When and how to claim additional time on construction contracts
Many construction projects suffer from delay. Contractors often have their hands full with trying to re-programme and mitigate delays, without also thinking about what steps they should be taking to record and document the issues and submit notices that the contract requires in order to to protect their position and protect them from LAD’s.
How we can help
CCC has assisted many parties in making and dealing with delay and extension of time claims. This includes clear and prompt advice at all stages of a project, drafting related correspondence, and preparing extension of time claims. Whilst a properly prepared and presented extension of time claim will often result in settlement, CCC also provides representation in formal dispute resolution procedures such as adjudication where the parties are unable to reach a negotiated settlement.
What is an extension of time and why are they important?
Delay frequently occurs on construction projects and is a common source of disputes, with arguments about who is responsible for the delay and who should bear its financial consequences. Extension of time claims allow contractors to avoid liability for such claims and can form a part of claims for their losses for their own delays.
An extension of time is an extension to the period in which an obligation is to be undertaken. In a construction contract, an extension of time is usually an extension to the date for completion of the whole of the works, or of specific sections or key parts of them.
This is important as entitlement to an extension of time prevents claims for breach of contract for delay (at least up to the date of the extension). Claims for breach of contract for failing to complete on time take one of two forms:
- Liquidated damages (LAD’s), which are claims for a specified sum of money for a particular breach. This will usually take the form of a rate that applies for each day or week of late completion. The party claiming liquidated damages does not have to prove that they have suffered any loss. All they must do is show that completion is late, and they are entitled to the liquidated damages in the contract.
- Unliquidated damages, which are claims for the actual costs of a particular breach. Evidence therefore needs to be provided of the actual costs and expenses incurred and that they were caused by the delay.
An extension of time will often mean that a contractor avoids tens, thousands or even hundreds of thousands of pounds of delay damages, but also often forms the basis of a claim for the contractor’s additional costs caused by a delay.
What events or circumstances give an entitlement to extension of time?
An extension of time clause will set out the grounds for claiming extension of time. JCT contracts call these grounds Relevant Events, and they frequently include:
- Variations
- Instructions
- Deferment of giving possession of the site or any section
- Suspension
- Exceptionally adverse weather
- Any impediment prevention or default by the Employer (or by the Employer or Contractor under the sub-contracts)
The last of those grounds, any impediment, prevention, or default, is a ‘sweep-up’ provision which covers other defaults or breaches of the contract which are not separately listed. For example, late provision of information might constitute an impediment, prevention, or default, depending on the circumstances.
How do I apply for an extension of time?
It is extremely important that notices are given strictly in compliance with your contract as the proper giving of notices is often a condition precedent to entitlement to extension of time. In other words, if the proper notice is not given at the right time, then you might lose all of your entitlements, even if you would otherwise be entitled to an extension of time.
CCC can help you draft these notices and comply with the relevant requirements, just as we have helped many others.
How you apply for an extension of time will depend on the specific provisions of your contract. When giving any notice, check:
- Is it being given to the correct person?
- Is it being sent by the correct method? Remember that sometimes contracts require notices to be given via a document portal or even in writing by special or recorded delivery.
- Is it being given at the correct time? Often contracts will be amended to require notices of delay and claims for extension of time to be given within a certain number of days of an event occurring.
- Does the notice include everything that the contract requires it to include? For example, under an unamended JCT contract a notice of delay and claim for extension of time will normally need to include the cause or causes of the delay and identify the contractual grounds for entitlement to extension of time (i.e., which of the Relevant Events apply). The JCT contracts generally require the initial notice to be followed up with particulars of the expected effects of the delay, including an estimate of the delay. They also require any material change in the delay or particulars to be notified if or when they arise.
What can I do if I have not applied for extension of time in accordance with the contract?
This will depend on the terms of your contract and what has in fact happened. There are often ways that your position can be improved, even if it is not as strong as it would be had action been taken sooner.
Free initial enquiry
All initial enquiries from new clients are free of charge, so please do not hesitate to contact us by phone, email or using our contact form for a free initial consultation to discuss how we can help you in relation to extension of time.
