AZEEMUL AZAM BIN MOHAMAD

2015146281
AP2466E
THE RELATIONSHIP OF TIME AND MONEY CLAIM AS EXPOUNDED IN PAM
AND PWD SFOC

CLAIM
MONEY TIME

Client Claim Contractor EOT

from Claims from
Contractor Client

Liquidated
Damages

Direct Loss & Interim Variation Order

Expense Payment

Relationship claim between money and time

Extension of time EOT in construction contracts

Construction contracts generally allow the construction period to be extended where

there is a delay that is not the contractor's fault. If the contract administrator accepts that the
delay was caused by a relevant event, then they may grant an extension of time and the
completion date is adjusted. The contractor is required to prevent or mitigate the delay and any
resulting loss, even where the fault is not their own.

Assessing claims for an extension of time can be complicated and controversial. There
may be multiple or concurrent delays, some of which are the contractor's fault and some not.
There are many occasions where contractors contribute to delay themselves by their
performance during design periods, when producing drawings, mock ups and samples or in
inter-facing with sub-contractors.
 Claims should be judged against the actual progress of the works, not the programme,
and must demonstrate the link between the breach (cause) and the delay. The contract
administrator may review extensions of time after practical completion and further adjust the
completion date. Mechanisms allowing extensions of time are not simply for the contractor's
benefit. If there was no such mechanism and a delay occurred which was not the contractor’s
fault, then the contractor would no longer be required to complete the works by the completion
date and would only then have to complete the works in a 'reasonable' time. The client would
lose any right to liquidated damages. Claims for extension of time can run alongside claims for
loss and expense (relevant matters) however, one need not necessarily lead to the other.

Relevant Case

Peak Construction (Liverpool) Ltd V Mckinney Foundation Ltd (1970)

 The Court of Appeal held that Peak was not entitled to recover Liquidated Damages
from McKinney as the corporation was not entitled to recover those Liquidated
Damages from Peak. The Court of Appeal found that at least part of the 58-week delay
had been caused by the corporation itself, and the extension of time clause in the head
contract did not enable the corporation to extend time for its own delays. Further, no
attempt had been made by the corporation to extend time. Accordingly, there was no
date from which Liquidated Damages under the head contract could commence

Definition of claim in construction

Claims commonly arise between the parties to construction contracts. This can be as a result of
problems such as; delays, changes, unforeseen circumstances, insufficient information, and
conflicts.

Claims might be made for loss and expense, extension of time, liquidated damages, and so on.
The contract should set out what can constitute a claim and how it should be dealt with. There
may also be claims associated with the appointment of consultants.
Money Claim Case Study
Crosby vs. Portland UDC (1967) and Merton LBC vs. Leach (1985)
The courts found in favour of the contractor in both occasions due to the impracticality to identify the
actual delay and cost caused by each individual matter that the ‘delay’ and ‘loss’ should be rolled up.

These two cases caused a proliferation of global claims as contractors the world over argued that events
which occurred on their contract were so complicated as to make it impracticable, if not impossible to
assess the additional expense cause by delay and disorganisation due to any one of the events in isolation
from the other events.

2. Claim in Time

In Contract act 1950, time of completion must be within “reasonable time”. In construction
contract, reasonable time is deemed to be the time offered by contractor in his tender.

Extension of Time (EOT) is the allowing the contraction period to be extended and the delay
that is not the contractor fault. If the client cause delay and there no EOT provision, the
contractor fails to grant EOT, the time will become large. c. The delaying events listed in the
standard forms of contract. i. PAM 2006 - Clause 23.8 (a)-(x) ii. PWD FORM 203A – Clause
43.1 (a)-(j)
 Comparison Between PAM And PWD
PAM CONTRACT 2006
- Based on PAM 2006 clause 23.0 it
is stated that the time for the
contractor can claim which is
Extension of Time (EOT) but under
the causes of relevant events which
stated in the clauses of 23.8.
- The contractor can claim the EOT
for continuation of work on site, but
when the EOT has expires and the
contractor did not finish the work,
the client can claim Liquidated
Damages (LD) towards the
contractor under the Clauses of 22.0
PAM 2006.
- When the contractor fails to
complete the works by the
completion date, the architect can
issues the certificate of non-
completion. Thus the contractor
shall pay the amount of money to
the client in amount of stated by the
client in each day of delay.
PWD FORM 203A (Rev.1/2010)
- The relationship of time and money is where
the client claims either Liquidate Ascertained
Damages (LAD) towards the contractor for the
delay when the Extension of Time (EOT) is no
longer valid.
- Upon it becoming reasonable apparent that the
progress of the work is delayed, the contractor
shall forthwith give written notice to the S.O to
the causes of delay and relevant information
with supporting document enabling the said
officer to form an opinion as the cause and
calculation of the length of delay.
- Therefore in the period given by the S.O to
finish the work which is the EOT, the
contractor must finish the work before the EOT
expires, thus the contractor can also claim the
loss and expenses in the clause 44.0 under the
PWD FORM 203A where the contractor shall
within 30 days of the occurrence of such event
or circumstances or instruction give notice in
writing to he S.O of his intention to claim for
such direct loss or expenses together with a n
estimate of the amount of such loss and/or
expenses. But this is stated under the clause of
43.1 (c), (d), (e), (f) and (h).