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In regard to completion ...

In regard to completion ...

Extension of Time (EOT) and Delay occurs


when the Works

Clause 22(1) requires that the Contractor shall complete the Works on or
before the Date of Completion [as stated in the Appendix]
Clause 22(2) states that complete and completion shall mean the
completion certified by the Architect under Clause 24(4)

are not completed by the Contractual Date for Completion

Similarly, Clause 3(4) gives definition that completion shall mean the
completion certified by the Architect in his Completion Certificate under
Clause 24(5)

ie not completed within the Contract Period;

Clause 24(4) provides that a Completion Certificate shall be issued by the


Architect when the Works appear to be complete and to comply with the
Contract in all respects.
Clause 24(5) further provides for completion being certified subject to a
schedule of minor outstanding works.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

In regard to completion ...

In regard to completion ...

Note:

Note:

Building contracts typically are not with time of the


essence ie delay in completion will not
cause material harm /
render the agreement meaningless /
render it impossible for the principal purpose or the
performance of obligations (ie the building) to be
accomplished

Building contracts typically are not with time of the


essence ie completion by the date for Completion
is a warranty term of contract, ie a promise / assurance
by the Contractor to complete by a certain date, which if
breached would entitle the Employer to [liquidated]
damages, but not
a condition term of contract that would entitle the
Employer to treat the contract as repudiated or
fundamentally breached (allowing the contract to be
terminated or avoided in addition to any damages).
hence, the EOT and LD provisions in contract indicate that time is not of
the essence (even though achieving completion by the Date for Completion
may be very important)

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

In regard to completion ...

In regard to completion ...

Clause 25 provides for where the Works involve


different Phases or Stages

Clause 26 provides for where the Employer wants


to occupy part of the Works
which is sufficiently complete, but
before the whole of the Works are actually
completed

Each Phase or Stage has separate Completion Certificates


and LD, insurance, maintenance, release of Retention
Monies, [but not Final Certificate])
applied mutatis mutandis as if each Phase or Stage
was the subject of a separate and distinct contract

Note: Each Occupied Part has separate;


completion and maintenance
LD
insurance
release of Retention Monies

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

Contractual Date for Completion:

Revised Date for Completion

Clause 10(1) provides that

Clause 10(1) provides that the Date for


Completion shall be modified or re-calculated if
the Commencement Date stated in the
Appendix becomes "invalidated" for any reason
which is not the responsibility of the
Contractor.

the Date for Completion shall be calculated


from the Contract Commencement Date and
Contract Period

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

10
Changing the Time for Completion

Revised Date for Completion

3 modes :

Revised Date for Completion - Clause 10(1)

Architect to issue Certificate of Revised


Contract Commencement Date if
requested by contractor.

A shifting of the timeframe to do the works (the


Contract Period) due to Revised Commencement Date

Extension of Time - Clause 23


A longer time within which to complete the Works
(an extension of the Contract Period)

- postpones (shifts-back) the commencement of contract


period, not an extension of the contract period.

Further Extension of Time - Clause 24(3)(a)

- compared with failure of Employer to afford proper


possession of the Site despite the Commencement Date,
which is covered by EOT (See 23(1)(i) with 10(2))

Further time within which to complete the Works


(a period between termination of certified delay and
certified completion or certified further delay)

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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Extending the Contract Period / recalculation


of Date for Completion (EOT)
Clause 23 allows for the Contract Period / Date
for Completion to be extended:
4 KEY REQUIREMENTS:

Clause 23 allows for the Contract Period / Date


for Completion to be extended:
3) Subject to the Contractor giving notice [see Subclause 23(2)].

1) Only if delaying factors are within the grounds set-out


in Sub-clauses 23(1)(a)to(q).
And subject to the matters / events actually
causing delay to the completion of the Works.
2) Subject to due diligence and the taking of all
reasonable steps by the Contractor to avoid or reduce
[the delay in completion].
Lecture 4 - Extension of Time, Delay & Liquidated Damages

4) Subject to the submission by the Contractor of


sufficient explanation, information, particulars or
materials that will enable [the Architect] to estimate
the period of extension of time to be granted within
28 days of the Architect requesting in writing.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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What are the grounds for EOT entitlement?


