Extension of Time Under Building Contracts, Some Notes
By Stefano Marchesin, Construction and Planning Law Expert
Building a commercial project, a new home or renovating an existing home is a necessarily a somewhat flexible process, as delays can occur not only due to inclement weather, but for reasons such as availability of materials and tradespeople. This article will give contractors a few pointers on how to go about Extensions of Time in building contracts.
It is usual for a building contract to contain a clause regarding the time for completion. In the case of Domestic Building Contracts in Victoria for example, some foreseeable delays must be accounted for:
- Inclement weather
- Public holidays
- Rostered days off
- Builder’s holiday close down period; and
- Other foreseeable delays
Indeed, Section 32 of the Domestic Building Contracts Act 1995 requires the inclusion of these estimates.
In other building contracts, such as commercial building contracts, it is usual for the contract to detail a process to allow for delays and the consequence of extending the time for the completion of the contract.
Sometimes the clause(s) may be worded with “legalese” and the process of properly dealing with delays in accordance with the contract can be confusing. Contact Lovegrove Solicitors if you are an owner or a builder and experience delays with your project completion; you must properly follow the process in the contract, otherwise you may be liable for damages.
The usual circumstances which can lead to an Extension of Time are as follows:
- a variation to the building works;
- a suspension of work;
- inclement weather (causing a cessation in the building work) over the number of days as specified in Schedule 1);
- disputes or proceedings (which are not your fault) and involving neighbouring owners or residents;
- a civil commotion/industrial dispute which affects the tradespeople involved on the building site or the manufacturers/suppliers of materials to be used on site;
- any act/omission by the owner or the owner’s employee relating to the building works;
any delay in the obtaining of an approval (as long as its not your fault); or
Commercial Subcontractors Beware!
Commercial building contracts usually contain a clause which requires written notice to the Principal within a certain time period, such as two days, for any delay to be allowed. Failure to give written notice can result in a claim for damages (sometimes call Liquidated or Agreed Damages) being made against the subcontractor, even when the delay is not caused by them.
So, for example, you are the plasterer but cannot complete your works because the electricians haven’t finished. Your contract is likely to contain a clause for Extension of Time requiring written notification, which you must comply with to avoid an ‘ld’ claim.
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