FORMULATION & PRESENTATION OF EOT CLAIMS LECTURE 3 FORMULATION & PRESENTATION OF EOT CLAIMS

CONTENT FOR FORMULATION & PRESENTATION OF EOT CLAIMS Practical completion Extension of Time & L. D. Presentation of Extension of Time claim Delay within float time by Architect, but later delay by the contractor Delay not on the critical path Concurrent delay by both parties Concurrent delay followed by subsequent delay Delays after the Contract Completion Date Prevention, presentation & assessment Summary on Extension of Time claims Recovery of loss and / or Expenses and / or Damages

DATE FOR / OF COMPLETION Date for (Practical) Completion Specified completion date agreed at tender time Set at the outset of the contract The date calculated from the date of possession including, if any, EOT granted Date of (Practical) Completion The actual date that the contractor completes his work

IMPLICATION OF P.C. Relieve contractor from (further) L.D. Employer is entitled to take possession of the site. Employer to take out insurance D.L.P. commences Release half retention End of regular interim certificate Measurement period commences Arbitration can be opened

EXTENSION OF TIME Delay not by fault nor responsibility of the contractor Extension of time Relieve contractor from paying L.D. to the Employer

EXTENSION OF TIME Delay by Employer Relevant clause in Contract No for EOT No Architect cannot grant EOT Yes Time at large, i.e. complete within a reasonable time Architect grants EOT

TIME AT LARGE ??? Reasonable time ??? Reasonable time is equated to the amount of delay Failure to complete within a reasonable time Unliquidated Damages (U.D. not L.D.)

What is Liquidated Damage ? It is a kind of contractual provision in which a specified sum of money is to be paid by one party to the other, or the forfeiture of goods or other property by that party to the other in event of particular specified breaches of the contract committed by the former party.

L.D. & PENALTY L. D. Genuine pre-estimate of the loss Penalty Extravagant compared with the greatest possible amount of loss It does not matter whether the term used is L.D. / penalty Non completion certificate needs to be issued before deducting L.D.

COULD THE EMPLOYER DEDUCT L.D. IF HE HAS NOT SUFFERED ANY LOSS? As far as the L. D. amount is a genuine pre-estimate of the possible loss, the L.D. is enforceable. They are recoverable whether or not the employer can prove that he has in fact suffered loss or even if, in the event, there is no loss at all. case : Clydebank Engineering Vs Castende.

ARCHITECT ASSESSES EOT AT HIS BEST KNOWLEDGE If the contractor did not give notice of claim or did not furnish full particulars of the EOT claim, the Architect / Engineer must do his best to estimate the EOT that can be granted to the contractor. Case: Merton v. Leach However, the contractor cannot complain if the EOT granted, based on the inadequate information the Architect has, is not up to his desired period.

CAN THE ARCHITECT USE THE CONTRACTOR'S FLOAT TIME ? The float in the Contractor's program is for the benefit of the contractor Delay on the part of the Employer which reduces that float may have to be taken into consideration when considering the time required for completion However, if the subsequent delays are outside the float of the non-critical activities, EOT is entitled eventhough the delay event is a non-qualifying event provided that sufficient float is used up by a qualifying event before

DELAY NOT ON CRITICAL PATH If delay occurs to activity not on the critical path and the total delay to the activity does not make it critical, then no extension of time will be granted as there is no effect to the completion date Activity on non-critical path No EOT for delay within this time limit

CONCURRENT DELAYS Delay by the Contractor Delay by the Architect / within the control of the Employer The contractor may not recover the loss & expense for the period delay by the Architect if he has some contribution in the delay

CONCURRENT DELAY - CRITICAL & NON-CRITICAL D1 & D2 are concurrent, i.e. at the same time If D1 is a qualifying delay/ relevant event, D2 is not EOT can be granted. If D2 is a qualifying delay / relevant event, D1 is not no EOT can be granted.

