- Posted by Doyles
- On September 17, 2015
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Delays are a common part of any contract, some are caused by the contractor, some by the principal and some by neutral external influences (eg the weather).
Contracts apportion the risk and consequences of delays in various ways, but generally, the law requires each party to a contract to be responsible for its own actions. As a consequence (and reasonably), this means the principle is responsible for the cost and consequences of delays it causes and the contractor is responsible for its delays. The cost and consequences of neutral delays are apportioned by the contract in a way agreed by the parties.
Defining the liability of the parties for any single cause of delay is therefore relatively straightforward, particularly if the contract is well drafted. The extent of the delay can be calculated the costs assessed and the liability apportioned. The process is relatively straightforward, even if reaching agreement as to the liability, extent and quantum is the subject of disputation.
Problems start to occur when several different causes of delay are in play at the same time. What is the effect of an inclement weather delay if the contractor’s progress is already stopped awaiting design information from the principal? Normally the contractor can expect to be compensated for delays caused by the principal by way of extensions of time and delay costs but inclement weather delays are normally a risk borne entirely by the contractor or at best have an entitlement to a nil cost EOT.
Similarly who is responsible if the contractor is delayed by procurement problems (its responsibility) and is also awaiting access to a work area to install the procured item (the principal’s problem)?
This paper will canvas the state of the law dealing with parallel delays and provide practical advice on the best ways of assessing and dealing with the consequences of parallel delays within a contract.
Download – Parallel Delays In Contracts – Who Pays?
Author: Jim Doyle Dip.CE, MIE (Aust), BEc (Hons), LLB (Hons). Partner, Doyles Construction Lawyers
Tel: (02) 9283 5388