Extension Of Time In Construction
Construction projects, enormous scale ones, are difficult to complete and require very detailed construction contracts. Such projects are complex processes with many components involved wherein there are multiple stakeholders to account for. In some cases, project delays may occur due to force majeure or other circumstances. When this happens, there will be an appeal for an extension of time to complete the project.
What extension of time (EOT) in construction
In construction, an extension of time or EOT is a mechanism that protects the contractors and the client from liquidated damages that could incur due to unanticipated delays at the time of contract signing. These delays could originate from adverse weather conditions, delay in the procurement of materials, pandemics (like COVID19), or changes in client requests.
A construction contract usually contains an EOT clause providing an extension should the delay not be the contractor’s fault.
The extension of the time clause is a critical section of the contract that relieves the contractor from liabilities such as liquidated damages from the agreed-upon completion date to the claim period. The contractor may request a time extension where the initial contract documentation changed under the following circumstances:
What is an extension of time claim?
To claim an extension of time, the contractor must show a reasonable and apparent need for the extension. The contractor is then required to provide a written statement or notice to the contract administrator, giving the reason why there are delays. Should the contract administrator see the reasons acceptable and caused by relevant events, the time extension is claimable and the completion date adjusted accordingly.
Mechanisms that allow for an EOT in construction projects are for the contractor and the client’s benefit. Should a delay occur that was not the contractor’s fault, they would no longer be required to complete the work by the agreed-upon date. Instead, they would only have to complete the project within a reasonable time. In this case, the client loses any right to liquidated damages.
How to calculate extension of time in construction
Calculating the EOT means taking into account the planned resources required to carry out the newly defined work scope. The planned productivity rates will aid in determining the man-hours needed for each activity during this process. Doing so will correctly calculate the number of resources required based on the following equation:
Man-hours needed = Budget Allotment x Productivity Rate
The number of resources per month is equal to the man-hours needed, and each worker is totalled to work 260 hours per month at 10 hours per day for 26 days.
Depending on the project’s scale and the reasons behind the delay, calculating how much time the extension will have to consider all the current and possible circumstances from that point onwards. Moreover, workers’ ratio to the amount of work that needs completing will also need consideration.
How to request an extension of time in construction
It is necessary to take specific measures to ensure that the request for an extension of time has a higher chance of approval. Careful measurements need to be taken at every stage in terms of documentation. Such documentation should clearly state the circumstances surrounding the delay.
An EOT report should be considered a proposal with legal implications. The contractor needs to thoroughly review the original contract to ensure that a claim of EOT is eligible based on the stipulations agreed upon during the commencement of the project. If so, the EOT can be drafted and should include the following sections:
Executive Summary: Outline the activities completed thus far and introduce the cause for the delay.
Background: Provide insight as to the present condition of the project.
Contract Agreement: Highlight the agreed-upon terms and conditions upon contract signing
Parties Involved: List down all stakeholders, contractors, and subcontractors, stipulating their roles and responsibilities in the project.
Contract Provision: Reiterate the actions taken to ensure timely completion of the project.
Liquidated Damages: Outline the expected cost incurred due to the delay.
Rationale For Extension of Time Claim: Describe in detail the reasons for an EOT request, including the conditions which caused the delay
Contractors Claims: Compile the compensation for damages requested. (Applicable only if other parties are the reason for failure to complete the project on time)
Notification of Delay: Emphasize the need for an EOT to accomplish project completion.
Analysis of Delay: The project’s path up until the delay point and any actions taken to mitigate the delay from affecting completion.
Proposed Solution: The project’s proposed plan moving forward. This includes actions for timely delivery of milestones and the contractor’s list of activities moving forward.
Adjusted Project Schedule and Completion: Stipulates the exact amount of time requested for completion, including the productivity breakdown.
The EOT submitted to the contract administrator should be concise, clear, and accurate. Describe the delay event fully and what caused it in the first place. Everything in the report should be supported and referenced by project records.
What is an extension of time addendum for Construction Contracts?
An EOT addendum to construction contracts is made when both parties agree to alter terms or language of the original or existing agreement in terms of the closing date of the purchase. Since it can be very time consuming to re-write a legal document to change only one aspect, such as the date of closing, an addendum is added as a short note at the end of the contract to clarify specific clauses or terms of sale.
