities lie with the employer.

13. Safety and Environmental Compliance Claims

 Claims can arise if the contractor is required to adopt additional safety measures or
environmental protections that were not originally anticipated or stipulated in the
contract.

14. Dispute Over Measurement and Quantification of Work

 Contractors and employers may dispute the measurement or valuation of the work
completed. Contractors can claim for payment for work they consider completed,
while employers may dispute the accuracy or quality of the work.

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