Delays are a common and frustrating part of any construction project and are a frequent source of disputes. For that reason, most construction contracts include clauses for time extensions. As a contractor, it is important to know when you can request an extension of time and follow the correct process. You also need to ensure any request does not create confusion or problems later in the project. This article will set out your rights as a contractor to request an extension of time and set out the correct way to make any request.
What is an Extension of Time?
Either party, whether the contractor or owner, can request an extension of time on a construction project. Generally, when an extension of time is agreed on and granted, neither party can later claim liquidated damages.
This reflects a key principle in construction contracts that a party cannot benefit from a contract by relying on their own breach of the contract. In other words, as a contractor, you cannot request an extension of time (and limit any claim for liquidated damages) when you caused the delay. Therefore, as a contractor, you can claim an extension of time when:
- you are not the cause of any delays; and
- those delays are out of your control.
If you claim an extension of time, you and the owner will agree to a new completion date. Notably, the other rights under the contract will remain.
When Can a Contractor Request a Time Extension?
As a contractor, any request for an extension of time should be for reasons outside of your control. Common reasons for delays requested by contractors can include:
- delays in the delivery of essential materials;
- delays resulting from variations requested by the owner;
- extreme or unusually bad weather;
- other disputes relating to the project.
You should be able to provide evidence to show that external factors, and not your underperformance, caused the delay. You should also aim to show that you are otherwise performing well as a contractor on the project.
Continue reading this article below the formWhat Does the Contract Say?
Always check the fine print on time extensions and your rights and obligations relating to those time extensions. Most contracts will include a clause allowing you to request an extension of time for certain causes of delay. Many include tight limits on when extensions of time can be granted. These clauses will often also include a requirement to give a certain period of notice to the other party to the contract. As the contractor, you must carefully follow any procedure for requesting an extension of time to avoid any disputes down the track.
How Do I Apply for an Extension of Time?
Your request for an extension of time should be in writing to the other party (or superintendent, contract administrator or relevant person on the project) and should include:
- how many additional days you need to complete the work;
- details of when and how the delay occurred, including any supporting evidence;
- any extra detail of steps you took to avoid the delay or otherwise deal with the cause of the delay;
- an updated schedule of when the work will be completed.
What Are Potential Issues I May Encounter?
Contractors may find themselves in disputes with owners or project managers over the completeness and persuasiveness of the documentation. This is particularly the case when demonstrating that external factors beyond the contractor’s control caused the delay.
The duration of the requested extension and its impact on the project timeline and costs can be a point of contention. Indeed, differing parties may have conflicting perspectives on the appropriate assessment of the length of time and the associated costs. Clarity, transparency, and thorough documentation are essential to navigate these potential pitfalls and minimise EOT-related disputes in construction projects.
Understanding how the contract assesses EOTs, including what parties can and cannot claim, is critical. Typical entitlements to EOTs include:
- delays caused by adverse weather events;
- design variations;
- client-driven delays; or
- unforeseen site conditions.
Delays due to the acts or omissions of the contractor, such as inadequate planning or design changes because of errors, are generally not claimable (unless expressly negotiated).
This guide provides key information on how to manage a business dispute as quickly and cost-effectively as possible.
Key Takeaways
As a contractor, you can request extensions of time in a construction project. However, you are only able to do so where the delays are due to circumstances outside your control. If the delays are due to your performance, the owner may have a claim for liquidated damages against you. It is important to follow the procedure set out in any time extension clauses in the construction contract and give full reasons for any delay when requesting the extension. You should also ensure the extension is approved in writing and the updated completion date confirmed by all parties to avoid disputes down the track.
If you have any questions about requesting an extension of time under a construction contract, our experienced construction lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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