23(1)(a) : Force Majeure

23(1)(b) : exceptionally adverse weather


conditions

where part of the contract cannot be performed due to


causes that are not within the control of the parties,
such as natural disasters, that could not be avoided
through the exercise of due care.

typically assessed as raindays (days in which


prescribed a rainfall measurement is exceeded) in
excess of the average number of raindays per month.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

15

23(1)(c) : fire, storm, lightning, high winds,


earthquake or aircraft or aerial objects
23(1)(d) : war, hostilities, insurgency,
terrorism, civil commotion, or riots
23(1)(e) : industrial action by workmen, strikes,
lockouts or embargoes

Lecture 4 - Extension of Time, Delay & Liquidated Damages

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23(1)(f) : Architects instructions


but relating to clauses:
1(4)(a) : varying the permanent works
1(4))b) : varying temporary works or methods of
working
1(4)(c) : postponing or suspending work (w/o defect
/ contractor fault)
7(1) : variation required to comply with statutory
requirement
11 (2) : inspection of works covered up or for tests
or investigations
14 : instruction to deal with discrepancy
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

17

23(1)(g) : Architects instructions given in


relation to P.C. or Provisional Sum

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23(1)(i) : failure of the Employer to afford


possession [of Site] to the Contractor

But only where the work constitutes a variation


(change from description of work, materials or goods
in the Contract Documents)

Cl. 10(2) entitles the Contractor to free and


uninterrupted possession of the whole of the area of
the Site on the Contract Commencement Date

23(1)(h) : Architects instructions under Clause


28 in regard to Contingency Sums
ie where the works to be ordered are totally unknown
at the time the Contract is made, thus constitutes a
variation

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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23(1)(j) : the Contractor not having received


from the Architect within a reasonable time
necessary drawings, instructions and other
information
reference Clause 3(2):
the Architect shall supply further or working
drawings, specifications, details, levels,
instructions necessary to amplify and explain in
detail the work to be carried out within a
reasonable time [considering: programme, rate of
progress, extended Date for Completion,
reasonable pre-planning requirements, advance
notice or request]
Lecture 4 - Extension of Time, Delay & Liquidated Damages

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23(1)(k) : acts or omissions [failure to act] of


other contractors engaged by the Employer
23(1)*(l) : shortage of labour
[*optional clause]
23(1)*(m) : shortage of goods and materials
[*optional clause]
Would this provision address the sand ban issue?
Difficulty (or costliness) of procurement vs absolute
non-availability of goods and materials.
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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23(1)(n) : valid suspension of work

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23(1)(o) : grounds under ..

Contractor is entitled to suspend work under Cl. 33(5)


if Architect fails to issue a required Certificate or
statement in writing, and under Cl. 33(6) in
accordance with SOP Act provisions (ie for nonpayment of adjudicated amount)

1(8) : relates to unauthorised orders by Architect


3(3) : damage to Works caused by Employer /
Consultants
7 : variation due to statutory obligation
14 : instruction related to discrepancy
29(3)(a)(ii) : order Contractor into sub-contract despite
valid objection to the sub-contractor nominated
29(3)(b)(ii) : order Contractor into sub-contract despite
valid objection to a term in the Nomination Instruction

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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23(1)(p) : any act of prevention or breach of


contract by the Employer, or any matter in
respect of which the Employer gives the
Contractor an indemnity
A cover-all clause: - consider the previous
notes on granting EOT for prevention
situations (else time may become at large)

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23(1)(q) : any other grounds expressly


mentioned in the Contract Documents
Note: mentions Contract Document rather
than Conditions - hence other grounds for
EOT could be added in supplementary terms.
Eg should / could obtaining TOP be written in
as a ground for EOT ?? (See notes in previous
lecture on Completion / Post-Completion)

Thought: is the Architect's specification of a material

that is known to take 3 months to order/deliver vis


vis a Contract Period of 2 months considered an act
of prevention, or something the Contractor should
pick up while tendering?
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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Remember; Architect only authorised to grant


EOT as provided for in contract

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Note on TOP as criterion for 'completion':


If TOP were written into the Contract as a criterion for
Completion, then the potential for the Statutory
Authorities to delay completion (eg beyond a
stipulated period allowed for TOP application
processing) would need to be expressed as a ground
for EOT.
If not, EOT would not become entitled.
It would also be argued as to whether such delays are
Employer-caused (ie could set time at large) or a
neutral event (hence the Contractors risk).

