Loss and Expense

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Flashcards by , created almost 6 years ago

T017 & T016 Flashcards on Loss and Expense, created by alison_patey0437 on 12/04/2013.

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Created by alison_patey0437 almost 6 years ago
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Question Answer
what signs might be there that a contractor had financial difficulties? 1. industry rumors 2. over-valued applications 3. less labour on site 4. slow progress of works
How might cashflow show the problem? if monthly payment applications were way above pre-estimated cashflow
what is loss and/ or expense reimburses the contractor for direct loss and/ or expense incurred in 1. carrying out additional works 2.employers breach of contract
What are the relevant clauses in JCT SBC 11? 4.23 - 4.26
What are the procedures for claiming loss and expense? 1. as soon as regular progress is affected/likely to be affected/ or contractor becomes aware of any other matter that may cause them to incur loss and/or expense - notify in writing 2. contractor submit further info requested by A/CA 3. submit any further info requested by A/CA/QS
What are Relevant matters? the events that entitle the contractor to loss and/or expense, along with deferment of possession of site
What are the relevant events for JCT? there are 5 matters they are set out in clause 4.24 a) variations b) instructions c) execution of an approx quantity that was not a reasonably accurate forecast off quantity d) Suspension by the contractor for non-payment e) any impediment, prevention or defaultby the employer
what is the key thing to remember when assessing loss and expense claims its should be actual loss incurred by the contractor
what are the common heads of claim in loss and expense applications? a) prolongations (extra site overheads i.e. prelims) b) thickening of preliminaries (e.g. extra supervision required due to variations) c) disruption (causing plant/ labour to be underemployed - hard to prove) d) Increases in labour/ material costs during the period of delay e) Head office overheads f) loss of profit (commonly combined with head office overheads) g) finance charges (i.e interest) h) acceleration costs i) claim preparation costs
which heads of claims is not permissible? a) acceleration costs - cannot be instructed under JCT contracts b) claim preparation costs
How are head office overheads and loss of profits often calculated? using the formula - Hudson, Emdem or Eichlaey