Grounds for Extension of Time — Employer Risk Events

The extension of time clause is the central mechanism through which delay risk is allocated in construction contracts. It determines who bears the financial consequences of project delays — and, where liquidated damages are in play, whether the employer retains the right to deduct them. Understanding which events qualify for an extension of time, and which do not, is fundamental to claims analysis.

The Problem

The most common misconception about extension of time is that it is available whenever the contractor is delayed by something outside its control. It is not. The grounds for EOT are exhaustively defined by the contract. Only delay caused by events expressly listed as Relevant Events (JCT), compensation events (NEC), or qualifying grounds under the applicable FIDIC clause will support an EOT claim. All other delay — regardless of its cause, its magnitude, or its impact on the programme — is contractor’s risk.

This creates a significant problem for contractors who suffer delay from causes not listed in the contract: third-party strikes, unforeseen site conditions (where not listed as a qualifying event), supply chain failures, or acts of adjacent third parties. These delays may be entirely unforeseeable and beyond the contractor’s control, but they do not generate an entitlement to EOT if they are not on the qualifying events list.

The Legal Principle

The principle that EOT grounds are exhaustive is well established. Under JCT SBC 2016, Clause 2.26 lists the Relevant Events, and Clause 2.27 makes clear that the contractor’s entitlement to extension of time is limited to those events. Under FIDIC Red Book 2017, Clause 8.5 defines the grounds for extension of the Time for Completion, including: variation instructions, unforeseen physical conditions (Clause 4.12), employer’s risks, exceptional events, and other grounds listed under specific clauses. Under NEC4, Clause 60 defines compensation events, and no EOT is available for events not on that list.

Critically, the EOT provisions also serve a second purpose: they preserve the employer’s right to liquidated damages by ensuring that a valid completion date subsists throughout the project. If delay is caused by an employer risk event but no EOT is granted, the principle of prevention may apply — time may become ‘at large’, the liquidated damages provision may be unenforceable, and the employer is limited to general damages for delay.

Practical Application

For contractors: when a delay event occurs, the first question is always: is this event on the qualifying events list? If yes — follow the contractual notice procedure immediately. If no — consider whether the event may give rise to a breach of contract claim (for employer-caused delays not listed) or whether it can be classified within a broader listed event. Maintain contemporaneous programme records to demonstrate the impact of qualifying events on the critical path.

For employers and contract administrators: assess EOT claims against the qualifying events list and the evidence of critical path impact. Do not refuse EOT on procedural grounds (late notice) without carefully assessing whether this results in time becoming at large.

Risks

For contractors: acting on delay events without following the notice procedure may result in time-bar of the claim. For employers: refusing EOT for employer-caused delays may result in time becoming at large — the loss of the liquidated damages right and exposure to the contractor’s argument that the original completion date is no longer operative.

Mitigation

At contract stage, review the qualifying events list carefully and negotiate amendments if significant risk events are missing. During the project, maintain a delay event register and process every qualifying event through the contractual notice and EOT claim procedure in real time.

Conclusion

Extension of time is a contractual right with defined boundaries. Those boundaries are set by the qualifying events list. Understanding the list — and managing delay events against it — is the foundation of effective claims management.