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WorksheetsSBEQ2523 LOSS & EXPENSE
Total questions: 15
Worksheet time: 8mins
1. What is the main objective of awarding loss and expense under construction contracts?
A) To penalize the employer
B) To ensure early completion
C) To restore the contractor to the financial position they would have been in but for the delay
D) To cover all contractor’s profit margins
2. Which law in Malaysia codifies the principle on damages as outlined in Hadley v Baxendale?
A) Arbitration Act 2005
B) Contracts Act 1950, Section 74
C) Specific Relief Act 1950
D) Evidence Act 1950
3. What was held in Fateh Construction v Maharani Specialist Hospital regarding loss claims?
A) Contractors are entitled to claims without evidence
B) Contractors must prove actual loss and demonstrate mitigation
C) Employers are not liable for prolongation cost
D) Claims can be based on estimated figures alone
4. Under which standard form clause can a contractor claim for loss and expense in PAM 2006?
A) Clause 44
B) Clause 20
C) Clause 24
D) Clause 10
In Sunissa v Kerajaan Malaysia, what did the court emphasize regarding notice?
A) Late notice is acceptable
B) Verbal notice is sufficient
C) Notice is not required
D) Timely written notice is mandatory as a condition precedent
6. What must a contractor prove to succeed in a prolongation cost claim?
A) Delay only
B) Financial loss only
C) Both critical delay and associated financial loss
D) Early completion and loss of opportunity
7. In Croudace v London Borough of Lambeth, the court held that:
A) The employer can reject a claim without consequences
B) The architect's failure to assess a valid claim can make the employer liable
C) Only arbitration can resolve disputes
D) Contractors cannot claim claim-preparation costs
8. What is the principle of mitigation in construction loss claims?
A) Contractor must stop work after a delay
B) Contractor must reduce the loss where reasonably possible
C) Employer should mitigate the delay
D) Architect must approve all changes
9. Which of the following is a typical example of a direct loss and expense claim?
A. Additional site overheads due to delay
B. Loss of company reputation
C. Liquidated damages
D. Future profit estimates on other projects
10. In PSI Incontrol v Ircon, the court accepted that:
A) A general reservation was sufficient as notice
B) Contractors could rely on implied terms only
C. No notice was required for loss claims
D. Clear written intention to claim satisfied the notice requirement
11. What kind of loss is typically not recoverable under a loss and expense claim unless explicitly stated?
A) On-site supervisory costs
B) Additional labor wages
C) Consequential loss such as future profit
D) Extension of time costs
12. What is a global claim in the context of loss and expense?
A. A lump sum claim without itemized allocation of causes
B. A claim for losses across multiple countries
C. A claim covering future global projects
D. A standard claim based on actual invoices only
13. What happens if a contractor signs a Final Account Certificate without reservation?
A) They can still pursue loss and expense claims
B) Their right to claim is preserved automatically
C) They waive their right to further claims
D) They trigger arbitration proceedings
14. In Perbadanan Menteri Besar Kelantan v Syarikat Majubina, what caused the rejection of an idling machinery claim?
A. Claim was too high
B) Delay was not proven
C. No notice was served
D. No proof of ownership and usage of the equipment
15. What is the legal position if the employer refuses to assess a properly submitted loss and expense claim?
A. The contractor may pursue legal remedies despite employer's refusal
B. The claim is automatically void
C. The contractor must re-tender
D. The employer’s refusal cancels the entitlement
