Under the JCT suite of contracts, a Relevant Matter is a matter for which the employer is responsible that materially affects the progress of the works and may entitle the contractor to make a financial claim for the direct loss and/or expense that it has incurred. Kara Price, a solicitor within Womble Bond Dickinson’s specialist construction team, gives some pointers.
A contractor can often claim loss and/or expense at the same time as an extension of time. The Hot Topics article in September on ‘Relevant Events’ dealt with extensions of time.
For the contractor to prove the direct loss and/or expense it has suffered, it must show:
- That it is entitled to claim additional costs under the terms of the contract; and
- That the employer has breached the contract.
Relevant Matters may include:
- Failure to give the contractor possession of the site;
- Failure to give the contractor access to and from the site;
- Delays in receiving instructions;
- Failure by the employer to supply goods and/or materials; and
- Disruption caused by work carried out by the employer.
Prudent employers will often amend or delete Relevant Matter provisions to limit the contractor’s entitlement to claim direct loss and/or expense, for example by:
- Deleting the entitlement to any loss and/or expense for the discovery of any antiquities; or
- Amending the contract to ensure no entitlement for loss and/or expense for the contractor’s own error, omission, negligence, breach or default on behalf of the contractor or any contractor’s persons.
Ordinarily, a subcontract will mirror the terms of the main building contract or contain a deemed awareness provision so that any employer amendments or deletions will be passed down the supply chain.
- Review the contract – have any amendments been made which could limit your ability to claim for direct loss and/or expense?
- Review the contract mechanisms in respect of notification of a Relevant Matter.
- Ensure you have a good record-keeping system – if a claim is made, an assessment of the loss and/or expense already incurred and any further amounts likely to be incurred will be required.
FIS members requiring assistance with this topic can contact Philippa Jones through the FIS Legal Helpline.
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