May 20, 2021
Q&A: Prolongation, JCT, NEC, and Force Majeure
In this blog post, ICCP President, Paul Gibbons, answers questions related to issues arising from COVID-19. He compares claiming for COVID-related prolongation costs, profit, and extension of time under three standard forms of contract, discusses financing charges and DAB decisions, and looks at provisional sums. These questions were answered in our sixth Construction Clinic session, which took place in May 2020. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: If COVID-19 is a force majeure event and the employer is a government department and there was a change in law that has restricted movement, broken down the supply chain, and restricted air travel of the Contractors' experts, will the Contractor be entitled to prolongation costs, profit, and extension of time? And if so, what kind of documents can support such a claim in case the Contractor has COVID-19 delays? And indeed, in that regard, what can his defence be for liquidated damages? Answer: I'm not…
February 20, 2021
Q&A: Prolongation, FIDIC, and Force Majeure
In our third Construction Clinic session, which took place in April 2020, Mark Watson answered questions related to prolongation and FIDIC contractual issues arising from COVID-19. The following questions have been excerpted from that session. The entire webinar may be viewed on-demand on YouTube. Questions about prolongation under JCT and NEC contracts, are addressed in this post from the first part of Construction Clinic 3. Question 1 Question: If an Employer’s delay, excusable and compensable, is ongoing and determines the date of completion and, after the effects of COVID-19, there is an additional delay of completion, will the overlapping delay be compensated? Answer: This question is a hot topic in construction. In terms of the overlapping period, you need to look at the terms of the contract. You’ve got to consider there are two parts under Sub-clause 19.4: part A is Extension of Time and part B, additional payment. Part B is subject to certain requirements under Sub-clause…
February 10, 2021
Q&A: Prolongation, JCT, NEC, and Force Majeure
In our third Construction Clinic session, which took place in April 2020, Paul Gibbons answered questions related to prolongation and NEC and JCT contractual issues arising from COVID-19. The following questions have been excerpted from that session. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: What is the remedy under the NEC3 Engineering Construction contract where there is a defect notified by the Employer, but this is a latent defect and notified after the defects date. Is the Contractor obliged to correct this? Answer: The NEC3 sets out the obligations of the Project Manager and the Contractor. The obligations related to notifications of defects are set out in clause 42. The Contractor’s obligations in terms of dealing with and resolving the defect is set out in clause 43. With latent defects after the defects date, it is the Contractor’s responsibility until the end of the limitation period under English law, which is either 6 or 12 years depending…
July 20, 2020
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…
September 16, 2018
Claiming Prolongation Costs when there is no Entitlement to an Extension of Time
It is generally accepted that, in a situation where a contractor is entitled to an extension of time, he is also entitled to claim for time-related costs for site overheads and head office running costs for the additional time that he was obliged to remain on site. This is based upon a fundamental principle of law, that a party who has been prevented from performing his obligations by the other party is entitled to compensation to put him back into the position that he would have been in, had the act of prevention not occurred. In construction terms, this usually means the reimbursement of the contractor’s costs for providing site management, site establishment, plant and equipment, insurances, additional financing costs and the like and head office costs, which are often referred to as prolongation costs for the extended time.