Constructive Acceleration In Light Of V601 v Probuild

While the concept of constructive (implied) acceleration is well-established in the United States, other common law jurisdictions have long been less favourable to contractors' claims for acceleration costs incurred when an employer wrongfully denies an extension of time (EoT) application.

However, the Australian case of V601 Developments Pty Ltd v Probuild Constructions (Aust) Pty Ltd [2021] VSC 849 has potentially opened new avenues of recovery for contractors that find themselves in that unenviable position. In its 2021 ruling, the Supreme Court of Victoria found that a contractor's acceleration costs were recoverable as damages arising from the employer's breach of contract in failing to allow the contractor's EoT claims. While other common law jurisdictions are yet to have adopted a similar stance, the case may provide contractors with novel grounds on which to base a claim for acceleration costs.

This article explores the implications of the V601 v Probuild case in a cross-jurisdictional context, before briefly considering how claims might be advanced under the principal model forms.

Constructive acceleration

Constructive acceleration is a term used to describe a claim arising from a contractor accelerating its work to avoid critical delay to the contractual date for completion after an EoT request is wrongfully denied, or the contractor's works are otherwise delayed by an employer risk event.

The Society of Construction Law's (SCL) Delay and Disruption Protocol defines the concept as "Acceleration following failure by the CA to recognise that the Contractor has encountered Employer Delay for which it is entitled to an EOT and which failure required the Contractor to accelerate its progress in order to complete the works by the prevailing contract completion date."

The concept is not recognised under English law. There is good reason for that – most standard form contracts have express terms and conditions about (i) controlling the pace of work and mitigating delay, and (ii) acceleration, which requires an instruction of the employer (see our blog post here).

V601 v Probuild

In V601 v Probuild, V601 Developments engaged Probuild Constructions for a mixed-use development project in Melbourne. Probuild faced delays and submitted EoT claims, which were rejected by the project manager. When V601 claimed liquidated damages for late completion, Probuild counterclaimed for constructive acceleration costs.

The court found that the project manager, acting on behalf of V601, had wrongfully denied the EoT claims and colluded with V601 to undermine Probuild's entitlements. As a result, Probuild was able to recover the additional costs of accelerating its work either as damages arising from V601's breaches or alternatively as mitigation costs. The court did not, however, accept that the failure to grant an EoT amounted to a 'direction' to accelerate.

The case provides a basis on which acceleration costs may be claimed as damages provided that:

• there is a delay event that would entitle the contractor to an EoT;
• the claim for an EoT is made in accordance with the contract;
• the contractor's EoT claim is wrongfully rejected; and
• in rejecting the claim, the Employer breaches the terms of the underlying contract.

The decision also highlighted the importance of impartiality and good faith in the administration of construction contracts, with the employer's failure to act in accordance with these principles forming part of the basis of the breach.

Since being handed down, the decision of V601 v Probuild has not been the subject of significant judicial treatment by the Australian courts. However, there have been some cases giving rise to similar issues in which damages have been awarded on a similar basis, such as in the recent Queensland Supreme Court decision of Santos Ltd v Fluor Australia Pty Ltd [2025] QSC 184. In that case, Santos advanced a claim for disruption-related costs which it alleged it had incurred due to breaches by Fluor, which resulted in increased resources being deployed in order to complete the project on time. All the same, Santos did not advance its claim as a claim for acceleration, and the court agreed with this (noting that Santos had not alleged that there was a wrongful rejection of an EoT claim).

Can V601 v Probuild be followed in other jurisdictions?

• UK: Constructive acceleration is not a principle recognised under English law, and a contractor seeking to rely on the V601 v Probuild case would have to contend with Ascon Contracting Ltd v Alfred McAlpine Construction Isle of Man Ltd (1999) 66 ConLR 119 (QBD).

Here, the High Court found that damages incurred in accelerating progress to mitigate an employer's culpable delay could not be recovered as the contract contained a clear machinery for dealing with culpable delay by EoT and reimbursement of loss and expense. The court was also concerned with the risk of double recovery if both loss and expense costs and acceleration costs were allowed, "unless it [were] alleged and established that the attempt at mitigation, although reasonable, was wholly ineffective" (para. 56).

However, to avoid the contractor recovering twice, the contractor in V601 v Probuild carried out a detailed forensic exercise to distinguish between costs recoverable as arising from the employer's breach, and costs that would otherwise be recoverable as "loss and damage" incurred in connection with the employer's delay event (i.e., in connection with the wrongfully denied EoT claim). It may be possible for a contractor to advance a Probuild - style claim in English-law proceedings on this basis.

• US: Constructive acceleration is largely recognised in principle, subject to the following criteria being satisfied:
  • there has been excusable delay – that is, delay for which the employer rather than the contractor is responsible;
  • the contractor has requested, and established entitlement to an EoT, which the employer has failed to grant;
  • notice has been given by the contractor that it considers the employer's order (express or implied) to complete within a shorter period than the unsuccessful EoT request to amount to an order to accelerate; and
  • the contractor has engaged in 'actual acceleration': that is, it has taken measures (for instance, reallocating resources, increasing labour hours or modifying work processes) to accelerate the project schedule.

• UAE: The legal position in the UAE is less clear: there is no generally recognised concept of constructive acceleration. However, principles of good faith and compensation for harm may support constructive acceleration claims under certain conditions.

Grounds for claiming employer's breach of contract in failing to award an EoT

Aside from the substantive law governing the contract, a contractor's ability to claim damages for breach of contract in failing to award an EoT will depend on the wording of the contract in question.

Taking the FIDIC Red Book 2017 as an example, clause 3.7 of the FIDIC Red Book 2017 imposes an obligation on the engineer to undertake a "fair determination" of a claim or matter. We have seen many cases where a breach of this clause is asserted. Where established, this may provide a basis to make Probuild - style claims for breaches of contract in refusing EoT claims.

Practical tips when considering acceleration claims

Lastly, it is important to consider that the legal and contractual provisions will only determine the strength of a claim for constructive acceleration to a certain extent. As a matter of practice, much will hinge on the ability of a party to present its case with reference to a contemporaneous document trail, as well as a party's compliance with time bars and other contractual requisites.

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.