Extension of Time Claims
By Blaise Alexander, Lovegrove & Cotton.
Unforseen delays in completion times for commercial and domestic building projects can result in potentially exorbitant claims for liquidated damages which could financially cripple a builder.
It is essential that a builder understand the necessities of how and when to file an Extension of Time (“EoT”) claim in order to protect themselves from the possibly disastrous results of delays which are not accounted for in the contract.
A builder is required to make allowances in the estimated time for completion of the contracted building works for reasonable and foreseeable delays, such as those caused by inclement weather, weekends, public holidays, RDO’s; and other foreseeable breaks; and any other reasonable delays having regard to the nature of the contract.
As soon as a builder becomes aware that it is likely for any reason that the project will not be finished by the completion date they must give the owner written notice and make an EoT claim, stating that the delay has been occasioned, the reasons and possible duration of the delay.
Beware that for some EoT claims, particularly in commercial contracts, there is a strict timeframe, in some instances two days, for notifying an owner of a delay and making a claim in writing.
- Inclement weather and its effects (over and above that specified in the contract);
- Industrial disputes or action affecting the work of tradespeople, manufacturers or supply of materials;
- Disputes with neighbouring owners or residents or threatened proceedings, that are not the builders fault;
- Anything done or not done by the owner or an agent of the owner;
- A delay in getting an approval, provided it is not the builder’s fault;
- Any other cause that is beyond the builder’s direct control;
- Suspension of works by the builder.
There are provisions for the owner to wholly or partly dispute the EoT claim, so a builder must be clear about whether they are entitled to an EOT, or they may expose themselves to liability for damages. In a commercial project this could result in increased costs of possibly thousands of dollars per day/week.
It is vital that you seek professional legal advice when faced with unexpected delays in the project which could result in huge liquidated damages claims later on. Professional legal advice should immediately be sought where there is a disputed EoT claim.