What is "Time at Large"?

A blog reader got in touch asking for an explanation of the term “time at large”. This is not something that I have personally come across in practical terms, so for the advice that I am about to give, I am indebted to my former boss, Roger Knowles, who provides an explanation in his book, 150 Contractual Problems and their Solutions. Roger explains:

Time is at large when a contract is entered into with no period of time fixed for completion. Where this occurs, the contractor’s obligation is to complete within a reasonable time.

I have never experienced such a situation and I expect that when it does occur, it will be on smaller projects where the contract is between parties unfamiliar with good practice.

There may also be circumstances which arise rendering a completion period fixed by the contract as no longer operable, again rendering time at large. An example is where a delay is caused by the employer and the terms of the contract make no provision for extending the completion date due to delays by the employer.

Although I have never worked on a project where the "time at large" argument has been invoked, I have worked on many projects where the employer has modified a standard form of contract to remove employer-risk items. An example would be where the normal provision for time to be awarded for a delay caused by late access to the site had been excluded and access is not provided at the agreed time. Obviously, the contractor cannot proceed if he cannot gain possession of the site, but there would be no clause under which an extension of time could be claimed, thus rendering the contractual period inoperable.

Another very common reason which would cause time to be "at large" is where the contractor submits a valid extension of time claim, but this is either not responded to, or an extension of time is not awarded and the contractor completes later than the contractual completion date. In practice, this is usually resolved retrospectively after completion by negotiating an award based on the extension of time that the contractor would reasonably have been entitled to, or by the parties just “doing a deal” to close the matters.

In these days of COVID-19 where delays have occurred to many of the Contractor’s activates and the delay and disruption have been for extensive periods, I can foresee a messy situation where time may well become at large. So, how can we avoid it?

Contractors - do not wait to submit your claims. If the final effects of the delays cannot be ascertained, submit interim claims until such time that the effects may be finally calculated.

Engineers – do not ‘park’ the claims for response later. Respond to them within the contractual time frames and if an extension of time is justified, make sure that you award one. If you do not act, time will definitely become "at large".

This blog was written by ICCP Executive Officer and Fellow, Andy Hewitt

If you would like to learn more about claims, check out our training partner, Claims Class.

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What Qualifies as Force Majeure Under FIDIC? 2020 Update

One of our blog subscribers requested advice on force majeure under the FIDIC Red or Yellow books. The good news is that the FIDIC force majeure clauses are nearly the same under the Red, Yellow, Silver, and Gold forms of contract, so the following is applicable to all of them.

Sub-Clause 19.1 (Definition of Force Majeure) the Red Book states that:

‘In this Clause, "Force Majeure" means an exceptional event or circumstance:     
(a) which is beyond a Party's control,     
(b) which such Party could not reasonably have provided against before entering into the Contract,     
(c) which, having arisen, such Party could not reasonably have avoided overcome, and     
(d) which is not substantially attributable to the other Party.’

Thus, to qualify as a force majeure event, it has to tick all of the boxes (a) to (d) above.

The clause, however, goes on to offer further definitions as follows:

Force Majeure may include, but is not limited to, exceptional events or circumstances of the kind listed below, so long as conditions (a) to (d) above are satisfied:
(i) war, hostilities (whether war be declared or not), invasion, act of foreign enemies,     
(ii) rebellion, terrorism, revolution, insurrection, military or usurped power, or civil war,     
(iii) riot, commotion, disorder, strike or lockout by persons other than the Contractor's Personnel and other employees of the Contractor and Sub-contractors,     
(iv) munitions of war, explosive materials, ionising radiation or contamination by radio-activity, except as may be attributable to the Contractor's use of such munitions, explosives, radiation or radioactivity, and     
(v) natural catastrophes such as earthquake, hurricane, typhoon, or volcanic activity.’

So, not only does it have to meet the above requirements (a) to (d), but the event should also be ‘of the kind listed’ above.

If a force majeure event does occur and either party is prevented from performing its obligations, then the party affected is obliged to give the other party notice under Sub-Clause 19.2 (Notice of Force Majeure).

