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JCT: Can revenue loss caused by contractor delays be recovered from contractor

+2 votes
We have a design build JCT contract for installation of Solar PV panels on roofs.
Contractor has had significant internal issues in meeting the administrative requirements for registration for the Feed In Tariffs resulting in large delays throughout the programme and subsequent loss of income for the project.
At outset of project they suggested 10 weeks to complete programme ( KPIs not written in original contract but controlled actively through programme via weekly spreadsheet control and monthly management reports) .Installation of panels has taken 20 weeks ( 16 per week) bur administrative registration between 2 and 10 per week resulting in loss of Feed in Tariff income.( circa £20000)..
asked Oct 21, 2015 in General by Anthony Walters  
recategorized Oct 21, 2015 by Glenn Hide

2 Answers

+1 vote
Best answer
Any loss which was reasonably foreseeable at the time the contract was entered into can be recovered. A loss of income from a commercial operation such as this is highly likely to have been foreseeable so would normally be recoverable.

One issue to be careful of is how liquidated damages have been dealt with. If they have been left blank or have been deleted then a damages claim, such as for loss of income, can stand. However, if any number, including "nil" has been entered then that rate will act as a complete remedy for delay related costs.
answered Oct 27, 2015 by Rob Horne (16,430 points)  
selected Mar 1 by Glenn Hide
0 votes
As Rob says, compensation can be claimed if there is a breach of contract and provided it is reasonably foreseeable at the time the contract was entered into.

However, for most JCT contracts, the damages for delay are limited to the 'liquidated damages' set out in the Contract Particulars. These cover all the losses that the employer may suffer in the event of delay including, one would have hoped, the loss of feed in tariff income.

Once those damaged are written into the contract, they are generally treated as your sole remedy.

If you did not include a level of LADs into the Contract Particulars then you can recover your reasonably foreseeable losses but would have to go to court and prove both breach and loss.
answered Nov 9, 2015 by Sarah.Fox (380 points)