Extension of Time & Loss and Expense

Question 1

What are the relevant events listed within the JCT Standard Contract?

Answer 1

1. A variation
2. An instruction by the Architect/Contract Administrator
3. Deferment of possession
4. Suspension of contract
5. Impediment by the employer
6. Statutory Undertaking
7. Exceptionally adverse weather
8. Loss or damage occasioned by a specified peril (fire, lightening, explosion, storm, flood)
9. Civil commotion or threat of terrorism,
10. Strike, lock-out affecting any trade employed upon the works
11. The excise after the Base Date by the Government or local/public authority of any statutory power which directly affects the work
12. A Named Specialist becoming insolvent
13. Force majeure.

Question 2

What is a relevant event?

Answer 2

A delay that impacts the completion date for the project, which is not the fault of the contractor, and for which they are therefore entitled to an extension of time.

Question 3

What must contractor do to obtain an extension of time?

Answer 3

The contractor should submit a delay notice to the employer as soon as soon as it becomes reasonably apparent.

The delay notice should:

• It should be in writing
• State causes of delay
• Identify Relevant Event

Question 4

What are the contract administrators obligations in assessing an extension of time?

Answer 4

Typically, will request further information

Give an extension of time that is reasonable

Give reasons within 12 weeks

State extension of time relating to each Relevant Event

Fix new completion date

Must issue a new non-completion certificate after each and every extension of time granted.

Question 5

What is loss and expense?

Answer 5

Loss and expense is a contractual mechanism that allows the contractor to claim for a direct loss and/or expense as a result of the progress of the work being materially affected by the relevant matters for which the client is responsible.

Question 6

What is a relevant matter?

Answer 6

A Relevant Event which is a Client in Control Event and which therefore results in the contractor being awarded time and money for the delay.

Question 7

Provide 4 examples of relevant matters?

Answer 7

Variation or change
Impediment by the employer
Deferment of possession
Delayed instructions

Question 8

What is the extension of time procedure under JCT?

Answer 8

1. Contactor to apply as soon as it becomes apparent – using a notice
2. Architect (or EA in D&B or CA) will instruct QS to ascertain loss and expense.
   QS typically seeks further information required known as: ‘further and better particulars’.

Question 9

What should a good contractors loss and expense claim notice contain?

Answer 9

State a ‘Relevant matter’

Cause and effect

Supporting info

Reference to docs and records

Question 10

When is time viewed to be ‘at large’?

Answer 10

Without the EOT and liquidated damages provisions, if the contractor is prevented from completing the works by the date for completion for reasons beyond his or her control, time would become ‘at large’ and liquidated and ascertained damages would be unenforceable.

Question 11

What are the most important clauses in relations loss and expenses claims?

Answer 11

The loss and expense must be actual; and the CA should therefore not estimate value but actually find out what the contractor has expended or lost. This will involve the CA making enquiries of the contractor.

Where the contract conditions contain the provision that the contractor must make written application to the CA that direct loss and expense will be incurred the CA must be satisfied that the contractor’s application has been made as soon as required under the conditions of the building contract. Delay in doing so could preclude a claim and this should be considered.

Whenever even part of the loss and expense is ascertained, it should be taken into account in the computation of the next interim certificate.

Question 12

What is a force majeure?

Answer 12

Exceptional, unforeseen events or circumstances that are beyond the reasonable control of a party to a contract and which prevent or impede performance of their obligations.

Question 13

What is a statutory undertaking?

Answer 13

Where a statutory undertaker such as a gas, electricity, or water company or a local authority is carrying out works in pursuance of a statutory obligation.

Question 14

What is a specified peril?

Answer 14

The contractor is entitled to an extension of time in the event that a delay is caused by any of the specified perils stated within the all-risks insurance, such as flood, fire or earthquakes.

Question 15

What is concurrent delay?

Answer 15

A situation where a construction project is delayed by two events at the same time, one being an event for which the employer takes responsibility under the contract and the other for which the contractor takes responsibility.

Question 16

What method of delay analysis are you aware of?

Answer 16

As planned vs as built, an planned impacted and Time impact analysis.

Question 17

What methods of delay analysis would you typically undertake on a smaller project?

Answer 17

As planned vs as built.

Question 18

What is the critical path?

Answer 18

The critical path establishes the relationship between the activities in the programme and applies estimated timings to these. The critical path can be defined as the determination of the shortest possible route from the programme start to the finish.

Question 19

What is a critical path analysis?

Answer 19

A critical path analysis is a project planning method that determines those tasks that are dependent on other tasks for their timely completion, which if delayed would ultimately delay the overall completion of the project.

Question 20

What is the procedure for loss and expense?

Answer 20

Contractor to provide a valid notice as soon as it becomes reasonably apparent.

CA will then instruct QS to ascertain loss and expense. They will typically see further and better particulars.