You may delay, but time will not, and lost time is never found again."Benjamin Franklin
Construction Delay Terminology
Construction delay is defined as the time overrun either beyond the completion date specified in a contract or beyond the date that the parties agreed upon to deliver a project. So, choosing an appropriate delay analysis method is an essential part of the construction industry.
Critical vs. Non-Critical Delays
This is the first and most important question to answer: Was the delay critical or non-critical?
A critical delay will affect the project's completion date (or some other significant milestone date). Necessary delays can't be made up – they tack on extra time. Non-critical delays will affect the completion of specific activities, but not the completion date or the date of some important milestone.
The determining factor is whether the delay extends the Critical Path Method (CPM) of the project. A CPM schedule will set out a timeline of the most extended activities throughout the project. In addition, it will establish the minimum amount of time it will take to complete these "critical" activities.
These critical activities need to be performed at specific times and in a particular order to allow the next vital phase to begin. If the delay does not affect the project's critical path, then the wait is non-critical and may involve a simple change order to correct the delay.
Excusable vs. Inexcusable Delays
Once you have determined if the delay is critical or not, you will need to establish whether the delay is an excusable one. An excusable delay allows the contractor an extension of time, compensation, or both. Why? Because these delays are out of the contractor's control.
The common excusable delays should be outlined in your Contract. The most natural example of excusable delays is when a delay falls under a force majeure clause – natural disasters or terrorist attacks. However, excusable delays can also result from errors or omissions in the plans or even simple issues the client caused.
Inexcusable delays are those where the contractor was entirely responsible for extending the project's duration. If this is the case, the contractor will be liable for any costs or damages caused by the delay. This can result from delayed mobilization, late submissions, failure to obtain permitting (if they are responsible for it), or general poor planning on behalf of the contractor.
Compensable vs. Non-Compensable Delays
Lastly, is the delay a compensable one? When a delay is "compensable," that means the party affected by the delay should be given either an extension of time or compensation for the delay of their work.
All excusable delays are compensable. Meaning, any time a hold is considered "excusable," the contractor will generally have a claim for a time extension, compensation, or both! If the contractor is solely at fault, the delay will highly likely be non-compensable. non-compensable delays can fall under any of the other categories, depending on the situation and contract terms.
What is the concurrent delay?
Assessing concurrent delay about extensions of time and delay damages is often a problematic and complicated issue. It is necessary to identify the causes of the delay depending on the terms of the Contract. It may also be required to apportion liability when there has been a contributor to the delay by both the employer and the contractor.
At the same time, neutral events, such as force majeure and critical parallel paths, together with contractor acceleration and mitigation measures, may need to be considered. The preferred approach for assessing extensions of time and delay damages where there is concurrent delay is uncertain. This is partly attributable to the uncertainty and confusion of how concurrent delay is defined and categorized in construction contracts.
The standard form contracts differ in their apportionment of risk and in defining what concurrent delay is.
Liquidated damages, also referred to as "liquidated and ascertained damages" (LADs), are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance).
Liquidated damages are most applicable where the damages are intangible, such as a failure by the contractor on a public project to fulfil minority business subcontracting quotas.
An average of the likely costs which somebody may incur in dealing with a breach is used.
Authority for the proposition that averaging is the appropriate approach may be taken from the case of English Hop Growers v Dering.
When damages are not predetermined/assessed in advance, then the amount recoverable is said to be "at large" (to be agreed or determined by a court or tribunal in the event of a breach).
The purpose of a liquidated damages clause is to increase certainty and avoid the legal costs of determining actual damages later it should breach the Contract. Thus, they are most appropriate when (a) the parties can agree in advance on reasonable compensation for the breach, but (b) the court would have difficulty determining fair compensation at the time of the breach. However, liquidated damages may not be set so high under the common law that they are penalty clauses rather than fair compensation.
The construction litigation process will be conducted through the Technology and Construction Court (TCC), a specialist Court dealing with technology, construction, and other technically complex disputes.
How do construction contracts cause litigation?
What do most causes of construction litigation involve?
They are breaking contractual obligations.
Contracts outline the promises between the two parties during a project.
Should the result not be stated in the agreement (or something on the project goes awry), the affected party may make a legal claim for breach of Contract.
What does it mean to start litigation?
Litigation is an act of bringing a lawsuit in and itself, a judicial contest; any dispute. For example, when a person begins a civil case, the person enters a process called litigation.
What is the definition of a litigation lawyer?
Litigation attorneys are critical if you are looking to file a legal claim or defend against one. Unlike transactional lawyers, a litigation attorney is the one in courtrooms prosecuting or defending claims for clients. In addition, these professionals specialize in investigating and prosecuting cases.
When thrust into litigation, you obviously must make sure you are ready to deal with that.
Abandonment of Work
Abandonment of work is worse; the projects were abandoned for some reason when the contract period ended. An abandoned building is construction work that is continuously stalled for six months or more, during the project completion period or beyond the scheduled completion date.
Abatement of Action
Essentially abatement is a defence to a claim for payment by a contractor or sub-contractor. An employer's right to defend a claim for total compensation on the basis that defects have reduced the value of the construction project will override the failure to provide, or adequately provide, a Section 111 notice.
Arbitration is a private process where disputing parties agree that one or several individuals can decide the dispute after receiving evidence and hearing arguments.
When arbitration is binding, the decision is final, can be enforced by a court, and can only be appealed on very narrow grounds.
Addendums are documents issued before the Contract's execution, which modifies or interprets the bidding documents, including Drawings and Specifications, by additions, deletions, clarifications, or corrections.
(1) A legally enforceable promise or promises between two or among several persons. (2) On a construction project, the document states the essential terms of the Construction Contract, which incorporates the other Contract Documents. (3) The document setting forth the terms of the Contract between the Architect and a consultant.