Contract terms may describe construction delays

| Jun 15, 2022 | Business Litigation |

Construction agreements may include terms outlining when developers may anticipate a legal action over completion delays. As reported by LevelSet.com, an agreement’s language may determine whether a delay stems from reasonable and excusable circumstances. A delay could otherwise result in a breach of contract.

Parties may limit improper claims or prevent disputes by establishing agreed-upon timelines. Agreements may outline realistic conditions that could delay a completion date. Based on whether a delay classifies as “critical” or “non-critical,” a developer may resolve an interruption without facing a legal action.

Differences between critical and non-critical delays

Parties may discuss and set time frames required to meet a project’s milestones and final completion. An unexpected delay noted as “critical” generally results in a project not meeting its completion date. A “non-critical” delay may affect a project’s milestones but may not extend its completion.

A non-critical delay may, however, become a critical delay when a developer could have prevented the setback. According to the American Bar Association, failing to order needed supplies such as steel may result in a non-excusable critical delay.

Contracts may contain an excusable delay clause

After determining if a delay classifies as critical or non-critical, parties may have an option to extend the completion date. Construction agreements may include clauses describing excusable delays that fall outside of a developer’s control.

As noted by Compliance Week, contracts involving federal construction projects outline excusable delays that may not result in a breach. Clauses may, for example, describe acceptable delays due to work stoppages. Acquisition.gov notes that excusable delays include fires, embargoes, floods or quarantine restrictions.

Parties may protect themselves against costly lawsuits by negotiating reasonable timelines and completion setbacks. Terms, language and clauses may illustrate when a breach has or has not occurred.

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