You And the Law Articles

Delay is Most Common Construction Problem

Construction disputes can be a headache to hammer out. Problems tend to have a domino effect, impacting everyone from the general contractor to the sub-contractor to sub-sub-contractors.

The most common problem in the construction industry leading to multi-party disputes is delay. If a sub-contractor realizes he ordered the wrong windows and it will be at least two weeks before the right ones come in, this delay will affect every trade up and down the construction chain. Each trade will want to be compensated by the sub-contractor who caused the delay.

Mind you, sometimes a delay isn’t anyone’s fault. Severe weather or different site conditions than expected may be excusable delays. Depending on the contract, such a delay may excuse a party from meeting a contractual deadline. The owner may have to give the contractor more time to complete the job (and also pay for any additional costs resulting from the delay).

Then there are delays that are caused by the owner, for example, where the owner requests excessive changes in requirements or design, or doesn’t get the necessary permits, or insists on interfering with the work. In these circumstances, the delay is generally compensable – the owner must provide the contractor with an extension of time to complete the work and compensate the contractor for additional costs.

Delays caused by the contractor are also compensable. Examples of such delay include poor workmanship and the contractor’s failure to order materials and equipment in a timely fashion. For these delays, the owner generally isn’t required to give the contractor extra time to complete the work, and if the contractor doesn’t complete the work in time, the owner can claim against the contractor for additional costs caused by the contractor’s delay.

To establish a delay claim, the delay must affect the overall construction – not just the slack time or "float" that the contractor typically builds into a construction schedule in case extra time is needed to finish a certain part of the work. The delay must also be critical (not just a nuisance) and extend the overall completion date.

Timely notice of a delay claim must also be given. The idea of giving notice is that the party you’re complaining about then has the opportunity to try and deal with the problem in an alternative way and thus avoid the costs associated with a claim.

With the help of your lawyer, you’ll need to prove that the alleged problem actually caused the delay, and that the party you’re claiming against is responsible for the delay. You’ll also need to prove your financial loss caused by the delay through accounting and other financial records.

Because there are typically several parties in complex interdependent relationships involved in construction cases – not to mention the countless documents – disputes that go to trial can take months, even years, to get sorted out. More and more parties therefore turn to alternative dispute resolution methods such as mediation and arbitration. Construction contracts often provide for this. The CCDC-2 "Stipulated Price Contract" put out by the Canadian Construction Association (which represents the interests of the non-residential construction sector) requires mediation to take place before you can proceed to arbitration or litigation.

Many construction projects go smoothly and finish on time, but if a potential claim arises, your lawyer can help.

This law column was written by Janice Mucalov, LL.B.,* with the assistance of PIHL & ASSOCIATES LAW CORPORATION. A version of this column was published in the Kelowna Daily Courier. The column provides information only and must not be relied on for legal advice. Please contact PIHL & ASSOCIATES LAW CORPORATION for legal advice concerning your particular case.

 

*Lawyer Janice Mucalov has authored several popular law books and writes about legal affairs for a variety of publications. "You and the Law" is a registered trade-mark. © by Janice Mucalov.