In the unlikely event that the client changes the construction project’s closing for legitimate reasons, an EOT addendum can provide the client with more time to pay the contractor for the work completed. Additionally, a concession can be an indication of good faith. For example, the employer can offer earnest money to the contractor to ensure they will receive the full amount due on the EOT addendum date.
Once both parties have agreed to a new closing date, an attorney should draft an addendum outlining the following:
Both parties should sign and date the contract with two witnesses present for verification purposes.
Are You Entitled To Claim A Time Extension?
A request for an EOT can be considered valid under several circumstances. Keep in mind that not every delay is acceptable as reasons for an EOT. To correctly state your case, it is best to keep accurate and detailed records of all the operations and processes that occur. Document any challenges that arise and keep careful records of communications and schedules. Some examples of relevant events for delay include:
What is a motion for extension of time?
Should the employer refuse to acknowledge the contractor’s EOT request despite apparent evidence that they are not at fault for the delay, a motion to the court can be filed by the contractor to dispute the respective contract clauses. In this situation, both parties will present their case to the court based on their perspectives on the delay itself. Should the contractor win the appeal, the client will have to compensate for any liquidated damages and loss the contractor incurred due to said delays.
Extension of time to appeal
Concerning the previous section, the appellant to an EOT is the contractor who files the appeal to dispute the contract clauses in question. In terms of EOT in construction, the parties involved can dispute the contract to determine who will be liable to pay for any loss or damages caused by the disputed delays.
As an example, the John Barker Construction Ltd v London Portman Hotel Ltd emphasises just how important it is that the contract administrator prepares an extensive analysis of the delay to properly determine the viability and entitlements of the extension of time (EOT)
Extension of time and related costs in construction
The overall expenses incurred during a project can vary widely depending on the requirements of the employer. Many projects will have expenses that are impossible to account for during the awarding of the construction contract. In such cases, the agreement should allow for the sum to be adjusted. For example, variation in work, claims for losses and expenses or market changes (for long term projects that span several years) may occur and need to be considered.
For this reason, contractors advise their employers and clients to have a contingency clause covered in case something goes wrong during the delivery or completion of the project. From that, the actual costs of a project should become clear. Nevertheless, this is just a close estimation of the final cost rather than a definitive figure. Such situations hold true even for those labelled as having a guaranteed maximum price or fixed price.
A Final Note
An extension of time in the event of relevant reasons for a delay must be raised with the employer immediately upon occurrence. Identifying any deviation from the contract’s stipulations is paramount to keeping it under control and maintaining the critical path. Through proper project management and consistent communication, contractors can maintain control over projects and eliminate the need for an extension of time as much as possible.
Extension Of Time In Construction
Construction projects, enormous scale ones, are difficult to complete and require very detailed construction contracts. Such projects are complex processes with many components involved wherein there are multiple stakeholders to account for. In some cases, project delays may occur due to force majeure or other circumstances. When this happens, there will be an appeal for an extension of time to complete the project.
What extension of time (EOT) in construction
In construction, an extension of time or EOT is a mechanism that protects the contractors and the client from liquidated damages that could incur due to unanticipated delays at the time of contract signing. These delays could originate from adverse weather conditions, delay in the procurement of materials, pandemics (like COVID19), or changes in client requests.
A construction contract usually contains an EOT clause providing an extension should the delay not be the contractor’s fault.
The extension of the time clause is a critical section of the contract that relieves the contractor from liabilities such as liquidated damages from the agreed-upon completion date to the claim period. The contractor may request a time extension where the initial contract documentation changed under the following circumstances:
What is an extension of time claim?
To claim an extension of time, the contractor must show a reasonable and apparent need for the extension. The contractor is then required to provide a written statement or notice to the contract administrator, giving the reason why there are delays. Should the contract administrator see the reasons acceptable and caused by relevant events, the time extension is claimable and the completion date adjusted accordingly.
Mechanisms that allow for an EOT in construction projects are for the contractor and the client’s benefit. Should a delay occur that was not the contractor’s fault, they would no longer be required to complete the work by the agreed-upon date. Instead, they would only have to complete the project within a reasonable time. In this case, the client loses any right to liquidated damages.
