Contract Law Presentation: Omitted Work, Loss, and Contractor's Profit

This presentation delves into the crucial question of whether a contractor is entitled to loss of profit when work is omitted from a construction contract. It outlines the fundamental responsibilities of a contractor, including compliance with the contract, adherence to specifications, and competent supervision. The presentation explores various reasons for work omission, such as design mistakes, employer breaches, and material inadequacies, emphasizing that the entitlement to loss or profit hinges on the party responsible for the omission. It highlights the Certificate of Non-Completion as a key legal document governing these situations, allowing for liquidated damages and contract termination under specific conditions. Furthermore, it examines the Extension of Time clause, which protects the contractor when omissions result from the client's fault. The presentation concludes by reinforcing that the determination of loss or profit depends on the assignment of responsibility for the omitted work, referencing relevant clauses and legal precedents.

PRESENTATION ON IF THE CONTRACTOR IS ENTITLED TO LOSS OR PROFIT IF THE
WORK IS OMITTED
A Paper on Contracts By
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Presentation
• This presentation focuses on the question if the contractor is entitled to
loss of profit in case the work is omitted.
• Some of the major functions of the contractor is to:
 Comply with the contract.
 Complete and contract the works in accordance with the contract which
entails all the drawings and specification.
 Ensuring that any sub-contractor complies with the contract
Providing competent supervision and labour.

• The contractor is however obligated to completing the
contract to the specified standard by the date of completion
or any extension to that granted date by the contract
administrator as well as obeying the instructions of the
contract administrator as long as the contract administrator
is acting within the authority provided by the contract.

Reasons for Omission of work
by Contractor
There are numerous reasons that may lead to the contractor omitting some work, these reasons
include:
 Mistake in the initial design.
 Breach by the employer.
 Termination of the contract by the client.
 Inadequate provision of the materials by the employer.
 Negligence of the client.
In case the contractor who is suppose to come of with the initial design according to the taste of the
client makes a mistake in the design leading to omissions in the final construction.

 Inadequate provision of materials by the employer may also
result to the contractor to intentionally omit some details to suit
the capital provided.
 An incompetent contractor is likely to omit some work due to
lack of necessary expertise to completely perform the work.
 The failure of the contractor to fully complete the work depends
on whose mistake it is that has led to the work no being
competed or omitted.

Effect of Omission of Work by
Contractor
 The question on if the contractor is entitled to loss of
profit in case there is an omission of any work depend
entirely on whose mistake has led to the work being
omitted.
 If the main contractor omits some work which are
stipulated in the contract, then the contractor will be
entitled to loss of profit as stipulated in the certificate of
non-completion ci 2.31.

Certificate of non-completion Cl 2.31
 The certificate of non-completion is a legally bidding
document meant to guide both the parties involved in
the contract when completion of the contract is in
question.
 This document gives a provision that in case the
contractor omits some work that are stipulated in the
contract signed by both the client and the contractor,
then the contractor is entailed loss of profit.

 Certificate of non-completion CI 2.31 gives the client an
authority to liquidate damages caused by the failure of the
contractor to complete the work and also the right to
terminate the contract in case an agreement on how the work
will be completed is met.
 The cost of the omitted work should then be determined by
the parties involved in the contract which should then be
deducted from the profit of the contractor.

Omission is not Contractor’s Fault
 Certificate of non-completion Cl 2.31 gives the contractor
is not is a provision in case the omission of work the fault
of the contractor.
 The contractor is allowed to Apply extension of time
(EOT).
 The extension of time clause (EOT) stipulates that the
client should take the risk in case there is need of
completion of the omitted work which occurred as a result
of a fault caused by the client.

• Completion of Omitted Work
 The contractor should ascertain whether work to
be completed beyond date of completion of the
whole contract before fixing a reasonable date
with reference to every re and then notifying the
client in writing.
 This decision is suppose to be made within a
duration of weeks as stipulated in the clause 2.29.

Conclusion
 From the presentation above, the question on whether the contractor is entitled to
loss of profit if work is omitted depend on entirely who is responsible for the
omission of work.
 If it is the mistake of the contractor, then the omitted work is liquidated and
deducted from the profit realized.

Bibliography
 Ashworth, A, Hogg, K and Higgs, C (2013) Willis's Practice and
Procedure for the Quantity Surveyor 13th ed., Chichester,
Wiley-Blackwell.
 Chappell, D (2014), The JCT standard building contract 2011:
an explanation and guide for busy practitioners and students,
John Wiley & Sons.
 Hackett, M, Robinson, I and Statham, G (2007) The Aqua Group
Guide to Procurement, tendering and Contract Administration,
Oxford, Blackwell Publishing
 Rawlinson, Michael (2011), A practical guide to the NEC3
engineering and construction contract, Wiley-Blackwell,
Chichester