The next wave of construction claims is here.

War in the Middle East.

Fuel and bitumen prices skyrocketing.

Shipping and insurance surging.

For projects priced under very different market conditions, these changes can quickly erode margins. Contractors, developers and governments alike are now facing a familiar but difficult question: who bears the cost of these sudden shocks?

In many cases, contracts contain mechanisms intended to deal with events exactly like this. Price adjustment provisions, change-in-law clauses, force majeure provisions, exceptional risk events, or hardship principles under applicable law may all become relevant.

But entitlement is rarely automatic. It depends on the specific wording of the contract, the governing law, and whether the required notices have been issued and mitigation measures properly implemented. It depends on whether performance became impossible due to circumstances beyond a party’s control.

In periods like these, the most important step is often the earliest one: understanding whether the contract provides a path to recover these costs, and how that path should be documented and pursued.

If you are dealing with sudden increases in fuel, bitumen, shipping, or insurance costs on an ongoing project, we can share our thoughts about your options for recovering your increased costs.

Thank you for reading the CMA Newsletter.