You will note that Sub-Clause 19.1 (Definition of Force Majeure) does not specify any remedy or entitlement in the case that a force majeure event occurs. For this we must look to Sub-Clause 19.4 (Consequences of Force Majeure), which states that:

‘If the Contractor is prevented from performing any of his obligations under the Contract by Force Majeure of which notice has been given under Sub-Clause 19.2 (Notice of Force Majeure), and suffers delay and/or incurs Cost by reason of such Force Majeure, the Contractor shall be entitled subject to Sub-Clause 20.1 (Contractor's Claims) to:
(a) an extension of time for any such delay, if completion is or will be delayed, under Sub-Clause 8.4 (Extension of Time for Completion), and
(b) if the event or circumstance is of the kind described in sub-paragraphs (i) to (iv) of Sub-Clause 19.1 (Definition of Force Majeure) and, in the case of sub-paragraphs (ii) to (iv), occurs in the Country, payment of any such Cost.’             

Consequently, the Contractor would be entitled to an extension of time if the event delayed the completion date. He would also be entitled to additional payment, but only under certain circumstances. The circumstances entitling the Contractor to additional payment are defined by reference back to Sub-Clause 19.1 (Definition of Force Majeure) where we will see that:

The event must have occurred in the Country where the Permanent Works are to be executed and

Natural catastrophes such as earthquake, hurricane, typhoon or volcanic activity’ are excluded

Consider the following: a claim for an extension of time and additional payment has been submitted by a contractor under the force majeure provisions when the police closed the project Site down for security reasons during a political conference that took place in a hotel across the road from the Site. Do you think that this comprises a qualifying event?

Leave a comment below with your opinion on whether the above scenario qualifies under FIDIC force majeure provisions and why or why not.

This blog was written by ICCP Executive Officer and Fellow, Andy Hewitt

If you would like to learn more about claims, check out our training partner, Claims Class.

Enjoying the ICCP's articles? Why not sign up to our mailing list and receive new articles straight into your mailbox. Or, want access to a library of members-only content on contracts and claims, check out our Membership page and join the ICCP community today.


How to Ensure Engineers' Responses and Instructions Do Not Result in Expensive Claims

A request was made by one of our blog followers to examine the Engineer’s duty to provide instructions and responses within a reasonable time. In my experience, failure of the Engineer to comply with such obligations often gives rise to claims, so this is definitely worth a blog post. This example uses the 1999 FIDIC Red Book, although other forms of contract contain similar provisions.

Sub-Clause 1.3 (Communications) states that ‘Approvals, certificates, consents, and determinations shall not be unreasonably withheld or delayed’ which immediately begs the question: what constitutes unreasonable delay? The contract itself provides guidance in many circumstances.

For example, Sub-Clause 14.6 (Issue of Interim Payment Certificates) provides that payment certificates shall be issued within 28 days of the Contractor’s Statement being received and 10.1 (Taking Over of the Works and Sections) obliges the Engineer to either issue the Taking Over Certificate or reject the Contractor’s application within 28 days.

Sub-Clause 1.9 (Delayed Drawings or Instructions) deals with less specific time frames and places an obligation on the Contractor to provide a notice ‘whenever the Works are likely to be delayed or disrupted if any necessary drawing or instruction is not issued to the Contractor within a particular time’. If the Engineer does not act within the required time and the Contractor suffers delay or incurs Cost, the Contractor is entitled to make a claim. Good contract administration will ensure that requests for information, submittals and the like contain a “response required by” date so that the Engineer is made aware of matters which may cause delay.

A particular response procedure that is often ignored by Engineers is the obligations under Sub-Clause 20.1 (Contractor’s Claims) and 3.5 (Determinations) when responding to claims. Firstly, the Engineer is obliged to ‘respond with approval, or with disapproval and detailed comments’ within 42 days of receiving a claim. He is also required to ‘consult with each Party in an endeavour to reach agreement’ and ‘give notice to both Parties of each agreement or determination, with supporting particulars’.