How to calculate extension of time in construction
Calculating the EOT means taking into account the planned resources required to carry out the newly defined work scope. The planned productivity rates will aid in determining the man-hours needed for each activity during this process. Doing so will correctly calculate the number of resources required based on the following equation:
Man-hours needed = Budget Allotment x Productivity Rate
The number of resources per month is equal to the man-hours needed, and each worker is totalled to work 260 hours per month at 10 hours per day for 26 days.
Depending on the project’s scale and the reasons behind the delay, calculating how much time the extension will have to consider all the current and possible circumstances from that point onwards. Moreover, workers’ ratio to the amount of work that needs completing will also need consideration.
How to request an extension of time in construction
It is necessary to take specific measures to ensure that the request for an extension of time has a higher chance of approval. Careful measurements need to be taken at every stage in terms of documentation. Such documentation should clearly state the circumstances surrounding the delay.
An EOT report should be considered a proposal with legal implications. The contractor needs to thoroughly review the original contract to ensure that a claim of EOT is eligible based on the stipulations agreed upon during the commencement of the project. If so, the EOT can be drafted and should include the following sections:
Executive Summary: Outline the activities completed thus far and introduce the cause for the delay.
Background: Provide insight as to the present condition of the project.
Contract Agreement: Highlight the agreed-upon terms and conditions upon contract signing
Parties Involved: List down all stakeholders, contractors, and subcontractors, stipulating their roles and responsibilities in the project.
Contract Provision: Reiterate the actions taken to ensure timely completion of the project.
Liquidated Damages: Outline the expected cost incurred due to the delay.
Rationale For Extension of Time Claim: Describe in detail the reasons for an EOT request, including the conditions which caused the delay
Contractors Claims: Compile the compensation for damages requested. (Applicable only if other parties are the reason for failure to complete the project on time)
Notification of Delay: Emphasize the need for an EOT to accomplish project completion.
Analysis of Delay: The project’s path up until the delay point and any actions taken to mitigate the delay from affecting completion.
Proposed Solution: The project’s proposed plan moving forward. This includes actions for timely delivery of milestones and the contractor’s list of activities moving forward.
Adjusted Project Schedule and Completion: Stipulates the exact amount of time requested for completion, including the productivity breakdown.
The EOT submitted to the contract administrator should be concise, clear, and accurate. Describe the delay event fully and what caused it in the first place. Everything in the report should be supported and referenced by project records.
What is an extension of time addendum for Construction Contracts?
An EOT addendum to construction contracts is made when both parties agree to alter terms or language of the original or existing agreement in terms of the closing date of the purchase. Since it can be very time consuming to re-write a legal document to change only one aspect, such as the date of closing, an addendum is added as a short note at the end of the contract to clarify specific clauses or terms of sale.
In the unlikely event that the client changes the construction project’s closing for legitimate reasons, an EOT addendum can provide the client with more time to pay the contractor for the work completed. Additionally, a concession can be an indication of good faith. For example, the employer can offer earnest money to the contractor to ensure they will receive the full amount due on the EOT addendum date.
Once both parties have agreed to a new closing date, an attorney should draft an addendum outlining the following:
Both parties should sign and date the contract with two witnesses present for verification purposes.
Are You Entitled To Claim A Time Extension?
A request for an EOT can be considered valid under several circumstances. Keep in mind that not every delay is acceptable as reasons for an EOT. To correctly state your case, it is best to keep accurate and detailed records of all the operations and processes that occur. Document any challenges that arise and keep careful records of communications and schedules. Some examples of relevant events for delay include:
What is a motion for extension of time?
Should the employer refuse to acknowledge the contractor’s EOT request despite apparent evidence that they are not at fault for the delay, a motion to the court can be filed by the contractor to dispute the respective contract clauses. In this situation, both parties will present their case to the court based on their perspectives on the delay itself. Should the contractor win the appeal, the client will have to compensate for any liquidated damages and loss the contractor incurred due to said delays.
