Delay, damages and extensions of time in Building and Construction Contracts

Delays are a regular occurrence in construction projects and so protecting you and the project with the appropriate clauses in your contract can assist in the long term against disputes arising.  It is vital that you understand what would constitute a delay, what may cause a delay and where the burden of proof lies in order to reduce the risk of future disputes.  Andrew Cullyer, Litigation Executive specialising in construction disputes, reviews these questions here, before explaining how you can avoid delays in your project and how extensions of time clauses can support you.

What qualifies as a delay in construction projects?

A delay in a construction project is any event that has caused or is likely to cause the works to be completed after the period for completion. This is true whether that period for completion is a fixed one or within a reasonable time.

Delay is usually easy to identify, because the works are either finished by a certain date or within a certain period or they are not. Who caused the delay, and therefore who is legally responsible, is a much more difficult question.

What factors can cause a delay in a construction project?

Even relatively simple building and construction projects have a large number of moving parts.  In summary, and by way of some examples:

• There are a number of factors that are usually within the contractor’s control, such as labour and materials.
• There are a number of factors that are usually within the employer’s or client’s control such as the flow of information, what tiles are required, or what paint, access, etc.
• There are a number of factors beyond control the control of either party to the contract that might cause delay, such as unusually adverse weather conditions or strikes.

An additional layer of complexity arises when it is understood that delays under all three of the bullet points above can arise during the project and even simultaneously or on or about the same time.

This is significant because the law requires that it can be proven that the defaulting party caused a specific loss.  Multiple causes therefore makes determining liability complex and expensive.

The best advice to offer is to always seek to minimise delays for which you may be held responsible. If you are a contractor make sure there are sufficient labour and materials on-site to complete the work on time. If you are an employer make sure your contractor has all the information, and access, they need to carry out and complete the works.

Extensions of time in construction contracts

Extensions of time are only really relevant where two conditions are satisfied:

1. The contract is for a fixed period; and
2. There are liquidated damages for delay.

Where these two conditions are satisfied it is impermissible in law for the employer to benefit from their own delay.  To summarise, the employer cannot delay the work for 4 weeks and then claim liquidated damages for that 4 weeks of delay.  If an employer were to do so, or rather if there were no means in the contract for the employer to accommodate this delay, then the employer would lose his right to claim liquidated damages completely and time would become “at large”.

What, therefore, is required is a mechanism whereby the employer can extend the time for completion to remove any delay for which they are responsible. Any other delay would then be recoverable by means of liquidated damages and time would remain “of the essence”.

This is usually done by means of an extension of time and standard contracts have a significant and substantial mechanism for this. It is important that any extension of time granted covers the period of delay that is directly attributable to the employer only.

To have your questions answered on your construction project or if you wish to bring a claim against a party involved in your construction project, you can contact Andrew Cullyer today on 023 8071 7482 or email andrewcullyer@warnergoodman.co.uk.

For general Litigation or Dispute Resolution enquiries, contact Amelia Ford on 023 8071 7429 or email ameliaford@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.