Time Related Claims
Construction Delay Claims
Constructions contractors usually have a time within which or a date by which the contractor must complete the work or bring it to the stage of practical completion.
There is usually a definition of completion or practical completion. completion is usually defined to be substantial completion of work.
Before a contractor makes a contract, the contractor must consider the risks involved in contracting. One major risk is liability to the owner for delay.
What if the contractor is delayed by events beyond the control of the contractor? Generally speaking, if a contractor agrees to complete work or hand it over by certain date, the contractor must honor the promise if, for reasons beyond the control of contractor, it becomes impossible to meet the deadline.
One exception is where the contract is terminated before the date for completion or hand over. Another is where the owner causes the contractor to breach the contractor’s promise. One party to a contract cannot hold the other liable for a breach which the first party causes the other to make. This is the legal maxim, “ no person can take advantage of his or her own wrong” . if an owner causes the contractor to breach the time provisions of the contract, the owner has no remedy for the breach.
For example, if the contractor promised to complete a building by 01, July 2019, and due to a delay by the owner in providing materials , the contractor was unable to meet the deadline, the owner would have no claim for damages on account of the contractor’s failure to complete by 01, July 2019.
Contracts usually that if the contractor is delayed in achieving practical completion by certain prescribed events, the contractor may notify the owner or the Engineer ( as per FIDIC ) and make a claim for extension of time. Under the term of the contract the Engineer is empowered by both parties to decide whether the contractor was delayed by one of the prescribed events and if so, the extent of the delay.
Damages for Delays
For owner-caused (or other contractor-caused) delays, a contractor may have a claim for:
Project management & supervisory expenses
- Loss of use
- Loss of rents
- Lost profits
- Insurance costs
- Construction loan interest
For contractor-caused delays, an owner may have a claim for:
- Supervision costs
- Extended general conditions
- Jobsite trailer rental
- Temporary facilities/utilities
- Liability insurance
- Equipment rental & maintenance costs
- Field labor
- Increased materials cost
- Lost productivity
- Hourly labor rate increases