Almost all construction projects are impacted by delay of some kind. At some point a particular section or all of the works will not progress as quickly as agreed, putting the contractual completion date of the project in jeopardy.
If delay has been the result of an event which was the employer's responsibility, the likelihood is that the contractor may be entitled to an extension of time.
What is an extension of time?
An extension of time is a contractual mechanism that permits the adjustment of an existing completion date of a construction contract where certain conditions are met. The failure to claim for an extension of time where delay has not been the fault of the contractor can have serious financial consequences.
An extension of time claim is one for time, it is not a claim for payment, nor does it entitle a contractor to any additional sums.
How to claim for an extension of time?
The process of claiming an extension of time will differ depending on what kind of contract is involved. Each standard form construction contract has its own unique extension of time provisions which should be read carefully before work commences on site so that contractors have a full awareness of how to operate the provisions.
Generally, the contractor will be required to notify the contract administrator as soon as an issue is identified that may cause delay to the project programme. Usually, a formal notification in writing is required to be submitted which outlines the nature of the delay and the expected duration of same.
Once notification has been undertaken, it is then for the contract administrator to evaluate the claim and decide to grant or reject it. If approved, the completion date will be adjusted accordingly and a separate claim for the contractor’s loss and expense as a result of the delay may follow. If not, the completion date shall remain as it was and the employer may be entitled to damages from the contractor as a result.
Things to be aware of:
- Many standard form contracts have timescales that should be met in terms of both claiming and evaluating extension of time claims. Care should be given to follow prescribed timescales rigorously to prevent any challenge to the validity of a claim.
- When making an extension of time claim, the contractor will be required to evidence that claim by providing documents which support its position. Indeed, the contract administrator is often able to compel the production of further relevant information. Accordingly, the contractor ought to keep careful records of communications and activities on site so that it can adequately support any extension of time claim.
- As with timing, many standard form contracts expressly specify the way in which an extension of time claim should be notified and responded to. Always ensure to notify the contract administrator in the correct way as prescribed by your contract and ensure that all responses received are also in the required form.
- Knock on effect. An extension of time claim that is awarded can have a knock-on effect to other notices or certificates under a standard form contract such as a non-completion certificate. Attention should be given to ensure that the granting of an extension of time claim does not impact upon other certificates or notices.
Extension of time claims can be a complex issue that require significant attention to detail. If there is any doubt about the operation of these provisions legal advice should be sought without delay.