- especially that EOT is subject to the stipulated


grounds.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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Mitigation of Delay

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Contractor to give Notice (Cl. 23(2):

Subject to due diligence and the taking of all


reasonable steps by the Contractor to avoid or
reduce [the delay in completion].
Sdimilar in nature to Cl. 21 requiring that the
Contractor shall proceed with the Works diligently and
with due expedition at all times until completion.
What are reasonable steps? Does this involve cost to
the Contractor? Eg can an Employer expect
acceleration in the progress of works, or just
maintaining of the rate of progress of works?

Lecture 4 - Extension of Time, Delay & Liquidated Damages

A condition precedent to EOT is that the


Contractor is to give notice within 28 days
(unless Architect has already expressed
willingness to grant EOT)
The Architect is not authorised to grant EOT if this
requirement is not met.
[Also note that Cl. 37(3)(f) does not allow an
Arbitrator to disregard or substitute with his own
decision a decision of the Architect on EOT if the
Contractor had failed to give notice in compliance
with 23(2)]
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

29

The Notice is only required to;

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28 days to give 'notice' is from the date the event /


matter is known - not necessarily the date it finishes.

Notify the Architect of any event or direction or


instruction that the Contractor considers will
entitle an EOT,

[eg this gives the Employer opportunity to change /


retract an instruction, or to order acceleration of the
Works progress to avoid the delay

Give explanation as to why delay to completion


will result

eg to meet an important key date for completion


(eg fixed date for ceremony or to committed date
for commence of business, or to start a school
term, etc)
to avoid claims by Contractor under general law for
prolongation costs (if EOT is granted)]

[it does not need to give information/particulars,


nor justification for EOT, nor estimate the duration
of delay].

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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Request for Information and Architects
Decision on EOT

Within 1 month of a request by Contractor (specifically


mentioning Cl 23(2)) the Architect shall inform the
Contractor whether the matter described in the Notice
entitles the Contractor in principle to an EOT,
Typically, this should firstly include a verification
that the matter is under the stipulated grounds for
EOT.

Firstly, the duty of the Architect:


Clause 23(3) : After any delaying factor ... has
ceased to operate and it is possible to decide
the length of period of extension ... the
Architect shall determine such period of
extension ... and notify the Contractor in
writing ...

[ie, to let the Contractor know how he should


schedule for the remaining works, so he can
complete on time - he must know the target!]

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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How to assess EOT?


Generally accepted in law that the EOT is a
reasonable estimate (not an exact science),
but;
Generally required by law that the process of
estimating the quantum of EOT shall be
reasoned and methodological - not
impressionistic.

ie the decision on actual length of period of EOT is


only once the delaying factor has ceased to operate.
the Architect shall determine such period of
extension - ie the Architects duty, and not subject
to a claim by the Contractor (although Contractor
may be required to submit explanations, information,
etc).
The Architect may notify the Contractor on the
decision on EOT at any time up to and including the
issue of the Final Certificate
this correlates to the issuance of Delay Certificate
- consider 24(1) as EOT matters can affect
issuance of Delay Certificate and therefore has
effect in LD recovery.
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

35

Different theories exist for


determining/assessing EOT, but SIA does not
stipulate or recommend any particular
approach / method.
eg see the SCL UK's protocol for delay.

Most theories and approaches involve analysis


of programmes and critical path networks

Lecture 4 - Extension of Time, Delay & Liquidated Damages

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What is critical path?


Where a delay in one task has a consequential
and unavaoidable knock-on effect to
subsequent tasks such that the overall
completion is delayed.
Eg: Piling - Sub-structure - Superstructure Building Envelope - Internal Works -completion.

As distinct to tasks that are carried out


concurrently or simultaneously to work tasks
on the critical path.
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

37

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In law, the Architect is required to act


impartially when estimating EOT, and
shall not be influenced by either party.

