Civil Engineering Reference
In-Depth Information
Strictly speaking, that is correct. The only clause in MW that mentions loss and/or expense
is clause 3.6.3. It provides that if the architect issues an instruction requiring an addition to
or omission from or any other change in the Works or the order or the period in which they
are to be carried out and there is a failure to agree a price before the contractor carries out
the instruction, the instruction must be valued by the architect.
The architect is required to value the instruction on a fair and reasonable basis using any
prices in the priced document. Significantly, the valuation must include any direct loss and/
orexpense that thecontractor hasincurred asaresult ofregular progressoftheWorksbeing
affected by the contractor's compliance with the instruction. The grounds on which the ar-
chitect can include loss and/or expense are obviously quite restricted.
It is clear from the wording of clause 3.6 that the architect's inclusion of loss and/or ex-
pense in the valuation does not depend on any application by the contractor. Indeed, the
onlytimethecontractorisexpresslyrequiredtoprovideinformationtothearchitectisunder
clause 4.8.1, where the contractor must provide all documentation reasonably required for
computation of the final certificate.
Incalculating thevaluation,thearchitect willnodoubtaskthecontractorforinformation.
Indeed, in practice most contractors will provide information in the form of an application
for payment on a monthly basis. Although the contract does not preclude such applications,
it does not confer any status upon them. The architect may take notice of or ignore the in-
formation as he orshe deems appropriate, because the only factor the architect needs to take
into account is the priced document, whether that is a priced specification, work schedules
or a schedule of rates. It is entirely a matter for the architect how the loss and/or expense
is calculated. Many architects link the amount to the length of any extension of time that
has been given on account of architect's instructions. Although one can see some logic in
this approach, there is no justification for arriving at the loss and/or expense by multiplying
the number of weeks by the amount the contractor has inserted in the priced document as
its weekly preliminaries cost. Loss and/or expense is the equivalent of damages at common
law. As such, the damages must be proved; the architect must secure the necessary evidence
toshowhowmuchlossthecontractorhasactuallyincurred.Atbest,thepreliminariesfigure
in the priced document is the contractor's best estimate at tender stage. It may be an under-
or an overestimate. It certainly will not represent actual costs.
ThetermsofMWcontainnomechanism toenablethecontractor tomakeaclaim forloss
and/or expense. MW does not have the equivalent of clause 4.23 of SBC or clause 4.17 of
IC.Therefore,thecontractorcannotmakeaclaimunderthecontractforlossand/orexpense
forinformationreceivedlate.Allisnotlost,however.Thereisabsolutelynothingtostopthe