CONCURRENT DELAY FOLLOWED BY SUBSEQUENT DELAY If the subsequent delays are still within the float of the non-critical activities, then no EOT would be entitled If the subsequent delays are outside the float of the non-critical activities, EOT is entitled eventhough the delay event is a non-qualifying event provided that sufficient float is used up by a qualifying event

CULPABLE DELAY A contractor is late and liquidated IN THEORY A contractor is late and liquidated damages are incurred Client issues variations which will further delay the completion date (culpable delay) Time is set at large Client's rights to deduct L.D. are forfeited

DELAY AFTER THE CONTRACT COMPLETION DATE If extension of time has not been made for previous qualifying delays, Architect has no power to extend the time for completion for a new qualifying event occur after 'any extended time previously fixed ……' Therefore, EOT must be granted for all known delays before the existing completion date has passed, otherwise time will be at large and L. D. cannot be enforced.

Revised completion date Unknown gas A.I.reroute Delay by Main Contractor (excavation for final connections to the foul drainage) EOT for only A.I. Works if it is on the critical path

Revised completion date Architect instructs to cease work & add manholes Delay by Main Contractor (excavation for final connections to the foul drainage) Delay due to additional manholes EOT for total delay as Architect should have issued the instructions

EOT AFTER DATE FOR COMPLETION Most contracts do not contain the essential machinery to enable the employer to deduct L. D. for the period when the contractor is in culpable delay The contractor's liability for L. D. may evaporate if employer causes delay after the extended completion date. However, the employer has to prove Unliquidated Damages for deduction.

DAMAGES Substantial Damages Actual loss / damage Nominal Damages No loss / damage at all Exemplary (Punitive, vindictive) Damages Not in contract, in tort only General Damages 1. For loss presumed w/o proof 2. Loss incapable of precise estimation, e.g. pain Special Damages 1. For loss need to be proved 2. Out of pocket expenses or earning loss Liquidated Damages Genuine pre-estimate of loss fixed by contracting parties Unliquidated Damages Amount fixed by court

PREDOMINANT CAUSE OF DELAY Ignored Inclement weather CONSTRUCTION PERIOD Works is stopped Industrial relations problem FIRST OCCURING (PREDOMINANT) CAUSE

CONDITIONS PRECEDENT Depends on the conditions (and special / supplementary conditions, if applicable) of contract, the following conditions are precedent to granting EOT : Notice Mitigate the delay Details must be given as soon as possible Within the time limit specified, if any. (time barred) The costs and expenses must not be duplicated in a variation.

PREVENTIVE MEASURES OF DELAY Improve and adhere to quality assurance programs Review the contract carefully Review the program of works carefully Establish an early warning system including diaries, reports and concise filing systems Be prompt in the request for variation orders Act quickly & do not ignore the problem Recognise the responsibility in the project team, work with the other professional members and consultants. Identify the dates when the work associated with potential variations started and finished.

PRESENTATION OF EOT INCLUDES Supporting records & particulars activities status dates events Narrative of the events Effects on progress No. of days requested to be granted for extension Cause of delay Contractual ground Delay commencement Delay period Notice of delay effects of the delay estimated delay Program before delay Program after delay

EOT CLAIMS ASSESSMENT Delay due to weather must be considered in relation to the work being carried out by the contractor at the time of the delay and not by referencing to the work which could or should have been happening in accordance with the Contractor's program of operations. If it is not possible to avoid delay due to the fact that neither party had realised sufficiently in advance that the information was necessary, the contractor is not entitled to an extension of time. Architect has no obligation to provide information to enable the contractor to move faster than envisaged.

SUMMARY ON EOT CLAIMS Keep accurate up to the minute records Accept a fair settlement, mitigate losses at all times if appropriate Maintain an as built construction program Keep accurate site progress sheets Keep notes of discussions held, contractors or COW reports Keep a record of weather conditions Record the current workforce and equipment levels Identify the status of documented progress to which the variation or daywork items should relate Regular progress photographs also provide good records especially when the date and time is recorded on the plate.

EOT AND COSTS Granting EOT does not automatically allow contractor for loss and expense, etc. Loss & expenses claims will be dealt with in Lecture 4