In law, the Architect is required to act


impartially when estimating EOT, and shall
not be influenced by either party.
(else the EOT decision / Delay Certificate may
be ruled to be invalid, and possibly time would
be at large, so LD cannot be applied).
The Architect must act impartially and fairly
and no longer as the agent of the Employer for
purposes of estimating EOT - as EOT can lead
to recovery of LD.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Also note the Architects Rules 1991 -The Schedule (Code of


Professional Conduct and Ethics)
(Act 22 of 1991, Section 38, The Schedule)
- Part I, Rule 3 - Conditions of a contract
3.- (1) An architect shall at all times apply the conditions of a
contract with entire fairness between his client and any
contractor concerned, and in any questions arising between his
client and the contractor in which the architect is acting
between the parties by reason of his professional expertise, he
shall act in an impartial manner.
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

39

In order to fulfil his duty to decide on EOT:


Clause 23(4): The Architect may in writing
request the Contractor for sufficient
explanation, information, particulars or
materials that will enable [the Architect] to
estimate the period of extension of time to be
granted...
within 28 days of the Architect requesting in writing

Lecture 4 - Extension of Time, Delay & Liquidated Damages

40

The Conditions state: The Architect shall not be


required to decide and estimate the EOT unless
in receipt of the sufficient information etc
requested.
[BUT : be careful in establishing what is
sufficient - general expectation of the Courts is
for the Architect to do the best possible with the
information available - not to take an easy way
out!]

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

41
Delay (Cl. 24(1)

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Liquidated Damages (Cl. 24(2)
Upon a Delay Certificate, Employer shall be
entitled to recover LD

The Contractor is in default if


After latest date for completion (ie revised or
extended date)
No other matters entitling EOT
Works nonetheless incomplete

at the rate stated in the Appendix


at Employers discretion whether to deduct

Note: LD is a pre-determined quantum of


damages that may apply if Contractor
breaches contract (ie fails to meet complete
contractual obligation to complete on time)

then Architect may issue a Delay Certificate


at any time up to and including the Final Certificate
(if was as soon as possible then any error in
certificate would invalidate the Delay Certificate thus time would become 'at large' and any
entitlement to LD would be lost)

An estimate of realistic / reasonable losses if the


Works are delayed - need not be proven in detail.
Not a penalty (ie not to be unreasonably excessive).

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

43

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Termination of Delay (Cl. 24(3)

Further Delay Certificate

Termination of Delay Certificate is issued


where a matter that would entitle the
Contractor to EOT (regardless of the
Contractors own delay*) occurs during period
of delay

Upon a Further Delay Certificate, Employer


shall be entitled to recommence accruement &
recovery of LD

*(The principles of the concurrent delay doctrine require that


neither party can recover damages from the other while at fault
himself
hence; the Employer cannot profit from liquidated damages
during a period of the Contractors culpable delay if the
Employer has also prevented completion).

Stops the continuation of accruement of LD


Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

45

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Completion Certificate
the liability of the Contractor to pay LD shall
cease upon the issue of the Completion
Certificate.

OTHER CONSIDERATIONS REGARDING TIME FOR


COMPLETION AND DELAYS .

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

47
Delays and
Changing the Time for Completion

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Issues of NEUTRAL EVENT Delay:

Considerations:

EOT provisions in contract relieve the Contractor of


otherwise being allocated the risk of delays due to
neutral events

NEUTRAL EVENT Delay


those events not caused by the act or omission of a
party, ie beyond the parties control

EMPLOYER-caused Delay
CONTRACTOR default Delay

Lecture 4 - Extension of Time, Delay & Liquidated Damages

considering that the Courts will generally enforce the


contract on its terms as agreed to by the parties
(irrespective of commercial fairness),
ie the Contractor would otherwise still be obliged to
complete the Works by the Contractual Date for
Completion, irrespective of hardships caused by Neutral
Events
hence EOT affects the commercial bargaining /
negotiations, and contract price (ie risk = $)
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

49

50

What would happen if there was no EOT


provision in the Contract?
- for Neutral Events:

EOT is a contractual provision to allow the Contract Period


to be shifted and extended

Further note on 'frustration' of Contract:


Compare with Cl. 1(3)(c) where the Architect may issue a
Direction (ie w/o cost increase) "to assist [the Contractor]
in overcoming difficulties or in avoiding excessive costs
during construction"

else even in the case of delays due to neutral


events (eg Force Majeure) the Contractors
obligation would still be to strictly comply with
the Contract Period and Date for Completion

ie 'Difficulties' is NOT a basis for compensation / additional


payment nor a ground for EOT (ie risks assumed by the
Contractor).

