Whether you like it or not, delays to construction projects are a fact of life.
What is worse is that there is no automatic entitlement to extra time, even if the delay was nothing to do with you, so if you do nothing then you are still required to complete the works by the original date for completion.
You will then be the one in breach of contract for not completing – even if you were delayed through no fault of your own! This could unfairly leave you open to liquidated damages (LAD’s) or other delay damages. Delay notices are essential to protect yourself.
Extension of time
The standard form contracts have mechanisms for extending the date for completion (an extension of time) to account for delays and give a defence to claims for delay damages, although you must follow the processes of the contract very carefully.
Notices of Delay
The JCT forms of contract permit notices of delay to act as a trigger for the other party to consider whether or not to extend the date for completion. There are a few steps to make sure you get this right:
- Check the contract
- Give the delay notice promptly
- The delay notice must explain the cause of the delay and the Relevant Event
- Explain how long you estimate the delay to be and provide updates
- Comply with any formalities for issuing notices and manage them commercially
1. Check the contract
The steps below are from the 2016 JCT Standard Building Sub-Contract with Design.
Although these are broadly applicable to many of the other JCT contracts, it is very important to check what your contract actually says as the JCT terms relating to delay are very commonly amended to make it more difficult to claim an extension of time. Common amendments might be:
- To set strict time limits for when delay notices must be given.
- To reduce the list of circumstances for which you can claim an extension of time.
- To include a condition precedent so that you are not entitled to an extension of time at all if you do not comply with the notice requirements exactly.
It is therefore important that you follow the requirements of your own particular contract very closely. Missing a critical time period in which to issue a delay notice could mean you are not entitled to extra time, which might be a very costly mistake.
2. Give the delay notice promptly
The 2016 JCT Standard Building Sub-Contract with Design says that a delay notice needs to be given “forthwith” “whenever it becomes reasonably apparent that the commencement, progress or completion of the Sub-Contract Works or such works in a Section is being or is likely to be delayed”.
This means that the notice should be given as soon as you think that there will be a delay, not just once the delay has already happened. This is often amended to set a strict time period by which the notice must be given.
3. The delay notice must explain the cause of the delay and the Relevant Event
The 2016 JCT Standard Building Sub-Contract with Design requires the notice to include “the material circumstances, including, insofar as the Sub-Contractor is able, the cause or causes of the delay, and shall identify in the notice any event which in his opinion is a Relevant Subcontract Event.”
This means that you need to include the reasons for the delay and, importantly, which Relevant Event the delay is linked to. The JCT Relevant Events are listed in the contract, but the most common ones are:
- Delays caused by instructions for variations.
- Delays caused by the lawful suspension of work.
- Exceptionally adverse weather conditions.
- Impediment, prevention or default by the other party. This is a ‘sweep up’ provision that covers other breaches not specifically listed, such as the late issue of information. It just means the other party has breached the contract which has caused you a delay. It is often the most common ground.
You should explain in your notice which of the Relevant Events applies to each delay, and refer to the contract clause where that Relevant Event is listed. If more than one Relevant Event applies, you should refer to each that is applicable.
It is common for JCT contracts to be amended to change or delete Relevant Events.
4. Explain how long you estimate the delay to be and provide updates
The 2016 JCT Standard Building Sub-Contract with Design says that for each delaying event the delay notice must state the “particulars of its expected effects, including an estimate of any expected delay”.
This estimate should be included in the delay notice if possible, but it may well be the case that at the time of issuing the delay notice you do not know how long the delay will last. If that is the case, then the JCT requires you to set this out in writing as soon as possible afterwards.
If there are further changes to your estimate, then you are required to update the other party.
The 2016 JCT Standard Building Sub-Contract with Design requires the sub-contractor to “constantly use his best endeavours to prevent delay in the progress” and “do all that may reasonably be required to the satisfaction of the Contractor to proceed”. It is often worth recording in the delay notice how this is being complied with.
Consider whether you should also give notice of loss and expense at the same time as giving notice of delay (which is another topic in its own right).
5. Comply with any formalities for issuing notices and manage them commercially
It is best to issue a formal notice of delay which is clear and unambiguous, rather than, for example, including the notice in an email or report that has a lot of unrelated information. This is to make it clear that your notice is intended to have an effect under the contract.
It is good practice to issue a delay notice as a formal letter. It should have a title that identifies it as being a delay notice given under the contract. Assigning sequential numbering to notices can be helpful when later referring to them.
Check your contract to see if there are any specific requirements as to how notices are supposed to be issued and follow those requirements closely, as failure to follow them can mean that your notices are invalid.
Delay notices can be seen as aggressive and confrontational as well as a sign of overly ‘contractual’ behaviour. If the other party complains about them, remember that the reason you are submitting delay notices is because the contract requires you to! Whilst the formalities must therefore be complied with, it is best practice to make the other party aware that you will be sending delay notices before you do so, to ensure that you maintain a good relationship so far as you can.
How CCC can assist
We have extensive experience in assisting with the issues covered in this article, including:
- Drafting notices of delay that comply with the contract requirements.
- Formalising complicated delay claims so that they can be pursued in formal proceedings.
- Defending or pursuing delay claims in adjudication.
- Pursuing claims for losses resulting from delays and disruption.
