What is an Extension of Time?
An extension of time (EOT) is a clause, found in the majority of commonly used contract types (for eg NECs or JCTs) that allows for changing the practical completion date due to unanticipated events.
Are You Entitled to Claim a Time Extension?
In principle, the contractor will be entitled to an extension of time if a delay was brought on by an incident that was the employer’s fault. The contract completion date is postponed by a time extension, giving the contractor more time to complete the work. Establishing the reason for the delay and the length of the delay is required to determine if a contractor is eligible for a time extension. This will be quite simple in some circumstances, but highly tough and debatable in many.
If a delay has been caused by an event that is the employer’s responsibility, then in general, the contractor will be entitled to an extension of time. – RICS professional guidance, UK, Extensions of time, 1st edition
Time Extension reasons
What are the time extension claim reasons? Here we will answer this question according to the two most common contracts in the UK.
The JCT Standard Building Contract 2011’s clauses 2.26 through 2.29 cover changes to the completion date. These provisions resemble paragraphs 2.16 to 2.19 of the 2011 JCT Standard Building Subcontract.
- deferment of possession of the site
- works by statutory undertakers
- exceptionally adverse weather
- civil commotion
- terrorism and strikes; and
- ‘any impediment, prevention or default … by the Employer’.
The first section of the contract (the “Core Clauses”), specifically clause 16 of section 1, as well as sections 3 and 6, primarily address delay events. Section 3 generally discusses “time,” Clause 16 addresses “notices” or “early warnings,” and Section 6 takes “compensation occurrences” into account.
The “Main Option Terms,” “Secondary Option Clauses,” and “Contract Data” sections of the NEC3 contract contain other important clauses.
- deferment of possession of the site
- works by others (which would include works by statutory undertakers)
- unusually adverse weather; and
- events causing delay that neither party could prevent or foresee (which would include civil commotion, terrorism and strikes, if these are ‘Employer’s risks’ under clause 80.1).
Also: In our article named, TOP 5 REASONS WHY CONSTRUCTION PROJECTS GET DELAYED, we explained most common delays with examples.
The majority of other types of construction contracts, including the conventional forms of contract mentioned above, call for the contractor to formally notify the employer in writing of delays to the works either before the delay event occurs or as soon as practical after.
The contractor must generally state if it anticipates the delay would affect the contract completion date and, if so, by how much. The written notice is often not required to be in a particular format and will typically consist only of a letter or email informing the employer of the delay and providing any additional information necessary by the terms of the contract.
If the delays have been thoroughly discussed at formal site meetings, informal meetings, and over the phone, it may seem strange to inform the employer in writing. In these situations, a contractor may very easily believe that the employer is fully aware of the fact that the work is behind schedule, as well as the causes and expected length of the delay.
However, even if this only verifies what has been stated, a contractor should deliver that notice if the contract requires formal written notification to be provided. If a dispute arises, arguments about a lack of sufficient notice of delay frequently surface; occasionally, an employer may try to defeat a claim due to a lack of contractual notices.
Understanding AND Assessing the delays
It can be challenging and controversial to evaluate requests for extensions of time. Multiple or simultaneous delays could occur, some of which would be the contractor’s responsibility and some wouldn’t.
The difference between the date the works are completed and the current contract completion date is used to calculate project delays. This retrospective activity will be easy if the works have been finished. The work is not limited to simply measuring the delay period, though. Only the portion of the delay for which the employer is accountable under the terms of the contract will be covered by a contractor’s right to an extension of time. Therefore, it is required to determine whether the contractor is entitled to all, some, or none of the additional time needed to perform the works once the delay period has been defined.
Furthermore, because extensions of time are frequently handled prospectively (that is, before the actual completion date is known), in many circumstances the real length of the delay won’t be known when an extension of time claim is made and considered. The difference between the planned completion date and the present contract completion date must be used to calculate the delay time in these situations. (as per RICS’s advise)
To answer questions about who is to blame for delays and/or to calculate the expected duration of delays, the schedule for the works is typically reviewed and analysed.
Due to the many changes and/or updates that take place to programmes during projects, it can occasionally be challenging for stakeholders to come to an agreement on which programme should be utilised to conduct the review. The odds of determining the cause and extent (or anticipated cause and extent) of completion delays will be drastically lowered if a schedule is not agreed upon as the benchmark for evaluating a time extension.
Good programme & records are life saver
If there is good records such as progress reports, photographic reports, delay logs available, and also a good project programme exists, then planner & QS can assess the delay properly.
When there is a risk of delay on a project the first step the parties should do is reviewing their contract. It will nearly always outline the necessary formalities for notices, the dissemination of information, and the deadlines for filing claims and/or evaluations. It is important to adhere to these procedural criteria.
The best method of measuring the delay must then be taken into account. Assessments must pinpoint the reason for the delay, how long it lasted, and whether the event will (or already has) affected the project’s overall completion.
If you would like to cover your project contractually against delay costs, reach us for our planning & delay consultancy services. Check it out here.