Potential heads of claim - Building Contract Claims - page 91

The application of this principle is illustrated by the example of plant
standing idle as a result of a variation order. The contractor would not be
entitled simply to accept the situation, but would be obliged to make
reasonable endeavours to use the plant productively elsewhere or to per-
suade the plant owner to accept an early return. In the first instance, the
costs of, say, moving the plant to another site so that it might be so used
would be recoverable as a part of a direct loss claim, provided of course that
this sum did not exceed the costs which would have been otherwise in-
curred. However, although the injured party must only take reasonable
measures and not unreasonable measures, the courts usually will not look
too critically in hindsight at his actions in attempting to mitigate. The crucial
question is whether, in attempting to mitigate, the injured party acted
reasonably 277 . Even if the actions of the injured party resulted in an increase
in loss, the cost will be recoverable if he acted reasonably 278 .
The position is, in fact, spelled out specifically in the extension of time
clauses of many standard form contracts (for example see JCT 98, clause
25.3.4) in relation to delay. The clause expressly requires the contractor to
use his best endeavours to prevent delay occurring and to mitigate the
effects of a delay once encountered. So far as the money claims provisions
are concerned, the general law which imposes a duty to take all reasonable
steps and prevent claims for damages which have resulted purely from a
failure to take such steps applies. It is for the party receiving the claim to
show that the claimant has failed to mitigate 279 . Therefore, when the con-
tractor submits an application for direct loss and/or expense, it is for the
architect to show that the contractor has not mitigated his losses. But
although that burden falls on the architect, he is entitled to seek relevant
information from the contractor so that he can form an opinion about the
matter.
6.2 Two basic claims situations
Many potential heads of claim are common to both. The first situation is
delay in completion of the contract works beyond the date when they
otherwise would have been completed or the date the contractor has under-
taken to complete them; this is often known as a prolongation claim and,
sometimes - inaccurately - as a claim for extended preliminaries. The
second is a claim which is not related to the date for completion of the
contract works. This is commonly referred to as a disruption claim . A disrup-
tion claim does not depend upon prolongation of the contract period and it
may arise where the works are completed within the contract period origin-
ally specified, where they are completed within a shorter period pro-
grammed by the contractor, or where they are completed after the end of
277 Banco de Portugal v. Waterlow & Sons Ltd [1932] AC 452.
278 Melachrino v. Nicholl & Knight [1920] 1 KB 693.
279 Garnac Grain Co Inc v. Faure & Fairclough [1968] AC 1130.