Tutorial Question 2

1. Delays and Disputes
Members:
1. Jacquelyn Vanessa Tee
2. Lee Lin Hui
3. Jason Teo Chun Chen

2. Questions
Q1: As a Consultant assessing an extension of time application by
the Contractor, what are the initial checklist and the principles to be
applied?
Q2: What are the purpose of an extension of time clause in most
standard contract and its implications? What is the implications of a
Certificate of Non-Completion? What is the difference between
general damages and liquidated damages?
Q3: What are concurrent delays? Is the Contractor entitled to
extension of time and loss and expense if there are concurrent
delays by Employer and Contractor?

3. “Q1: As a Consultant assessing an extension of time application by the
Contractor, what are the initial checklist and the principles to be applied?

4. Elements that needs to be clearly identified and present in the Contractor’s claims
are:
▣ The Relevant Event [Clause 23.8(a) - 23.8(x)]
- Related to Clause 23.1.
▣ Liability for the Relevant Event
- Proving the Contractor did not contribute towards the event which is stated
in the Conditions of Contract as being one which entitles the Contractor to
an EOT.
▣ Contractual Entitlement
- Contractor needs to state which clause or sub-clause under the PAM Contract
he considers he is entitled to.

5. ▣ Clause 23.1 - If the Contractor is of the opinion that the completion of the Works is or
will be delayed beyond the Completion Date by any of the Relevant Events stated in
Clause 23.8, he may apply for an extension of time provided always that:
Sub-Clause 23.1(a) of the PAM Conditions
states that the Contractor shall give written
notice to the Architect of his intention to
claim for an extension of time and that such
notice must be given within twenty-eight
(28) Days from the date of the Architects
Instruction or the commencement date of the
Relevant Event, whichever is the earlier and
the giving of such a written notice shall be a
condition precedent to an entitlement to an
extension of time.
Sub-Clause 23.1(b) within twenty eight (28)
days of the end of the cause of delay, the
Contractor shall send to the Architect his final
claim for extension of time duly supported
with all particulars to enable the Architect to
assess any EOT to be granted. If the
Contractor fails to submit such particulars
within the state time (or within such longer
period as may be agreed in writing by the
Architect), it shall be deemed that the
Contractor has assessed that such Relevant
Event will not delay the completion of the
Works beyond the Completion Date.

6. ▣ Cause and Effect
- Prepare facts describing the effects of the relevant event upon the Works.
Should include details of the works that were affected and the status of the
work.
▣ Substantiation
- Contractor should provide copies of documentary evidence (eg. progress
report and photos, minutes of meetings, programmes and schedules)

7. “Q2: What are the purpose of an extension of time clause in most standard
contract and its implications? What is the implications of a Certificate of
Non-Completion? What is the difference between general damages and
liquidated damages?

8. Construction contracts generally allow the construction period to be extended
where there is a delay that is not the contractor's fault. This is described as an
extension of time (EOT).
When it becomes reasonably apparent that there is, or that there is likely to be, a
delay that could merit an extension of time, the contractor gives written notice to
the contract administrator identifying the relevant event that has caused the
delay.
The purpose of an extension of time clause in the contract is to preserve
liquidated damages and prevent the contract from being frustrated. The main
beneficiary of the extension of time clause is the employer.
What are the purpose of an extension of time clause in most
standard contract and its implications?

9. It is not uncommon for delays to cause the completion date to be missed, that is,
the works are not complete, and so a certificate of practical completion cannot be
issued by the date for completion.
Employer will issues the contractor with a certificate of non-completion
(sometimes referred to as a ‘non-completion certificate’ or ‘non-completion
notice') as a prerequisite to claiming liquidated and ascertained damages. The
certificate of non-completion gives formal written notice to the contractor that
they have failed to complete the works described in the contract by the
completion date that was last agreed (the original completion date may have been
adjusted during the course of the works).
● Clause 22.1, 22.2
What is the implications of a Certificate of Non-Completion?

10. Liquidated damages (sometimes referred to as agreed damages) are a fixed sum of
money which has been agreed in advance of a contract breach to compensate the
‘innocent party’ for a breach of contract such as delay in completion of a project.
Clause 22.2: The Liquidated Damages stated in the Appendix is a genuine
pre-estimate of the loss and/or damage which the Employer will suffer in the
event that the Contractor is in the breach of Clause 21.0 and 22.0. The parties
agree that by entering into the Contract, the Contractor shall pay to the Employer
the said amount, if the same becomes due without the need for the Employer to
prove his loss and/or damages unless the contrary is proved by the Contractor.
General damages are to be assessed by the court at a hearing of the matter, and
could be for any amount from $1 up to an unlimited amount.
What is the difference between general damages and
liquidated damages?

11. “Q3: What are concurrent delays? Is the Contractor entitled to extension of time
and loss and expense if there are concurrent delays by Employer and
Contractor?

12. Concurrent delays can easily be defined as “Two or more delay events occurring
within the same time, each independently affecting the Completion Date of a
project.”
As it is rare for events to happen at the same time, not all of those events enable
the contractor to claim an extension of time or to claim loss and expense. Yet, it is
difficult in determining whether concurrent delays are allow an extension of time
and loss and expense claims.
➔ Employer Delay + No Contractor Delay = EOT & Cost
➔ Employer Delay + Contractor Delay = Depends on the case, Possibly only EOT no Cost.
➔ No Employer Delay + Contractor Delay = Liquidated Damages

13. Is the Contractor entitled to extension of time and loss and expense if there
are concurrent delays by Employer and Contractor?
➢ Depends how the contract has been amended and agreed
➢ Find out the cause of delays by both parties, to be view and determine for
extension of time and loss and expense
➢ Contractor is entitled to extension of time and loss and expense if the
dominant delays are caused by Employer

14. Case Study: City Inn v Shepherd Construction Ltd (2010)
The Facts:
The dispute was about late completion of a hotel in Bristol. The parties had entered into an
amended JCT standard form of building contract, 1980 edition. The contractor (Shepherd) had been
awarded a 4-week extension of time by the architect and was given an additional 5 weeks by an
adjudicator.
City Inn was unhappy with the adjudicator’s decision, and raised proceedings in the Court of
Session seeking various orders, including a declaration that the contractor was not entitled to a
single day by way of extension of time. Shepherd counterclaimed, seeking 11 weeks extension of
time and payment of associated loss and expense.
The Decision:
The Scottish Appeal Court decided that apportioning delay was appropriate & concluded that:
- The relevant event must delay or be likely to delay the works.
- If a dominant cause can be identified, this must be the relevant event.
- If no dominant cause can be identified, an apportionment should be made in a fair and
reasonable way.

16. Questions:
1. Will Contractor be automatically entitled to compensation due to
prolongation when EOT is granted to him?
Answer:
No. Entitlement to an EOT does not automatically lead to entitlement to
compensation.
Contractor will only be entitled to compensation if EOT is granted because of the
delay is caused by the Employer.
The Contractor will not be entitled to compensation if the EOT is granted due to
neutral events.

17. Questions:
2. If the Contractor is in the situation whereby his Works are affected
or bound to be affected by a heavy thunderstorm for a whole month,
under which clause under Relevant Events shall he apply EOT & what
are the particulars he should provide to support it?

18. ▣ Answer:
23.8 (b) Exceptionally inclement weather
Eg. Let’s say it rains for the whole month in December and the
Completion Date is a few months after that, it would definitely
affect the Works. In some cases, Works can’t even be carried out
such as concrete works.
Therefore, Contractor needs to provide statistics of the weather
for the month of December from the past years for proof that it is
a month that is prone to thunderstorm.