Note: Very difficult to achieve frustration or impossibility of a contract


where a contract may be set aside due to an unforeseen event, that could
not have been induced by the parties, making it impossible for the principal
purpose or the performance of obligations to be accomplished.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

51

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Issues of EMPLOYER-caused Delay:

Issues of EMPLOYER-caused Delay:

EOT is to avoid the effects of Prevention

Prevention can cause the Date for Completion to fall


away / become undefined (hence time becomes at large)

ie delays caused by Employer through preventing /


hindering the Contractors performance of obligations
under the contract*
*Acts of Prevention (such as late decisions and information, or late
possession of Site) can include acts of the parties under the
Employers control, eg the Architect as agent of the Employer
who administers the contract

Lecture 4 - Extension of Time, Delay & Liquidated Damages

When time is at large:


(a)the Date for Completion can no longer be applied, so
the Contractor only needs to complete the Works
within a reasonable time
(b)therefore LD provisions cannot be applied as there is
no defined starting date of delay default
(c)so the Employer would only be entitled to general
damages (if Works are not completed within a
reasonable time)

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

What would happen if there was no EOT


provision in the Contract?

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- for Employer Delays:

- for Employer Delays:

time at large is often argued by Contractors


lawyers (eg where there is claimed error in
Architects certificates, so the revised date for
completion is not clear) ie so Employers
entitlement to liquidated damages, if any, is
gone.

Lian Soon Construction Pte Ltd v Guan Qian Realty


Pte Ltd (No 2)[2000] 1 SLR 495; [1999] SGHC 259
18
... where there is any prevention by the
employer of the contractors performance of the
contract and the contract does not provide for
extension [of time], or if it so provides but
extension is improperly withheld, the contractual
date for completion will cease to apply, and the
employers entitlement to liquidated damages, if
any, is gone; his remedy for the contractors
delayed performance, if any, is confined to general
damages, which in most cases would be more
difficult to prove than are liquidated damages.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

55
- for Employer Delays:

56
- for Employer Delays:

Typically time at large - a situation where there is no


longer a defined date for completion - is due to:
1. No fixed date [but not usual in SIA form due to
Appendix]
2. Date ceases to apply due to;
(i) act of prevention by Employer (where
(a)there is no provision to regularise the
prevention with an EOT, or
(b) EOT is improperly withheld
(ii) breach of contract by Employer
3. Employer waives obligation for completion
4. Interference by Employer in certification
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Prevention principle is that the Employer cannot


insist upon the performance of an obligation which he
has prevented the promisor from performing.
Prevention Breach of Contract*
(eg affording late possession of Site), or
Ligitimate conduct
(eg ordering variations in accordance with rights
under the contract)
*eg Cl. 31(14) notes "breach of contract such as for late provision
of necessary information or or failure to give undisturbed
possession of the Site" as grounds for EOT under 23(1)(i)&(j).
Also note Cl. 23(1)(p): "EOT for "any acts of prevention or breach of
Contract by the Employer " as a general ground for EOT.
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

57
- for Employer Delays:

58
- for Employer Delays:

When time is at large, it is a usually an implied term


that the Contractor is to complete within a
reasonable time (usually determined retrospectively
based on the facts).

When time is at large, the Employers remedy for the


contractors delayed performance, if any, is confined
to general damages, (no longer liquidated damages)
which in most cases would be more difficult to prove
(and take more time and expense) than for liquidated
damages.

Where contract allows for EOT, the Date for


Completion is reset / revised - so a clear and defined
date for completion still exists - to preserve the
Employers right to LD for breach of obligation to
complete on time.
If no EOT clause then a new contract is required to
set a new date for completion, or time becomes at
large if the existing contract is to be pursued.
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

59
- for Employer Delays:

- for Employer Delays:

Note that if EOT cannot be issued ...

60

Notes on Notice:

eg no EOT provision in contract


eg EOT is subject to a condition precedent of the Contractor
giving 'notice' of a delaying event

...then situations of 'prevention' cannot be dealt with


under the contract, hence prevention would cause
time to become at large.
A contract should therefore always allow for the
granting of EOT, and irrespective of whether such
'notice' is submitted
The SIA's form of contract does allow for the
Architect to indicate a 'willingness' to grant EOT in
lieu of requiring the 'notice (See 23(2)).

