On an ideal construction project, contractors stay on schedule and meet every deadline to complete the job on time. Unfortunately, things rarely go so smoothly. Delays are extremely common, and they cost people money, time, and reputation. Of course, whenever there are negative consequences in the construction contracting industry, someone must be responsible. Exactly who bears responsibility depends on whether it was an excusable delay or a non-excusable delay.
Learn more: Types of Delay Claims & Common Defenses
When a contractor agrees to perform work, they work with the owner to set a schedule that lays out deadlines for each stage of the project to be complete. The completion date for the entire project is based on the deadlines of each phase.
The stakes are especially high for contractors — a delay might mean not getting paid in full or receiving a payment late. It could also mean being held in default and being sued by the property owner. If the delay was excusable, the contractor cannot be held in default and has the right to collect payment for work he has performed.
What is an excusable delay?
An excusable delay is any delay caused by unforeseeable events out of a contractor’s control. A contractor is afforded additional time, compensation, or both for an excusable delay.
A contractor cannot be held in default for a delay that is deemed to be excusable. Thus, he is not financially liable for the property owner’s resulting losses.
When the delay is excusable, the contractor is entitled to an extension of time. However, he is not necessarily entitled to additional compensation. That would require the delay to be compensable.
For a delay to be compensable, the property owner must be responsible for the delay. For example, if there was an error in the construction drawings, and the contractor’s work is delayed as a result, he would be entitled to additional time and compensation.
Essentially, when a delay is excusable, it is simply a non-fault verdict. Neither the contractor nor the property owner are liable, and neither party is required to pay any additional compensation to the other.
When is a delay non-excusable?
A delay is non-excusable when it’s the product of the contractor’s own mistake or negligence. For example, if the contractor fails to apply for permits in a timely manner, and work on the project is delayed as a result, this would constitute a non-excusable delay.
Contractors are also responsible for delays caused by their subcontractors. If a subcontractor fails to order supplies on time, and an important stage of the project cannot be completed, the contractor would be in default.
It is important to note that a delay can be excusable even if it is not explicitly listed in the contract. Whether or not a delay is excusable is frequently a source of conflict between contractors and property owners, and the courts are often left to sort things out between the parties.
Examples of excusable delays
Excusable delays are beyond the control of the contractor and cannot be attributable to its negligence or wrongdoing. Specific examples include:
- Acts of God (Force Majeure Events): Natural disasters (hurricanes, tornadoes, earthquakes, etc.), fires, and floods can make work dangerous or unsafe, forcing the contractor to put off work.
- Delays caused by the owner: For example, if the property owner requests a last-minute change in the design of the project (e.g., wants the building to have a dormer roof instead of a flat roof).
- Delays from drawing errors: The contractor relies on architectural drawings for the design and specifications of the structure. If the drawings are incorrect, work may need to be redone. For example, if the drawings show the incorrect roof pitch, the roof may need to be rebuilt.
Examples of excusable delay clauses
Generally, events that constitute excusable delays are delineated in a clause within the contractor agreement. The clause will identify specific events, occurrences, and circumstances that are considered excusable delays, and what the contractor is entitled to if such a delay occurs.
More information: Watch Out for ‘No Damages for Delay’ Clauses
The Federal Acquisition Regulation (FAR) includes a provision that describes how fault and costs are attributed when a contractor’s work is delayed during a government construction project. Many contracts use similar clauses to define the excusability of different types of delays. This provision states:
“(a) Except for defaults of subcontractors at any tier, the Contractor shall not be in default because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of these causes are (1) acts of God or of the public enemy, (2) acts of the Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance, the failure to perform must be beyond the control and without the fault or negligence of the Contractor. “Default” includes failure to make progress in the work so as to endanger performance.”– FAR 52.249-14
Here’s a second example of an excusable delay clause from the AIA A201 General Conditions:
“If the Contractor is delays at any time in the commencement or progress of the Work by (1) an act or neglect of the Owner or Architect, of an employee of either, or of a Separate Contractor; (2) changes ordered in the Work; (3) by labor disputes, fire, unusual delay in deliveries, unavoidable casualties, adverse weather conditions, documented in accordance with Section 184.108.40.206, or other causes beyond the Contractor’s control; (4) by delay authorized by the Owner pending mediation and binding dispute resolution; or (5) by other causes that the Contractor asserts, and the Architect determines, justify the delay, then the Contract Time shall be extended for such reasonable time as the Architect may determine.”– AIA A201 §8.3.1
Best practices: Preventing delays
Some delays are caused by extreme weather or other acts of God, but many are due to mundane human error — in other words, they are preventable.
Thankfully, there are sure-fire methods to prevent delays that are both free and easy to execute.
When it comes to keeping a project on schedule, communication is critical. Many projects are thrown off course because a deadline or requirement wasn’t communicated effectively between the owner and the contractor or between the contractor and the subcontractor.
2. Jobsite coordination
Site coordination (or lack thereof) is also a frequent source of hang-ups — especially when it comes to subcontractors, who need the requisite supplies, time, and space to perform their work. Poor site coordination equals far too many people sitting around waiting to work, instead of actually getting things done.
3. Set realistic deadlines
Relatedly, there is no point in setting deadlines if they’re impossible to meet. Increasing the odds of a timely completion starts with setting realistic expectations. Setting a deadline that is incredibly difficult to meet is setting you and your team up for failure.
4. Plan for delays
We all want a seamless build that proceeds from start to finish without any hiccups, but this is a fantasy. Things don’t go as expected. Delays happen — they’re part of life as a contractor. Instead of engaging in wishful thinking, plan and prepare carefully and conservatively.
Defend your payment rights
Finally, even when a contract establishes the contractor’s right to an excusable delay and clearly describes when those rights may be exercised, some property owners still deny the additional time and compensation they owe to the contractor.
Contractors that experience an excusable delay on a project and were wrongfully denied payment can file a mechanics lien — the most efficient and affordable payment collection tool available to contractors.