Construction contracts will generally provide for the contractor to claim direct loss and/or expense as a result of the progress of the works being materially affected by relevant matters (or compensation events, etc.) for which the employer is responsible.

Depending on the standard contract form or related subcontract in question, it may include some or all of the following:
👉 Failure to give the contractor possession of the site

👉 Failure to give the contractor access to and from the site

👉 Delays in receiving instructions

👉 Opening up works or testing works that then prove to have been carried out in accordance with the standard form contract

👉 Discrepancies in the contract documents

👉 Disruption caused by works being carried out by the employer

👉 Failure by the client/employer to supply goods or materials

👉 Instructions relating to variations and expenditure of provisional sums

👉 Inaccurate forecasting of works described by approximate quantities

👉 Issues relating to the construction (design and management) regulations 2015 (cdm).

👉 Claims may comprise costs resulting from disruption to the works or from delays to the works (prolongation).

👉 Such claims need not necessarily result in a delay to the completion date, and so claims for extensions of time do not always mean that a claim for loss and expense is payable.

👉 Claims are restricted to ‘direct’ loss and expense and so ‘consequential losses’ (such as lost production) are generally excluded (see Hadley v Baxendale (1854)).

👉 Direct losses are those that ‘flow naturally’ from the breach of contract. JCT, NEC, FIDIC and other contracts have differing views on whether items such as head office overheads can be included in claims for loss and expense, however, some court decisions have included and allowed such claims.