The importance of time in building and construction contracts

In all areas of construction, time is one of the biggest areas of disputes. Knowing how much time you have to complete your project, how to ask for extensions, and how to manage your time related risks are vital.  Andrew Cullyer, Litigation Executive, reviews the general position on time in construction contracts, discussing the very real dangers of getting the basics wrong in a project and explains how situations of this nature can be avoided. 

How is time measured in construction projects?

Construction projects always have a very definite start date but the end date for the works can be a subject of much debate and dissension. Time in building and construction contracts can be measured in a number of ways:

• A period of days/weeks or months after the start date
• With reference to a specified end date
• In sections corresponding to sections of the work
• Not at all.

All of these various methods essentially boil down to two principles whether time is “at large” or if time is “of the essence”.

When time is “at large” in a construction project

This covers the situations where no clear period of time is stated in the construction contract for completion. The onus in such scenarios is for the contractor to complete within a reasonable time.

What a reasonable time is, is a question of fact and degree. It will depend on the works being undertaken and the conditions in which they are undertaken. For the employer in the project, this will likely always mean slightly longer than they would wish.

We would always advise that you include a strict time limit for when your building works are to be complete in order to avoid any ambiguity.

When time is “of the essence” in a construction project

This describes any construction or building contract where there is a fixed period for completion.  It is usually the case that completion by the specified date is a fundamental term of the contract giving both the right to damages for delay beyond that date and a right to terminate.

What am I entitled to if my construction project is delayed?

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

Delay may entitle you to different things; usually, it will entitle you to damages. Unless the contract provides for a specific rate of damages (known as liquidated damages) this will be damages equal to the losses you can prove have been caused by the delay.

These general damages for delay can be difficult to ascertain, calculate and prove. It is usually wise therefore to include a liquidated damages provision in the contract.

Where “time is of the essence” any delay may entitle you to terminate provided that the delay has been caused by the other party.

Where “time is at large” a delay may allow you to terminate if the delay is of a length and character as to suggest that the other party have no intention of completing the contract. This will depend on the facts and circumstances of the delay and how it has been caused.

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.