Extension of time to appeal
Concerning the previous section, the appellant to an EOT is the contractor who files the appeal to dispute the contract clauses in question. In terms of EOT in construction, the parties involved can dispute the contract to determine who will be liable to pay for any loss or damages caused by the disputed delays.
As an example, the John Barker Construction Ltd v London Portman Hotel Ltd emphasises just how important it is that the contract administrator prepares an extensive analysis of the delay to properly determine the viability and entitlements of the extension of time (EOT)
Extension of time and related costs in construction
The overall expenses incurred during a project can vary widely depending on the requirements of the employer. Many projects will have expenses that are impossible to account for during the awarding of the construction contract. In such cases, the agreement should allow for the sum to be adjusted. For example, variation in work, claims for losses and expenses or market changes (for long term projects that span several years) may occur and need to be considered.
For this reason, contractors advise their employers and clients to have a contingency clause covered in case something goes wrong during the delivery or completion of the project. From that, the actual costs of a project should become clear. Nevertheless, this is just a close estimation of the final cost rather than a definitive figure. Such situations hold true even for those labelled as having a guaranteed maximum price or fixed price.
A Final Note
An extension of time in the event of relevant reasons for a delay must be raised with the employer immediately upon occurrence. Identifying any deviation from the contract’s stipulations is paramount to keeping it under control and maintaining the critical path. Through proper project management and consistent communication, contractors can maintain control over projects and eliminate the need for an extension of time as much as possible.
Extension Of Time In Construction
Construction projects, enormous scale ones, are difficult to complete and require very detailed construction contracts. Such projects are complex processes with many components involved wherein there are multiple stakeholders to account for. In some cases, project delays may occur due to force majeure or other circumstances. When this happens, there will be an appeal for an extension of time to complete the project.
What extension of time (EOT) in construction
In construction, an extension of time or EOT is a mechanism that protects the contractors and the client from liquidated damages that could incur due to unanticipated delays at the time of contract signing. These delays could originate from adverse weather conditions, delay in the procurement of materials, pandemics (like COVID19), or changes in client requests.
A construction contract usually contains an EOT clause providing an extension should the delay not be the contractor’s fault.
The extension of the time clause is a critical section of the contract that relieves the contractor from liabilities such as liquidated damages from the agreed-upon completion date to the claim period. The contractor may request a time extension where the initial contract documentation changed under the following circumstances:
What is an extension of time claim?
To claim an extension of time, the contractor must show a reasonable and apparent need for the extension. The contractor is then required to provide a written statement or notice to the contract administrator, giving the reason why there are delays. Should the contract administrator see the reasons acceptable and caused by relevant events, the time extension is claimable and the completion date adjusted accordingly.
Mechanisms that allow for an EOT in construction projects are for the contractor and the client’s benefit. Should a delay occur that was not the contractor’s fault, they would no longer be required to complete the work by the agreed-upon date. Instead, they would only have to complete the project within a reasonable time. In this case, the client loses any right to liquidated damages.
How to calculate extension of time in construction
Calculating the EOT means taking into account the planned resources required to carry out the newly defined work scope. The planned productivity rates will aid in determining the man-hours needed for each activity during this process. Doing so will correctly calculate the number of resources required based on the following equation:
Man-hours needed = Budget Allotment x Productivity Rate
The number of resources per month is equal to the man-hours needed, and each worker is totalled to work 260 hours per month at 10 hours per day for 26 days.
Depending on the project’s scale and the reasons behind the delay, calculating how much time the extension will have to consider all the current and possible circumstances from that point onwards. Moreover, workers’ ratio to the amount of work that needs completing will also need consideration.
How to request an extension of time in construction
It is necessary to take specific measures to ensure that the request for an extension of time has a higher chance of approval. Careful measurements need to be taken at every stage in terms of documentation. Such documentation should clearly state the circumstances surrounding the delay.
An EOT report should be considered a proposal with legal implications. The contractor needs to thoroughly review the original contract to ensure that a claim of EOT is eligible based on the stipulations agreed upon during the commencement of the project. If so, the EOT can be drafted and should include the following sections:
Executive Summary: Outline the activities completed thus far and introduce the cause for the delay.
Background: Provide insight as to the present condition of the project.
