Delay Claims in Construction
Project delays are expensive because even if progress slows down, the bills keep coming. Because delay claims are inevitable in the construction industry, contracts should anticipate them and serve to compensate the parties in a fair manner.
Contract Limitations for Construction Delay Claims
Many contracts contain a limitation on damages or a "no damages for delay" provision. Even in the face of these provisions, our construction lawyers may be able to pursue a claim for instances of active interference, fraud or concealment. Delay claims are sometimes characterized as impact or acceleration claims. Our firm has handled all types of delay claims and can guide clients toward recovering associated costs. These include indirect costs for extended performance, home office overhead, material price escalation, lost productivity, extended general conditions, unabsorbed field overhead and increased labor costs related to the delay.
Direct damages for delay can also include equipment costs, field costs, remobilization costs, increased storage and material costs. A general contractor or construction manager is in a tough position when there is a delay because liability can extend to the owner and a variety of subcontractors. Delay damages are typically not covered by insurance or payment bonds.
Types of Construction Delay Claims
Generally, claims are divided according to whether the delay is considered excusable or nonexcusable. A project can also be affected by two or more concurrent delays. If your construction project is affected by any type of delay, contact a construction attorney in Gainesville, FL, at Warner, Sechrest & Butts, P.A. Our attorneys will thoroughly review the contract and the situation that led to the delay to provide guidance for possible legal remedy.
Excusable delays are related to an event that occurs outside the contractor’s control and couldn’t have been prevented. Examples are earthquakes, floods, changes requested by the owner, and errors and/or omissions by the owner resulting in failure or delay of the project. Generally, what constitutes an excusable delay is decided upon and outlined in the contract by all parties before the project begins.
Either party may be compensated for most excusable construction delays in time or money. When the delay falls outside the contractor’s control, the resulting cost is usually assumed by both parties.
Nonexcusable delays are those that generally result from the action or inaction of one party and could have been avoided had the party been more attentive. This type of delay may be compensable or noncompensable. A compensable delay allows the contractor to recover damages from the owner for additional costs incurred by the contractor because of the delay. Noncompensable delays grant the contractor extra time to complete their portion of the project but not monetary damages.
Concurrent delays occur when a decision made by the contractor or owner affects at least one line item in the critical path of the project’s schedule. As a result, delayed action from one party causes a delay in the other party’s action. Because the effectiveness of a concurrent delay claim hinges on a defined project schedule, it’s important to have an updated weekly schedule that can be compared to the baseline or contract schedule.
Documenting Construction Delay Claims
It is suggested that delays are well documented. The impacted contractor should make efforts to separate costs related to the delay as they occur. Project management should also track labor costs accurately and provide photographic evidence, if possible. It is much better to identify specific losses related to a delay than to opt for a "total cost" method delay claim. The courts generally frown upon total costs claims.
The construction lawyers in Gainesville at Warner, Sechrest & Butts, P.A. have extensive experience litigating for and defending against construction delay claims. Our law firm has an deep understanding of the construction industry, which allows us to delve into the facts and variables surrounding each situation. If you have a delay claim, contact our law firm today to schedule a consultation with a board-certified Gainesville construction lawyer.