North Midland Building Ltd v Cyden Homes Ltd  EWCA Civ 1744 Background
In our January HTML we reported on the decision in the Technology and Construction Court holding that a clause in a construction contract was unambiguous and therefore could not be said to be inoperable by the prevention principle.
The matter was heard on appeal in July of this year and the original decision of the TCC was upheld.
The Claimant, North Midland Building Ltd, was the main contractor for the Defendant, Cyden Homes. Their agreement was based on an amended JCT 2005 contract in which the extension of time clause at 2.25.1 was amended to state '€¦ any delay caused by a Relevant Event which is concurrent with another delay for which the Contractor is responsible shall not be taken into account.' In other words, in the event there is concurrent delay which was caused by the contractor or for which the risk was allocated to him under the building contract, then the contractor would not be entitled to an extension of time. In this case there was a delay with the project, part of which was attributable to concurrent delay which was the responsibility of the contractor. The contractor sought declarations from the Court that the provisions in the JCT contract which the parties had agreed in relation to concurrent delay was invalid and the employer could therefore not require the contractor to pay liquidated damages. The contractor particularly relied on the prevention principle to claim time was at large and that accordingly the employer was not entitled to liquidated damages as there was no longer a completion date but instead a requirement to complete within a reasonable period.
The Court of Appeal agreed with the TCC that the parties were 'crystal clear' in how they wanted extensions of time to be dealt with. The Court of Appeal held that the prevention principle could not operate to rescue the contractor from a clause which he had freely agreed to and that there was no basis to imply a term to prevent the employer requiring payment of liquidated damages under the contract because the clause 2.25.1 was valid.
This decision is likely to result in parties finding it increasingly hard to deviate from contractually agreed positions, even when this results in harsh outcomes - the prevention principle will not save a contractor from the effects of a clause he has freely agreed to. This is reassuring to employers who rely on concurrent delay exclusions by confirming they are effective and will not risk setting time at large or risking their right to claim liquidated damages. Since the first instance decision in 2017 the use of such clauses has increased and it is likely this confirmation will continue this trend.
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