It should be noted that any failure by the Engineer to act in accordance with the Contract and which causes delay or the incurrence of Cost would entitle the Contractor to make a claim, so it is vitally important that the Engineer respects time frames.

This blog was written by ICCP Executive Officer and Fellow, Andy Hewitt

If you would like to learn more about claims, check out our training partner, Claims Class.

Enjoying the ICCP's articles? Why not sign up to our mailing list and receive new articles straight into your mailbox. Or, want access to a library of members-only content on contracts and claims, check out our Membership page and join the ICCP community today.


How to Administer the Contractor’s Programme

One of our blog followers asked for some advice on the administration of the Contractor’s programme. The questions raised relate to fairly frequently occurring situations, so this subject is definitely worthy of a blog post. I have reproduced the queries below and I will refer to the FIDIC forms of contract and terminology when providing my advice.

Requested Advice:

A summary of general principles which would avoid the Contractor submitting erroneous programme updates, for example, don’t be bullied by the Engineer into submitting a programme based on the original completion dates and which therefore absorbs the impacts of delay events (thus losing entitlement).

So, let’s be clear what a programme update actually is. First, we must establish the Contractor’s programme, which is often referred to as the baseline programme. This programme should be the Contractor’s best estimate of the sequence and timing of how he intends to carry out the Works and should be based on the Contract at the time it was entered into. An update is where the Contractor records actual progress onto the baseline (or any subsequent revision to the baseline) to forecast the Time for Completion, at the time of the update.

I have witnessed many occasions whereby the Contractor is late submitting his programme and by the time he gets around to doing so, Employer delays have occurred. The Engineer then wants the Contractor to incorporate the delays into the programme and maintain the Contract Time for Completion. The message to Contractors here is, “do not delay in submitting your baseline programme”.

FIDIC Sub-Clause 8.3 (Programme) only allows the Engineer to give ‘notice to the Contractor stating the extent to which it does not comply with the Contract’. Consequently, the Engineer has no right to pressure the Contractor into including post-contract events.

Once the baseline programme has been established and delay events have occurred, or particularly if extensions of time have been awarded, the Contractor should submit a revised programme. This will then be the programme against which future progress updates are carried out.

Requested Advice:

Examples of when the Contractor could reasonably refuse to submit a programme update, i.e., if the Engineer / Employer has failed to review a previously submitted EOT claim.

Maybe the terminology had become confused here. If the poster is referring to an ‘updated programme’, FIDIC Sub-Clause 4.21 (Progress Reports) obliges the Contractor to submit a ‘comparison of actual and planned progress’ as part of the progress report. An update is the usual way of doing this.

If the query relates to a ‘revised programme’, both FIDIC Sub-Clause 8.3 (Programme) and 8.6 (Rate of Progress) oblige the Contractor to revise the programme if progress is not consistent with the prevailing programme. He cannot therefore simply refuse to do so.

If the Contractor has submitted an extension of time claim that has not been responded to, then it would be reasonable to include the claimed extension of time within the revised programme on the basis that entitlement exists until the claim is either rejected or reduced. The message to Contractor’s here is that you must submit your extension of timely claims in a timely manner, or you will be obliged to meet the prevailing time for completion or suffer the consequences.

Requested Advice:

Advice on how the Contractor can avoid being coerced into accelerating the progress of the Works – or – the conditions which the Contractor must ensure are in place before he agrees to accelerate (if the delay is non-culpable), i.e., ensuring that a prior acceleration agreement with conditions is in place before actually accelerating.

I am assuming that this is a situation whereby the Contractor is entitled to an extension of time, but the Employer wishes the Contractor to meet an earlier date. In order to achieve the earlier date, the Contractor must accelerate.

I have three pieces of advice here. First, acceleration costs are usually difficult to prove and to agree; second, this is especially so after the acceleration has taken place because at this time, the Employer or Engineer may lack any incentive to pay the Contractor for the acceleration measures; and third, never accelerate without a specific instruction to do so.

