Delays...who pays?

Concurrent delays could leave you out of pocket

Sometimes delays are inevitable, especially in more complex construction projects.  But will the contractor always be entitled to further payment for the extra time spent on site?  

In many circumstances, a delay on a construction project entitles the contractor to extra time in order to complete the building works.  Along with this entitlement goes additional payment for the extra time spent on site.  

Such claims can be worth a lot of money as they include claims for both the overheads and the profit of the contractor.  

There are types of delays, however, that do not entitle a contractor to an extension of time and therefore do not give entitlement to any further payment.  It has become standard practice for construction contracts to contain a clause stating that where there are two or more causes of the delay on site, one of which would not entitle the contractor to an extension of time, no extension of time is given.  This type of delay is often referred to as a ‘concurrent delay’.  Effectively, it means that the contractor would not be entitled to any extension of time for the whole length of that concurrent delay.

The recent case of North Midland Building Limited v Cyden Homes Limited, saw such a clause upheld in the Technology and Construction Court.  

In the light of this legal decision it seems inevitable that employers will seek to have such clauses incorporated into their contracts, as it offers them a degree of protection against extra costs.  But contractors will need to be careful to avoid concurrent delays if at all possible, and to carefully document when such delays do occur so as to keep the period of concurrent delay to a minimum.

If you have questions about any legal aspect of your construction contract, please get in touch. Contact the team on 01245 453813.