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The Details of Project Delays

October 1, 2016

 

 

Construction delays and their consequences depend on several variables

by Stephen M. Phillips

 

Although roofing contractors are not as frequently involved in lawsuits arising from construction delays as mechanical, electrical, plumbing and general contractors, you should be familiar with the basic construction law principles applicable to delays.

At some point, you will have a job where an owner or general contractor withholds payment from you based on a claim that you are liable for either liquidated or actual delay damages because you did not complete your work per the contract or construction schedule. Alternatively, you may suffer delays that make your performance more costly and require more time for you to complete your work.

Construction contracts typically include a "time is of the essence" clause. This seemingly innocuous clause can have substantial financial implications. When a contract includes a time is of the essence clause, failure to satisfy a contract requirement pertaining to time is considered a material breach of the contract. Conversely, most courts will not consider timing as critical if the contract does not contain a sentence stating time is of the essence.

If your project manager is not vigilant and fails to take steps when delays occur, you could find yourself facing liability for delays that may not have been your fault, being denied a time extension or not being able to recover extra expenses.

Excusable delays

Construction projects suffer delays for a variety of reasons. From a legal perspective, construction delays generally are classified as either excusable or nonexcusable and compensable or noncompensable.

Excusable delays entitle a contractor to a time extension and possible additional compensation. For a delay to be classified as excusable, the delay must not be the contractor's fault or a result of a condition for which the contractor agreed in the construction contract to accept responsibility.

Excusable delays are caused by another party's actions or omissions or arise from unforeseen events beyond the contractor's control or fault. Delays resulting from architectural design errors and owner-initiated changes are common excusable delays. Unusually severe weather also is grounds for an excusable delay. However, snow, rain or other unfavorable weather conditions adversely affecting execution of the work do not entitle a contractor to additional time unless the incidence of unfavorable weather exceeded historical norms based on reliable weather records for the area.

Nonexcusable delays are caused by the contractor or arise from risks and responsibilities the contactor accepted when signing the construction contract. Failure to manage a job properly, staff a job adequately or have the right equipment at the job when needed are examples of nonexcusable delays. Late material deliveries that could have been avoided or should have been anticipated is another example. However, if a material delivery was delayed because of an unforeseen event, such as an explosion at the plant where the material is produced, the delay may be considered excusable.

The construction contract will be examined when determining whether a delay is excusable. The American Institute of Architects' (AIA's) General Conditions, AIA Document A201-2007, states contract time shall be extended by change order for a reasonable time if a contractor is delayed by the following:

  • An act or neglect of the owner or architect, owner's or architect's employees, or another contractor employed by the owner

  • Change orders

  • Labor disputes

  • Fire

  • An unusual delay in deliveries or unavoidable casualties or other causes beyond the contractor's control

  • Other causes the architect determines may justify delay

 

In contrast to AIA's listing of excusable delays, subcontracts drafted by general contractors typically take a much more restrictive approach, stating, for instance, a labor dispute is not grounds for an excusable delay.

 

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