The short version
- Construction projects normally run over a long period of time, there are always claims that no one foresaw and there is often disagreement between the parties about partial requirements
- It is also only after completion that the parties have the prerequisites to decide on their individual partial claims, get an overview of the overall objections, etc.
- There is a need for a final final settlement and one must be sure that all claims and counterclaims are “on the table” so that a final line is set.
- The standard contracts have similar rules on the mechanisms to be used in final settlement.
- The general rule is that all claims and counterclaims the parties have against the other must be included in what is transmitted to the other.
- Claims and counterclaims etc. which are not included shall lapse with final effect.
- This applies regardless of whether the claims have been invoiced and paid previously, are invoiced but disputed or are new when the contractor's claim for final settlement is submitted.
- For its part, the builder must reiterate his objections to the claims made, and submit his own counterclaims (for example, daymulk), within his deadline for responding to the contractor's claim for final settlement.
- The deadlines for the contractor to submit his claim for final settlement, and for the builder to advance his objections and any counterclaim, are two months.
- The contractor's claim for final settlement shall consist of two parts, a final statement in which all claims he claims are stated, and a final invoice which normally reads on gross claims as stated in the statement, minus what the builder has paid.
- Note that the contractor has the right to correct his final statement within the expiry of the two-month deadline in execution contracts, but not in turnkey contracts.
- The builder has no corresponding right to correct regardless of the form of the contract.
