Loss and expense
Construction contracts will generally provide for the contractor to claim direct loss and / or expense as a result of the progress of the works being materially affected by relevant matters for which the client is responsible, such as:
- Failure to give the contractor possession of the site.
- Failure to give the contractor access to and from the site.
- Delays in receiving instructions.
- Opening up works or testing works that then prove to have been carried out in accordance with the contract.
- Discrepancies in the contract documents.
- Disruption caused by works being carried out by the client.
- Failure by the client to supply goods or materials.
- Instructions relating to variations and expenditure of provisional sums.
- Inaccurate forecasting of works described by approximate quantities.
- Issues relating to CDM.
The contractor must give written notice of a claim as soon as it becomes reasonably apparent that the regular progress of the works is being materially affected. This need not necessarily result in a delay to the completion date, and so claims for loss and expense and claims for extensions of time do not necessarily always run together.
Claims are restricted to 'direct' loss and expense and so 'consequential losses' (such as lost production) are generally excluded. Direct losses are those that 'flow naturally' from the breach of contract. There is disparity between contract types about whether items such as head office overheads can be included in claims for loss and expense, and some court rulings have allowed such claims. If there are specific consequential losses which the parties to the contract wish to exclude, it may be prudent therefore to state these explicitly within the contract.
 Related articles on Designing Buildings Wiki
- Causes of construction disputes.
- Civil procedure rules.
- Concurrent delay.
- Consequential loss.
- Contract claims.
- Extension of time.
- Force majeure.
- Liquidated damages.
- Named specialist work.
- Professional indemnity insurance.
- Profit and overheads.
- Provisional sums.
- Relevant event.
- The distinction between liquidated damages clauses and penalty clauses.
Featured articles and news
What is Modernism?
Modernist architecture and its many international variations explained.
BRE support Europe-wide strategic heating plans for local and national authorities.
Work set to begin on 'one of America's greatest parks', which will be 10 times bigger than Central Park.
One of our most popular articles - RSHP's Mike Davies writes about the concept design process.
As Cuba mourn the death of Castro, major renovation of this symbolic landmark may be a reflection of the country's fresh start.
How cannabis plants are used to create an alternative building material with plenty of advantages.
What does Mayor Sadiq Khan's first policy statement mean for London's infrastructure?
Bjarke Ingels Group announced as winners of design competition for new residential landmark in Amsterdam.
Designing Buildings Wiki has reviewed a well-designed and researched set of architecture city maps.
Designing Buildings Wiki attended the second annual Building Live conference, tackling the challenges facing construction.