Lecture 4 - Extension of Time, Delay & Liquidated Damages

In fact, some jurisdictions have found that a pre-condition


Notice of delay can work against the Employer where failure
to meet the pre-condition and the denying of entitlement to
EOT renders as ineffective the EOT provision (as if it didnt
exist), hence time can become at large.
Hence, in the provisions of contract, the EOT should be
grantable by the Employer / Contract Administrator
irrespective of any Notice of delay or claim for EOT by the
Contractor, else without EOT (in a case of Employers
prevention) the time for completion becomes at large.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

61
- for Employer Delays:

62
- for Employer Delays:

Also Note that EOT may not be desirable if


finishing on time is very important to the
Employer;

Notes on Notice:

Also, the Courts have found in some jurisdictions and cases


that a result of no EOT being entitled because of a failure to
comply with a procedural pre-condition to submit a Notice
of delay should not be a basis for the Employer being entitled
to LD !
The Courts sentiment is that it would be unmeritorious for an
Employer to get LD where the delays were of his own
making. This is in line with the well-established principle of
law that a party cannot benefit from the non-performance
that has been hindered by him.

(eg to commence business on time - to meet a key


date, eg supermarkets opening in time for CNY)
Not to be confused with time being of the
essence which relates to the essence /
fundamental basis of the contract, for which
EOT is not applicable - ie the performance of
the Contract is useless if not done on time.

[This does not mean that the Architect can or should ignore any
failure of Contractor to comply with a procedural pre-condition to
submit a Notice of delay but should be of general awareness of the
position the Court / Arbitrator make take]

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

63

64
Commencement Date:

- for Employer Delays:

Also note that in some cases, Contractors pursue


loss of profit or other expenses caused by
prolongation of the project!
(eg lost opportunity on other jobs) - so the Employer is
sued for prolongation costs / losses resulting from
EOT granted to deal with prevention / delays caused by
the Employer - even though EOT was granted in
accordance with the terms of Contract.

Typically:
Particular Date stated in the Tender
Documents, or
By formula set-out in the Tender Documents
and LOA
eg, particular date, or issuance of Permit, whichever
later type of clause.

(See Cl.12(6) which states that Loss of profit on omitted work or on


other business or contracts by reason of prolongation of the contract
period shall be recoverable only in accordance with the general law
where the Employer is in breach of contract) noting that some
grounds for EOT are still 'breaches of contract' eg Cl. 23(1)(i),(j),(p).
Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

65

66

Mobilisation Period:

Mobilisation Period:

Not contractual provision, but common in practice.


Period for Contractor to arrange the following, as
necessary before physical works can be allowed to
commence:
Permit to carry out structural works
MOM worksite registration
Insurances (and Performance Bond, if applicable)
Set-up the Site
Typically a period allowed before Contractual
Commencement Date takes effect, as this exercise is
not entirely within the Contractors control.
Some projects will consider / allow some time for
mobilisation-type activities, but contained within the
Contract Period.

Note on Programme and Make-up of Prices:


A period for mobilisation also correlates to contractual
provisions:
Clause 4(1) and 5(3) respectively require that the Contractor
will not be permitted to commence work until 14 days
after submission of;
a sufficiently detailed programme
a sufficient breakdown of prices
This is notwithstanding the passing of the stipulated
Contract Commencement Date, and no extension of time
shall be given in respect of any delay so caused.

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Lecture 4 - Extension of Time, Delay & Liquidated Damages

Darren Benger

Darren Benger

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

67
Note: Effect of Architects Certificates
Notes on Temporary (Provisional) Finality:
Clause 31(13) and 37(3)(h) expressly provide in contract
that Architects Certificates :
shall have status of temporary finality ie full effect
by way of Summary Judgment or Interim Award shall
be given to all decisions and certificates of the
Architect
ie the Architects Certificates shall not be final and
binding before an arbitrator or the Courts; The Courts
and/or Arbitrator are not bound by an Architects
Certificates or decisions, including payment, EOT and
Delay Certificates
Lecture 4 - Extension of Time, Delay & Liquidated Damages
Darren Benger
AR5422 - Architectural Practice 2 [Semester 2] - Dept of Architecture - School of Design & Environment

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