If rainy weather prevents you from getting the job done on time,
virtually all construction contracts will allow you to claim an
extension of time (EOT). In fact, for reasons we will consider in
another blog, your head contractor or principal may benefit from
granting you an EOT so that it can claim liquidated damages if you
do not practically complete your works by the extended time for
However, contractors often want to take their delay-claim a step
further by also seeking to be compensated for the losses that they
suffer by having to "man-down" or keep their labour and
machinery idle on site while they wait for delayed head works to
catch up to them. This kind of loss is commonly known as
Prolongation costs and EOTs are often seen as going hand-in-hand
because they deal with the same problem for contractors: the
negative financial impact of delayed works on construction
contractors. However, from a contractual point of view, there is an
important difference. That difference has to do with how
construction contracts typically allocate risk between contractors
(including subcontractors) and principals (including head
Typically, the contractor agrees to complete the whole of the
contractual scope of work (as varied) for the agreed contract price
(as varied) by the agreed time for completion (as varied). The risk
of incomplete, defective, unprofitable or late delivery of the
works is allocated to the contractor under the contract.
Construction contracts typically contain certain "safety
valves", however. An important one of these is the EOT clause.
EOT clauses typically prescribe certain events beyond the
contractor's control, such as rainy weather, as qualifying the
contractor to claim an EOT.
If the contractor exercises this right and the time to complete
the works is extended, this does not mean that the contractor can
make a claim against the principal for the losses that the
contractor suffers because of the extra time it has to spend on
site. This is because the contract has allocated the risk of not
finishing on time to the contractor, not the principal. There is no
basis in the contract to shift the loss caused by the delay from
the contractor (which contractually bears the risk of that loss) to
All an EOT does is ensure that, to the extent that delay is not
the contractor's fault, the contractor does not become liable
for the losses caused by delay to the principal. In other words, as
long as the contractor exercises its right to claim EOTs properly
and on time, the EOT clause ensures that the contractor only has to
compensate the principal for delay that the contractor has caused
in breach of its contractual obligation to practically complete its
works (as varied) by the agreed time for completion (as
The same goes for the principal. The contract may, for example,
provide (or imply) that the principal will ensure that the site
will be ready to receive the contractor's works immediately, or
that the project will keep pace at all times with the
contractor's program. In that event, if the head works fall
behind causing delay to the contractor, the contractor may claim
that the delay has resulted from the principal's breach of the
contract. In that case, the delay may not be treated as part of the
risks that the contractor agreed to take on under the contract: it
may be treated as a breach of contract instead, which may then
entitle the contractor to be compensated for its "prolongation
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Warranties can be risk-shifting mechanisms when the party giving the warranty is not the party at fault for the defect.
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