A claim for loss and expense is filed primarily because there is a delay or disruption in the time schedule. The unattributed costs due to the delays are added up and are sought from the defendant. Some of these costs include: wasted management time, loss of profits, or disruption cost.
Claims that are filed for poor workmanship or defects are mainly against contractors that do not perform sufficient work on a project. This means that there could be poor leadership or a poor choice of materials used that ends up causing issues within the structure of the building. This is a common occurrence in construction projects and you will see many of these claims filed.
If a contractor does not finish on the promised date, there could be a claim filed for liquidated damages. The amount of money that the employer lost because of the delay is added up and an estimate is made to seek out damages from the party. Many times a construction expert witness is hired to give their input based on their knowledge of construction projects that they’ve taken a part in.
When a contractor files a claim against the employer for more time, it’s because there is a possibility for a delay and instead of waiting it out and potentially being involved in having to pay back in damages, a claim to extend the completion date is created.
While claims are sometimes unavoidable, you can minimize risks by seeking opinions from the many construction advisory services out there that are ready to help you.
Bio: Lyle Charles is the president of Lyle Charles Consulting; a firm experienced in large change order of claim preparation and or analysis including review of cost overruns and lost profits from alleged defective/uncoordinated contract plan documents.