What are the two types of claims that can arise in the event of project closure and why would one be ...

There are two common types of claims that can arise in the event of project closure, ex-gratia and default. Ex-gratia claims are made by a client when there is no contractual basis for the claim. The client considers that because of some unexpected event there is a moral or commercial obligation on the project organization to pay compensation. When contractual claims are defaulted due to the failure of a project to be completed and delivered, the client firm may have some legal claim to cost recovery or punitive damages. The discrepancy between the two rides on whether a contract has been broken; if so, then the project company is in default; if not, then an ex-gratia claim must be filed.