Jonah Patel
Delays in contract performance are extremely common, and they can cost people money, time, and reputation. Delays can be classified as excusable or non-excusable, and compensable or non-compensable. Excusable delays are those that are beyond the control of the contractor and are not attributable to their negligence or wrongdoing. These delays are typically outlined in the construction contract and may include force majeure events such as natural disasters, terrorist attacks, or government orders. On the other hand, non-excusable delays are within the contractor's control and are often caused by their own mistakes or negligence, such as failing to apply for permits on time. Whether a delay is excusable or not is often a source of conflict between contractors and property owners, and courts may need to intervene.
| Characteristics | Values |
|---|---|
| Type of delay | Critical or non-critical |
| Reason | Unforeseeable events, beyond the control of the contractor, not caused or compounded by negligence |
| Examples | Natural disasters, terrorist attacks, errors or omissions in plans, client-caused issues, strikes, inclement weather |
| Contractor responsibility | No default, entitled to an extension of time, and/or compensation |
| Owner responsibility | Not liable for damages, responsible for delay costs if they caused the delay |
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What You'll Learn
Unforeseeable events
Foreseeability is assessed based on the contractor's knowledge and the scope of their business operations. It is unreasonable to expect a contractor to possess "prophetic" insight or take extraordinary preventive measures. Unforeseeable causes typically refer to future events, rather than existing conditions.
Events beyond the contractor's control include natural disasters, terrorist attacks, or other force majeure occurrences. These events are generally covered by a force majeure clause in the contract, which outlines specific triggering events such as floods, fires, earthquakes, or explosions.
Other unforeseeable events that may constitute excusable delays include errors or omissions in construction plans, client-caused issues, strikes (unless caused by the contractor's breach of a labour contract), and unusually severe weather conditions.
It is important to note that the determination of whether a delay is excusable depends on the specific contract terms and the extent to which the delay affects the project's timeline and overall completion.
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Events beyond the contractor's control
Events beyond a contractor's control are typically considered excusable delays. These events are unforeseeable and could not have been prevented by the contractor or their subcontractors.
Excusable delays are generally outlined in the construction contract, and common examples include force majeure events, such as natural disasters, terrorist attacks, fires, earthquakes, explosions, wars, invasions, civil unrest, and government orders. Other examples include errors or omissions in the plans, client-caused issues, and owner interference. Owner interference can take the form of administrative mismanagement, excessive owner changes, or denial of site access.
To determine whether a delay is excusable, it is essential to consider if the contractor could have foreseen the event and if they could have prevented it or mitigated its impact. If a delay is deemed excusable, the contractor is typically entitled to an extension of time and, in some cases, compensation for their time-related costs. However, they are usually responsible for bearing the costs associated with the delay.
It is important to note that a delay can still be excusable even if it is not explicitly listed in the contract. In such cases, the courts may need to intervene to resolve conflicts between contractors and property owners.
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Contractor not at fault
Delays in contract performance are a common occurrence in the construction industry, and they can have significant financial implications for all involved parties. When a delay occurs, it is important to determine whether it is an excusable or inexcusable delay, as this will impact the allocation of responsibility and potential financial liability.
An excusable delay is one that is beyond the control of the contractor and cannot be attributed to their negligence or wrongdoing. In other words, it occurs when a contractor is delayed in performing their work through no fault of their own. These delays are typically outlined in the construction contract and can include events such as natural disasters, terrorist attacks, or other force majeure events. For example, a delay caused by unusually severe weather conditions or a government order would likely be considered an excusable delay.
Additionally, certain unforeseeable events can also lead to excusable delays. These are events that could not have been reasonably foreseen at the time of contracting and are beyond the control of the contractor. For instance, if a contractor fails to obtain specific equipment or materials due to unforeseen circumstances beyond their control, this could be considered an excusable delay.
It is important to note that the determination of whether a delay is excusable or not can be complex and may require legal interpretation. Courts often have to intervene when there is a dispute between contractors and property owners regarding the nature of the delay.
In the case of an excusable delay, the contractor is typically entitled to additional time to complete the project without being held in default. They may also be entitled to compensation for any losses incurred due to the delay, depending on the specific circumstances and contract terms. However, if the delay is found to be non-critical and does not affect the overall completion date, the contractor may only receive an extension of time without additional compensation.
Furthermore, a contractor's ability to recover time-related costs depends on whether the excusable delay is compensable or non-compensable. If the delay is compensable, the contractor may be entitled to both a time extension and compensation for any additional costs incurred. On the other hand, if the delay is non-compensable, the contractor will bear their own time-related costs while still being granted a time extension.
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Force majeure events
A force majeure clause in a contract may excuse a party's performance or suspend it, depending on the specific language of the clause and the contract terms. Force majeure clauses often specifically list the events that will discharge performance, such as natural disasters or terrorist attacks. For example, floods, fires, earthquakes, explosions, wars, invasions, riots, government orders, and pandemics are all events that may be included in a force majeure clause.
In the context of construction contracts, force majeure events can include unusually severe weather conditions. If a delay is deemed excusable due to a force majeure event, the contractor is typically entitled to additional time, compensation, or both.
It is important to note that the impact of the party's own actions in contributing to their inability to perform may also be considered. For instance, if a party imposes a travel ban that results in non-performance, it may limit their ability to rely on the force majeure clause.
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Errors or omissions in plans
In the context of errors or omissions in plans, excusable delays can occur when there are discrepancies or inaccuracies in the project's blueprints, specifications, or other documentation. These errors may include incorrect dimensions, missing details, conflicting information, or unclear instructions. Such mistakes can lead to challenges in interpreting the plans accurately, resulting in potential delays during the construction process.
It is important to distinguish between excusable and inexcusable delays. Inexcusable delays are generally caused by the contractor's negligence or failure to fulfil their obligations as outlined in the contract. For instance, if a contractor assumes responsibility for obtaining specific equipment but fails to do so without a valid reason, the delay is likely to be deemed inexcusable.
To determine whether a delay is excusable or inexcusable, several factors are considered. Firstly, the foreseeability of the event is assessed. If the contractor could have foreseen the event and taken preventive measures, the delay may be deemed inexcusable. Additionally, the level of control exerted by the contractor is evaluated. If the event causing the delay could have been prevented or mitigated by the contractor, it is less likely to be considered an excusable delay.
In the case of errors or omissions in plans, it is crucial to investigate whether the contractor had any responsibility for creating or reviewing the plans. If the contractor contributed to the errors, their claim for an excusable delay may be weakened. However, if the errors were solely the result of another party's actions or omissions, the contractor's claim for an excusable delay is strengthened.
To summarise, errors or omissions in plans can lead to excusable delays, particularly when they are beyond the contractor's control and cause unforeseen delays. In such cases, contractors are typically entitled to additional time, and sometimes compensation, to complete the project.
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Frequently asked questions
An excusable delay is any delay caused by unforeseeable events out of the contractor's control. These delays are generally outlined in the construction contract.
Examples of situations that would constitute an excusable delay include natural disasters, terrorist attacks, errors or omissions in plans, and issues caused by the client. Force majeure events, such as acts of God, floods, fires, earthquakes, wars, invasions, riots, government orders, and embargoes, are also considered excusable delays.
When a delay is deemed excusable, the contractor is typically afforded additional time, compensation, or both. The contractor cannot be held in default and has the right to collect payment for the work performed.
To determine if a delay is excusable, it is essential to consider whether the contractor could have foreseen the event and if it was within their control. If the delay resulted from a foreseeable situation that the contractor caused or could have prevented, it is likely to be considered inexcusable.
