surely just about every claim on a contract comes about because something is defective or doesn’t happen (or at least doesn’t happen in good time)?

In another term, a "NO CLAIM" Contract is virtually a "ONE SIDED CONTRACT". It might be good as far the Contract itself is concerned, but in case of any dispute, certainly a "NO CLAIM CONTRACT" is a killer for the Employer in court of law.

Regards

Deb,

The closest thing to a no-claims contract I have come across is an open book, cost-plus type arrangement.

in such a contract the client agrees to pay all costs associated with the scope, plus a fixed profit.

The client has full rights to inspect the contractors accounts to ensure all claimed costs are justifiable, and reserves the right to termiante the contract at any time, paying all committed costs to date, plus the profits.

I’ve only seen this type of contract used in R&D projects where it is impossible to fix a price or timeframe in advance, such as developing new technologies for the defence industry.

Even in this type of contract, a form of claim is possible whereby the client rejects payment of some costs saying that they are not justifiably part of the scope and the contractor insists it is.

HTH

Dear Pranab,

What you need to do is write it down in your Conditions of Contract. The issue here is to get the other party to sign.

With kind regards,

Samer

Samer,

You’re correct when you say you don’t need standard forms of contracts for small projects - but actually you don’t need standard forms for any size of contract, just that it reduces tender costs and potential disputes, etc if they are used as Employers & Contractors are allegedly familiar with how they work.

Many of the disputes I get involved with on international projects have used bespoke forms of contracts, often if a the client has a lot of construction work done, the contract is the Employers "standard terms and conditions" or a Main Contractors similar own terms if a Sub Contractor is involved. Usually the dispute revolves around the interpretation of the contract so maybe that says something about the use of bespoke terms!

But for some projects, it’s better to use a bespoke form of contract closely tailored to the Employers requirements than try and amend a standard form.

Gotcha.

I’ve always considered a claim to be an assertion of right, but you define a claim as a frivoulous or fraudlent assertion of right. -A question of semantics!

So I guess we’ll need the original OP to clarify which definiton he’s using to properly answer his question!

Samer,

That is the general idea of the FIDIC contract.

Ever thought of changing career and becoming a salesman for FIDIC, lol.

Dear Andrew,

The FIDIC construction contract has been evolving during the past 90 years.

The main idea behind the Contract is to "share the Risks" associated with the Construction between the two parties.

With that in mind, and with the help of professionals, both parties can enter into a FIDIC construction contract with reasonable risks.

With kind regards,

Samer

Gary,

Or to put it another way, the disputes I deal with generally fall under two headings:

A. Claims as per:
1. Avoiding paying what has been previously agreed would be paid when they entered into the contract, (usually the Employer).
2. Use of clauses to try and invent a basis on which to get additional payment, (usually the Contractor).

AND

B. Misunderstandings of interpretation of contract terms - ie, determining proper entitlement and enforcing what has been AGREED. I don’t count these as "claims", they’re merely properly sorting out who owes who what and how much!

Construction contracts are full of clauses that set out both parties AGREEMENT that one party will pay the other party some money when some event happens. It is often forgotten that the parties have WILLINGLY AGREED that this should happen and have expressly stated so in their contract agreement.

Therefore when say a contractor requests additional payment he is often only asking for what the Employer has AGREED should be paid and after all, it is usually the Employer who imposes the terms of the contract. The word "claim" is maybe misplaced in this situation as it suggests that a party is asking for something that is not justified. "Entitlement" is a better word as all a party is doing in this situation is asking for what BOTH PARTIES AGREED should happen to actually happen!

Unfortunately either party often tries to:

1. Avoid paying what has been previously AGREED would be paid when they entered into the contract, (usually the Employer).
2. Use the clauses to try and invent a basis on which to get additional payment, (usually the Contractor).

In both cases, a party is trying doing something that is outside of what was originally AGREED and is probably better labelled a "Claim" - and is what usually then leads to disputes.

So, if you want to avoid "claims", either:
1. Don’t put in the clauses but the Employer will pay a premium, or 2. Stick to what has been AGREED by both parties at the outset and administer it in an fair manner.

Just because one party ends up paying the other party more money, does not make it a contract full of "claims", more money is paid because that’s what both parties had agreed would happen. Why are Employers, (usually), when they use a contract full of clauses that allow the contractor entitlement to extra money, so shocked when the contractor asks for that entitlement? Most of the time the contractor is merely asking the Employer to do what the Employer had AGREED he would do!