Many Contracts do not have a provision for a party to claim for time due to a delay enforced by coronavirus restrictions. To make matters worse, they often stipulate that you are to take all measures to mitigate delays and make up any time lost.
This can add a huge amount of pressure to an already difficult situation.
An enforced delay will make a tight program even tighter when you factor in the time taken to remove tools, make the site safe, and then re-mobilise. Not to mention the loss of momentum.
Fortunately, there may be ways that you can write a Notice for your Builder to grant you an Extension of Time (EoT).
This will alleviate the pressure of having to increase resources to catch up with the delay (at your own cost), in addition to protecting you from being charged with Liquidated Damages due to the delay.
Here are three examples of how you may be able to use your Contract clauses to apply for an EoT and significantly reduce your risk*:
1. Check the Qualifying Cause of Delays / Claimable Events:
The conditions of your contract (often referred to as General Conditions of Contract or Standard Conditions of Contract) will have a section for Delays, Time, or Extension of Time. Check this section first to see what the procedure is for claiming for a delay and how long you have to submit notice to the Builder.
There will be a section that mentions what events you are allowed to claim a delay for. These may be called Qualifying Causes of Delay or Claimable Events. The list is likely to include latent defects, variations, instructions, and inclement weather.
If the list includes industry shutdown or act of state or federal government then you should apply for an EoT using the relevant clause listing industry shutdown or act of state government as a reason for delay. If these events are not mentioned you should check out the below points…
2. Suspension of Works:
Your Contract may have a Suspension of Works clause that enables the Builder to instruct you to suspend works and grant you an EoT.
If you are unable to claim delays due to coronavirus or an act of the state or federal government then you can request that the Builder issues a Direction to Suspend the Subcontract Works. If the Builder suspends the Subcontract Works this can give you a valid claim for an EoT.
3. Subcontractor’s Program:
If your Contract does not have a Suspension of Works clause it may contain a clause regarding the Subcontractor’s Program. This clause will often provide the Builder with the power to instruct a Subcontractor to amend their Program to suit changes in the Construction Program.
If this is the case, you can request that the Builder provide you with a formal direction to amend the Subcontractor’s Program in addition to granting you an EoT. When you amend the Program to reflect the government-enforced shutdown you can apply for you the EoT.
While most Builder’s will be sympathetic to the impact of the delay and have a system for dealing with and accepting delay claims, there will be some who do not respond favourably.
If the Builder’s PM rejects the EoT claim or does not respond, your formal request has at least been issued and can be referred to later. And of course, in the unlikely event of a dispute, these Notices and formal requests can be produced to illustrate the delay experienced and show that you notified the Builder of the delay in accordance with your Contract.
Before issuing your Notice you should contact the Builder and discuss the delay, the impact, and how best to manage re-commencing works. An open conversation will help them to understand the impact and will show that you are willing to work together to overcome the problem, hopefully avoiding any unnecessary additional pressure for both parties.
*Note: All Contracts are different, these examples are for information only and to provide guidance on reviewing your own Contract. When issuing Notices make sure they are served to the correct individual and in accordance with your Contract.
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