IN TIMES OF FORCE MAJEURE
COMMUNICATE – COOPERATE – BE HONEST ABOUT WHAT YOU KNOW – COMPLY WITH CDC GUIDELINES
The conflict between contract expectations that “contracts must be honored” but “provided conditions unchanged” collide in “Force Majeure.” The general rule is that delay in performance caused by an epidemic or pandemic is an excusable but non-compensable delay, extending time for performance but providing no additional compensation to a contractor or subcontractor.
1. For each contract:
a) Review terms for “Force Majeure, Delay, Time, Suspension, Termination by Convenience, Unforeseen Conditions”
b) Review and follow terms for “Notice, Change, Claim.”
2. Prepare a written Notice to your owner, contractor, and/or subcontractor:
- Our work on this Project is delayed by COVID-19
- We require additional time and damages for delay
- We reserve all rights related to the delay
- We will cooperate and advise of changed conditions
- We are unable to predict when or what conditions will change and how conditions will affect, improve or delay performance
3. Send the Notice in accordance with the contract requirements for notice, also notice by e-mail.
4. Document your current project performance starting in January to compare with current and future performance.
- Identify the current status of performance along the critical path and identify if the delay is now affecting work, how it affects, and track it in the future.
your daily logs and photos, identify specific changes in Work and note where
changes are related to COVID-19:
- Worker availability
- Material shortages
- Changes in sequence
- What you are doing to maintain social distancing and cleaning
- Request that your subcontractors and material suppliers keep you advised as to changes both in time and cost
5. Mitigate damages:
- Document your efforts to obtain workers and material
- Identify measures you are undertaking to implement infection control
6. Implement work practices that conform with the CDC guidelines.
7. Carefully draft new contracts to address the allocation of risk or delay, disruption and what are now not “unforeseen conditions.”
Your contract terms and common law generally excuse delays caused by this pandemic, often including Force Majeure clauses as well as the implied common law principles of “impossibility” and “impracticability”, and provide for extensions of time for performance but not additional payments for the costs of delay that the contractor will incur.
In tailoring future projects, use the knowledge you are now gaining and work with your counsel to draft provisions that may protect you in the future. If you have questions regarding delays in your construction project or other legal issues do not hesitate to contact the Construction Attorneys at Mesch Clark Rothschild.