Back to Basics #28 - Notices Relating to Loss and/or Expense under the JCT Contracts
Securing loss and/or expense under a JCT Contract requires the Contractor to provide notice - Clause 4.20 of the JCT Design and Build Contract.
If the Contractor is likely to incur any direct loss and/or expense, it is to provide notice in accordance with Clause 4.20. This is for any deferment in possession or if the regular progress of the Works is affected by a Relevant Matter. The Relevant Matters can be found in Clause 4.21 of the Contract.
The unamended JCT Contract contains five Relevant Matters. We would recommend during the contract negotiations, that any proposed amendments are reviewed to ensure that the number of Relevant Matters is not reduced.
Clause 4.20.1 requires the Contractor to notify the Employer as soon as the Contractor becomes aware (or should have become aware) of the effect and likely nature of any loss and/or expense. The Contractor should stipulate within the notice, which Relevant Matter has led to the loss and/or expense.
The second notice under Clause 4.20.2 should contain the Contractor’s assessment of the loss and/or expense which is likely to be incurred along with all information which could reasonably be expected to be provided for the Employer to ascertain the loss and/or expense incurred. This information can, if known, be submitted with the first notice.
The Contractor is then to update the assessment and information at monthly intervals until all information reasonably required has been provided, to allow the Employer to ascertain the amount of any loss and/or expense due.
Within 28 days of the initial assessment and 14 days from each update, the Employer shall notify the Contractor of the amount of loss and/or expense ascertained. This should be insufficient detail to allow the Contractor to identify any differences between the Employer's assessment and its own.
Any amount ascertained by the Employer should be added to the Contract Sum in accordance with Clause 4.22.
Finally, we would recommend that each party ensures that they are familiar with the address and format, which is required for the service of a notice. The Contract Particulars, Clause 1.7 is the location where both the Employer and Contractor’s addresses can be found. The notices are to be in writing in accordance with Clause 1.7.
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Sheffield (Head Office)
The Annexe 260 Ecclesall Road South Ecclesall Sheffield S11 9PS Tel – 0114 230 1329
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London
Adam House 7-10 Adam Street London WC2N 6AA Tel – 020 7520 9295
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Liverpool
Horton House Exchange Flags Liverpool L2 3PF Tel- 0114 230 1329
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Manchester
3 Hardman Street Manchester M3 3HF Tel – 0114 230 1329
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Birmingham
Birmingham Business Park 4200 Waterside Centre Solihull Parkway Birmingham B37 7YN Tel – 0121 481 2381