The Contractor only has the upper hand before he has instigated the acceleration, so this is the time to either agree on a cost of acceleration, or to at least agree on the principles of how the costs will be calculated at a later date. The agreement should be recorded before the Contractor takes any action.

I hope this rather long blog provides some useful advice.

This blog was written by ICCP Executive Officer and Fellow, Andy Hewitt. Andy has also written a detailed paper for members that discusses COVID-19 in relation to the FIDIC 1999 contracts (Red and Yellow Books). If you're an ICCP member, please login to the Member's Area to download. 

If you would like to learn more about claims, check out our training partner, Claims Class.

Enjoying the ICCP's articles? Why not sign up to our mailing list and receive new articles straight into your mailbox. Or, want access to a library of members-only content on contracts and claims, check out our Membership page and join the ICCP community today.


Top 10 Tips for Effective Letter Writing

One of the things that I notice upon reviewing the records to prepare a claim, reviewing claims on behalf of the respondent, or reviewing the particulars put forward in a dispute, is the poor standard of letter writing. This ranges from “could have been better” right through to “I have no idea what this letter means”. If your letters fall into this category, you are not doing yourself or your company any favours and you could be doing considerable harm. This blog, therefore, contains my Top 10 Tips for effective letter writing.

You are not writing the letter for your opposite number on the project. You are writing it as an accurate record to be relied upon in case a claim or dispute arises in the future. The letter must, therefore, be fully understood by someone who has no prior knowledge of the project or the matters in question.

  1. The letter should be a stand-alone document. In other words, a reader with no prior knowledge should be able to understand it without reference to any other documents.
  2. Quotations are very powerful, so rather than describing things in your own words, use quotations from other records or the contract. When you do use quotations, make sure that you identify them as such.
  3. Never use abbreviations or acronyms. Even if these are in general use on the project, they may not be understood by someone who is unfamiliar with the project. It takes hardly any additional time to type the words out in full and this is time well spent.
  4. Avoid the use of words such as ‘they’, ‘him’ and ‘it’ when referring to the parties, people or companies, because this often leads to misunderstanding and confusion. Use the contractual names – ‘the Employer’. ‘the Contractor’, ‘the Engineer’ or their actual names.
  5. When referring to the contract, use the names of clauses as well as the clause numbers. ‘Sub-Clause 20.1 (Contractor’s Claims)’ is much more effective and helpful than just ‘Sub-Clause 20.1’, which relies on the reader having intimate knowledge of the contract.
  6. When possible, substantiate facts put forward and statements made in the letter. ‘As recorded under Minute 12.3 of the Site Meeting Minutes held on 14 August 2019, we were instructed to suspend work in Area B’ is better than ‘We were instructed to suspend work in Area B on 14 August 2019’.
  7. Be specific. Phrases such as ‘This is for your information and action’, ‘we reserve our rights’ or ‘please do the needful’ are meaningless. Specifically state what action is necessary, what rights you are entitled to, and what ‘the needful’ actually is.
  8. It is a fact that if you proofread your own work, you will read what you think you have written, rather than what you have actually written, so have your letter proofread by a colleague. As well as checking for typos, poor grammar, and poor choice of language, your colleague should also be able to point out any passages that are not properly explained or understandable. For this reason, it is preferable to have a colleague from a different discipline carry out the proofreading.
  9. Finally, this advice applies equally to the compilation of minutes, reports, claims responses, determinations, decisions, instructions, and anything else that will form part of the project records.

This blog was written by ICCP Executive Officer and Fellow, Andy Hewitt. Andy has also written a detailed paper for members that discusses COVID-19 in relation to the FIDIC 1999 contracts (Red and Yellow Books). If you're an ICCP member, please log in to the Member's Area to download. 

If you would like to learn more about claims, check out our training partner, Claims Class.

Enjoying the ICCP's articles? Why not sign up to our mailing list and receive new articles straight into your mailbox. Or, want access to a library of members-only content on contracts and claims, check out our Membership page and join the ICCP community today.