Delay

Claims For Extension Of Time

Delay is a common feature of construction projects. It can result from any number of issues, such as:

  • Variations to the scope of work
  • Strikes
  • Extreme weather
  • Civil emergencies
  • Even acts of terrorism

Most construction contracts allow for the project completion time to be extended, provided the delay was not the fault of the contractor. We can help you put forward a case to prove the delay was not your fault.

It’s vital that you do so as soon as possible. You also need to make sure you comply with any ‘conditions precedent’ clauses in the construction contract. These are often strict. For example, they may specify that you must give notice of delay to a specific person, by a specific method, within a specified period of time, and that your notice includes particular information.

The difference between a successful and unsuccessful extension of time claim can be the difference between a contractor having to pay out liquidated damages for delay and being compensated for loss and expense.

For a confidential and free discussion, call us today on 01908 414990. Alternatively, email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.

Loss And Expense Claims

If you’re a contractor or subcontractor and delay or disruption has been caused to the project by your client or contractor, we can help you put together a claim to recover the additional costs you have incurred. These claims can cover things such as design changes, site conditions, and loss of productivity due to delays in the employer providing you with necessary information.

Here are some of the types of loss and expense claims we help our clients evidence:

  • Late payments, approvals or design deliverables
  • Specification errors
  • Failure to secure permits
  • Changes to the design or scope
  • Unexpected site conditions such as hidden obstacles
  • Critical information not provided in a timely manner
  • Adverse weather conditions that hinder progress
  • Incomplete prior installation that leads to rework or follow-on activities

Liquidated And Ascertained Damages (LADs)

If one party is in breach of contract, the other party can claim damages. How much, and how easy it is to claim, depends on whether or not the breach of contract is covered by a liquidated damages clause.

What Is The Difference Between Liquidated And Unliquidated Damages?

In a nutshell, it comes down to whether the parties have agreed in advance what the consequences of a breach of contract will be.

Liquidated Damages

Liquidated damages are the amount the parties have agreed will be payable as damages. This is set out in a liquidated damages clause in the construction contract. It only applies, however, if a specified breach of contract occurs – for example, delayed completion.

Why do parties use liquidated damages clauses? They give certainty to both parties from the outset about the consequences of breach. It avoids arguments about what the loss actually is and whether it can be claimed.

A party claiming liquidated damages does not have to prove it sustained any actual loss. They don’t need to provide any evidence of their costs. That’s because the whole point of a liquidated damages clause is that the parties choose to agree what the consequences of a particular breach will be.

Unliquidated Damages

Where there is no liquidated damages clause, the “innocent” party will have to claim unliquidated damages.

There are two major differences:

  • The innocent party has to prove it actually suffered a loss and this was caused by the other party’s breach of contract.
  • The amount of damages is not fixed in advance.

Unliquidated damages can cover many different types of losses (from loss of profits to loss of rent and additional staff costs), but there can be arguments about whether the losses claimed are too remote to be recoverable.

In quantifying unliquidated damages, the question a court asks is “how much money is needed to put the innocent party back in the same position they would have been had the breach of contract not occurred?”

How Does An Extension Of Time Affect Liquidated Damages?

An extension of time can be a defence to a claim for liquidated damages / damages for delay. Where the time to complete the work (or part of it) has been extended, there will be no breach of contract provided the work is then completed within the extended period.

It’s vitally important, therefore, that you follow to the letter what your contract says about extension of time. Make sure you send any delay notices (if required) as soon as possible after the event that has caused the delay.

Altion Law are specialists in advising and representing parties on commercial construction contracts, claims and disputes.

For a confidential and free discussion, call us today on 01908 414990. Alternatively, email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.