What Are a Contractor’s Rights to an Extension of Time?

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 to follow the correct process when requesting it. 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.

Extensions of Time – Basic Rules

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 is not able to 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, and 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.

What 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. It is essential that as the contractor, you carefully follow any procedure for requesting an extension of time to avoid any disputes down the track.

How to 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.

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, contact LegalVision’s construction lawyers on 1300 544 755 or fill out the form on this page.