Last edited 01 Nov 2019

Extension of time EOT in construction contracts

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).

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.

Variations.
Exceptionally adverse weather.
Civil commotion or terrorism.
Failure 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.
The supply of materials and 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.

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 inter-facing with sub-contractors.

Crucial in assessing applications for extension of time is the quality of the information provided and records available.

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.

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. The client would lose any right to liquidated damages.

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.

[edit] Related articles on Designing Buildings Wiki

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.