Time for Completion and Extension of Time in Construction Contracts
Introduction
Construction contracts are critical in defining the obligations and expectations of the parties involved. One of the fundamental aspects covered in these agreements is the time frame for project completion. This article delves into the nuances of time for completion, extensions of time (EOT), and the repercussions of failing to meet the stipulated deadlines under Cyprus law.
Time for Completion
In most construction contracts, there is an explicit provision detailing the completion date of the works. This date might be specified directly in the contract particulars or might be determined based on a set period following the commencement of work on-site. A comprehensive programme of works, often required by the contract, outlines the anticipated progress of the project up to its completion.
Extensions of Time (EOT)
Contractual Provisions for EOT: Standard construction contracts typically include clauses that allow for the extension of the completion date under certain conditions. These conditions usually encompass delays caused by unforeseen events, such as adverse weather, labour shortages, or changes in project scope.
Employer-Caused Delays: If the delay is attributable to the employer, such as delays in providing essential information or site access, the contractor is usually entitled to an EOT. Failure to grant an EOT in such scenarios can lead to the application of the prevention principle, which may absolve the contractor from liability for late completion.
Contractor-Caused Delays: Conversely, if the delay is due to the contractor’s inefficiency or failure to manage the project effectively, the contractor may not be entitled to an EOT. In such cases, damages may be claimable, calculated based on the agreed terms in the contract and the loss that arose.
The Prevention Principle and Time at Large
The prevention principle holds that an employer cannot insist on adherence to a contractual completion date if their actions have hindered the contractor’s ability to meet that date. When this principle is applied, time is considered "at large," meaning the contractor must complete the work within a reasonable period rather than by a fixed date. The industry’s standard contracts often mitigate the risk of time becoming at large by including comprehensive EOT provisions.
Consequences of Failing to Complete on Time
Liquidated Damages (LDs): Many construction contracts include a liquidated damages clause, which stipulates a predetermined amount that the contractor must pay for each day the project is delayed beyond the completion date. This clause however needs careful consideration. The position is differentiated compared to the position in England and Wales in that it usually acts as a cap and damages are not awarded automatically but only following proof of loss.
General Damages: In the absence of a specific LD clause, the employer may still seek general damages for breach of contract. These damages aim to cover actual losses incurred due to the delay in project completion.
Conclusion
Understanding the intricacies of time for completion and extensions within construction contracts is crucial for both contractors and employers. By clearly defining these terms and adhering to the stipulated procedures, parties can mitigate risks and avoid disputes.
For tailored advice and legal support on construction contract issues, including delays and extensions of time, please contact Klitos Platis by email at klitos@kleanthousplatis.com.
The content of this article is valid as of the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Klitos Platis by email at klitos@kleanthousplatis.com.