Contract Agreement: Highlight the agreed-upon terms and conditions upon contract signing
Parties Involved: List down all stakeholders, contractors, and subcontractors, stipulating their roles and responsibilities in the project.
Contract Provision: Reiterate the actions taken to ensure timely completion of the project.
Liquidated Damages: Outline the expected cost incurred due to the delay.
Rationale For Extension of Time Claim: Describe in detail the reasons for an EOT request, including the conditions which caused the delay
Contractors Claims: Compile the compensation for damages requested. (Applicable only if other parties are the reason for failure to complete the project on time)
Notification of Delay: Emphasize the need for an EOT to accomplish project completion.
Analysis of Delay: The project’s path up until the delay point and any actions taken to mitigate the delay from affecting completion.
Proposed Solution: The project’s proposed plan moving forward. This includes actions for timely delivery of milestones and the contractor’s list of activities moving forward.
Adjusted Project Schedule and Completion: Stipulates the exact amount of time requested for completion, including the productivity breakdown.
The EOT submitted to the contract administrator should be concise, clear, and accurate. Describe the delay event fully and what caused it in the first place. Everything in the report should be supported and referenced by project records.
What is an extension of time addendum for Construction Contracts?
An EOT addendum to construction contracts is made when both parties agree to alter terms or language of the original or existing agreement in terms of the closing date of the purchase. Since it can be very time consuming to re-write a legal document to change only one aspect, such as the date of closing, an addendum is added as a short note at the end of the contract to clarify specific clauses or terms of sale.
In the unlikely event that the client changes the construction project’s closing for legitimate reasons, an EOT addendum can provide the client with more time to pay the contractor for the work completed. Additionally, a concession can be an indication of good faith. For example, the employer can offer earnest money to the contractor to ensure they will receive the full amount due on the EOT addendum date.
Once both parties have agreed to a new closing date, an attorney should draft an addendum outlining the following:
Both parties should sign and date the contract with two witnesses present for verification purposes.
Are You Entitled To Claim A Time Extension?
A request for an EOT can be considered valid under several circumstances. Keep in mind that not every delay is acceptable as reasons for an EOT. To correctly state your case, it is best to keep accurate and detailed records of all the operations and processes that occur. Document any challenges that arise and keep careful records of communications and schedules. Some examples of relevant events for delay include:
What is a motion for extension of time?
Should the employer refuse to acknowledge the contractor’s EOT request despite apparent evidence that they are not at fault for the delay, a motion to the court can be filed by the contractor to dispute the respective contract clauses. In this situation, both parties will present their case to the court based on their perspectives on the delay itself. Should the contractor win the appeal, the client will have to compensate for any liquidated damages and loss the contractor incurred due to said delays.
Extension of time to appeal
Concerning the previous section, the appellant to an EOT is the contractor who files the appeal to dispute the contract clauses in question. In terms of EOT in construction, the parties involved can dispute the contract to determine who will be liable to pay for any loss or damages caused by the disputed delays.
As an example, the John Barker Construction Ltd v London Portman Hotel Ltd emphasises just how important it is that the contract administrator prepares an extensive analysis of the delay to properly determine the viability and entitlements of the extension of time (EOT)
Extension of time and related costs in construction
The overall expenses incurred during a project can vary widely depending on the requirements of the employer. Many projects will have expenses that are impossible to account for during the awarding of the construction contract. In such cases, the agreement should allow for the sum to be adjusted. For example, variation in work, claims for losses and expenses or market changes (for long term projects that span several years) may occur and need to be considered.
For this reason, contractors advise their employers and clients to have a contingency clause covered in case something goes wrong during the delivery or completion of the project. From that, the actual costs of a project should become clear. Nevertheless, this is just a close estimation of the final cost rather than a definitive figure. Such situations hold true even for those labelled as having a guaranteed maximum price or fixed price.
A Final Note
An extension of time in the event of relevant reasons for a delay must be raised with the employer immediately upon occurrence. Identifying any deviation from the contract’s stipulations is paramount to keeping it under control and maintaining the critical path. Through proper project management and consistent communication, contractors can maintain control over projects and eliminate the need for an extension of time as much as possible.
