Extension of time EOT in construction contracts

[edit] What is an extension of time?

Construction contracts generally allow the construction period to be extended where there is a delay that is not the contractor's fault. This is described as an extension of time (EOT).

Mechanisms allowing extensions of time are not simply for the contractor's benefit. If there was no such mechanism and a delay occurred which was not the contractor's fault, then the contractor would no longer be required to complete the works by the completion date and would only then have to complete the works in a 'reasonable' time, and the client would lose any right to liquidated damages.

[edit] How is an extension of time granted?

When it becomes reasonably apparent that there is, or that there is likely to be, a delay that could merit an extension of time, the contractor gives written notice to the contract administrator identifying the relevant event that has caused the delay. If the contract administrator accepts that the delay was caused by a relevant event, then they may grant an extension of time and the completion date is adjusted.

[edit] What types of delays might allow an extension of time?

Relevant events that might allow an extension of time may include:

• Variations instructed by the contract administrator on behalf of the client.
• Exceptionally adverse weather.
• Civil commotion or terrorism.
• Failure of the client or their consultants to provide information.
• Delay on the part of a nominated sub-contractor.
• Statutory undertaker's work.
• A delay in giving the contractor possession of the site.
• Force majeure (such as an epidemic or an 'act of God').
• Loss from a specified peril such as flood.
• Delays in the supply of materials or goods by the client.
• Strikes.
• Changes in statutory requirements.
• Delays in receiving permissions that the contractor has taken reasonable steps to avoid.

The contractor is required to prevent or mitigate the delay and any resulting loss, even where the fault is not their own.

[edit] How are claims for extension of time assessed?

Assessing claims for an extension of time can be complicated and controversial. There may be multiple or concurrent delays, some of which are the contractor's fault and some not. There are many occasions where contractors contribute to delay themselves by their performance during design periods, when producing drawings, mock ups and samples or in interfacing with sub-contractors.

In North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744, the Court of Appeal confirmed that parties are free to agree contract clauses which exclude any entitlement to an extension of time where a contractor-caused delay occurs concurrently with a relevant event, and that such clauses do not offend the prevention principle. This means the specific wording of the extension of time provisions in a contract needs to be checked carefully, as they may displace the more general common law approach to concurrent delay.

Crucial in assessing applications for extension of time is the quality of the information provided and records available. For more information, see How to prepare a claim for an extension of time.

Claims should be judged against the actual progress of the works, not the programme, and must demonstrate the link between the breach (cause) and the delay.

The contract administrator may review extensions of time after practical completion and further adjust the completion date.

Claims for extension of time can run alongside claims for loss and expense (relevant matters); however, one need not necessarily lead to the other.

It is very important when deducting liquidated damages to ensure that the correct contractual procedures are adhered to. In the case of Octoesse LLP v Trak Special Projects Ltd [2016], Justice Jefford held that Octoesse was not entitled to deduct liquidated damages as they had agreed to an extension of time after a certificate of non completion had been issued. The JCT Intermediate Building Contract is constructed such that:

'If the Contractor fails to complete the Works or a Section by the relevant Completion Date, the Architect/Contract administrator shall issue a certificate to that effect. If an extension of time is made after the issue of such certificate, the extension shall cancel that certificate and the Architect/Contract Administrator shall where necessary issue a further certificate.'

As Octoesse had not issued a further certificate of non completion, they were not entitled to deduct liquidated damages.

To find out more, see Octoesse LLP v Trak Special Projects Ltd.

[edit] Related articles on Designing Buildings

• Certificate of non completion.
• Common refusals of extensions of time.
• Completion date in construction contracts.
• Concurrent delay.
• Contract administrator for construction contracts.
• Contractor delay.
• Delays on construction projects.
• Force majeure in construction.
• How to prepare a claim for an extension of time.
• Liquidated damages in construction contracts.
• Loss and expense.
• North Midland Building Ltd v Cyden Homes Ltd.
• Octoesse LLP v Trak Special Projects Ltd.
• Practical completion.
• Reasonable time.
• Relevant event.
• Relevant events v relevant matters.
• Relevant matters in construction contracts.
• Time at large.
• Variations in construction contracts.

[edit] External references

• Herbert Smith, Extensions of Time: What Happens If the Contractual Machinery Breaks Down?
• Atkinson Law, Delay and Disruption - The Contractor's Obligations as to Time.

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