FAQs

The following FAQs are addressed below:

• If the contractor is late but does not delay the works because the employer is also late providing information is the contractor entitled to an extension of time?
• Is the employer entitled to use float in the contractor's programme?
  
• When is time at large?
  
• Why are extensions of time of benefit to the employer?
  

If the contractor is late but does not delay the works because the employer is also late providing information is the contractor entitled to an extension of time?

This is often referred to as concurrent causes of delay. Traditionally standard forms of contract have not addressed this scenario and therefore it has been up to the courts to determine whether an extension of time should be granted in such cases. As a result of this a body of inconsistent case law has developed and a number of inconsistent approaches have been adopted. Perhaps the most widely held view is that where the contract is silent on such matters an extension of time should be granted for the full delay if the delay caused by the employer is the dominant cause of delay to the project. However, if the dominant cause of delay is the delay caused by the contractor then no extension of time should be granted.

Many employers now amend standard forms of contract to clarify whether an extension of time should be granted where there are concurrent causes of delay. In such cases the courts will interpret the intentions of the parties as set out in the contract.

Is the employer entitled to use float in the contractor's programme?

There are many types of float in the programme. One type of float is attributed to activities that are not on the critical path. Another type of float may be an activity specific contingency. Yet another type of float may be whole project float where the contractor plans to finish the project before the contract completion date.

If the employer causes a delay most standard forms of contract require the contractor to minimise the impact of that delay by re-structuring activities on site. Therefore the employer's delay will use the float in the non-critical activities without a detrimental impact on the completion date of the project.

With regard to activity specific contingencies most delay analyses will involve an analysis and validation of the contractor's programme. If it is found that activities are unreasonably long (eg contain too much contingency) or are unreasonably optimistic then they will be adjusted accordingly. This author submits that the contractor is entitled to retain a reasonable amount of activity specific float by way of contingency which the employer is not entitled to use until after the risk for which the contingency has been allocated has either materialised or passed.

With regard to whole project float there are two competing theories. For example if there are 3 weeks whole project float but the employer defers possession by 3 weeks. During construction events arise which delay the contractor by 3 weeks. On the one hand the employer's delay analysed in isolation has not caused any delay (it has only used up the float) and therefore no extension of time should be granted. On the other hand there is some case law to suggest that the benefit of such float ought to be apportioned equally across all of the various causes of delay.

When is time at large?

Time is said to be 'at large' when there is no definite completion date. The contractor's only obligation is to complete the works within a reasonable time. This may either be where no completion date was agreed in the contract or where the employer has delayed the contractor and cannot extend the contract completion date.

Why are extensions of time of benefit to the employer?

If the employer delays the contractor then, in the absence of extension of time provisions, the employer is unable to deduct liquidated damages. Therefore by granting an extension of time in such circumstances the employer is protecting his right to deduct liquidated damages.