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Are delays on a construction site excusable or inexcusable?

by | Jul 21, 2020 | Construction Law, Contract Interpretation

Construction projects often rely on contractors, subcontractors, material suppliers, architects, clients and many other parties to work together to deliver the project on time, on budget and within client specifications. Construction delays from disrupted supply lines or incomplete work from subcontractors can leave contractors vulnerable to breach of contract lawsuits from unhappy clients.

Whether the contractor is liable for the delay depends on the situation, and generally involves one question: is the delay excusable or inexcusable?

Does the court consider the delay excusable?

Depending on the terms of a contract, the delay could be considered excusable. For example, some delays may only impact one aspect of the project, and other aspects of the project can continue while the contractor resolves that delay. Other delays can result from a situation beyond the contractor’s control, like abnormal weather conditions or a government order that prevents the project from continuing.

If a delay is excusable, it will generally fall into one of two categories:

  • Non-compensable delays—If a delay is non-compensable, contractors may receive a time extension to complete the project. Typically, these delays could not have been foreseen and are not the contractor’s fault or the fault of their client.
  • Compensable delays—For some delays, contractors might receive damages to address extra costs created by the delay in addition to a time extension. Often, these delays are the result of another party’s fault or negligence.

Some contracts contain terms that define which delays are compensable and non-compensable, and it can be important for contractors to review these terms before taking on a project.

When might the court consider a delay inexcusable?

An inexcusable or non-excusable delay involves a delay caused by a contractor. If a contractor does not start the project in a timely fashion or if they halted work without reason, for example, they would likely be responsible for the delay. However, if a subcontractor left the project without completing their work or if a supplier did not provide materials in a timely fashion, an owner could regard the delay as inexcusable because it is the contractor’s responsibility to get the project back on track.

Resolving a dispute often requires careful legal strategy. If contractors experience construction delays, it can be essential to speak to an attorney about these issues and whether their clients could view them as inexcusable given the terms of the contract.