This document discusses construction delays and extensions of time under standard construction contracts. It defines different categories of delays including those caused by the contractor, employer, and third parties. For contractor-caused delays, the contractor is not entitled to an extension of time or reimbursement for losses. For employer-caused delays, the contractor can claim an extension of time and reimbursement for losses. The document outlines the procedure for applying for an extension of time and the principles for granting one. It also discusses implications of granting or not granting extensions of time, such as liquidated damages and time becoming at large.

1. PROFESSIONAL
PRACTICE 2
CHRISTINA HO CHIA HUI
LOO SIAH MONG
YEONG POH LING

2. CONSTRUCTION
DELAYS AND
EXTENSION OF
TIME

3. INTRODUCTION
Construction delays arising during construction which cause completion
date to be breached

4. DELAYS
Categories of delays : -
➢ Delay caused by Contractor (Clause 21.1)
➢ Delay caused by Employer (Clause 23.8) - 15 relevant events
➢ Delay caused by Third Parties ( Neutral Event) (Clause 23.8) - 9 relevant events

5. DELAY BY CONTRACTOR
Reasons :
● Not having sufficient labour force or plant on site
● Not having necessary materials when needed
● Poor site management/co-ordination/experience
● Failure to pay workers or sub-contractors
Contractual Effects :
● Not entitle to claim for EOT
● No reimbursement for loss and expense
● Employer can be compensated by the way of LD
● Employer may terminate the contractor’s employment if delay is too long

6. DELAY BY EMPLOYER
15 Relevant Events under clause 23.8
Contractual Effects :
● Contractor entitlement to claim for EOT
● Contractor entitle to claim for loss and expense
● Employer cannot impose LD because is own fault
● If delay is serious, contractor can terminate his employment

7. DELAY BY THIRD PARTIES (NEUTRAL EVENTS)
● Weather, Act of God, Natural Justices
● 9 Relevant Events
● Not the fault of contractor or employer
● They have to bare with their own responsibilities
Contractual Effects :
● Contractor entitled to EOT
● Contractor not entitled to lose and expense
● Employer cannot imposed LD
● Contractor and employer should share the burden of delay

8. EXTENSION OF TIME
Procedure of EOT
STEP 1 : Giving of notice
- Must give a written notice of intention to claim for EOT. It is a condition precedent to
any EOT.
STEP 2 : Official Application
- Must submit official application within 28 days after the end of the event.

9. EXTENSION OF TIME
1. Decision to claim for EOT ( is up to the contractor )
2. Failure to submit claim application
3. Written notice shall be a condition precedent to an entitlement of EOT
Case Study 1: Syarikat Tan Lim Bent & Rakan-Rakan v Pulai Jaya S/B (1992)
It was held that this is an expressed condition, contractor must comply. Contractor may lose the case because he failed to submit
written notice.
Case Study 2 : Turner Corporation Ltd v Austotel Pty Ltd (1997)
It was held contractor cannot rely on acts of prevention by employer for not giving written notice. He must give notice which would
have negated the effect of that preventing conduct.

10. Principles for Granting EOT (Architect have to make decision)
1. Before granting EOT, architect have to consider certain items
- In writing - Have materially disrupted the regular progress of works
- Fall within clause 23.8 - Nett effective delay must be assessed based on approved
- Prevent further losses or delays work programme
2. Issue of the certificate of EOT (Architect have to make 2 decision)
- Reject totally with reasons
- Grant an appropriate EOT and issue certificate of EOT

11. 3. Timing of Issue
- Within 6 weeks from the contractor's application, architect must decide an
issue
4. Delay by NSC
5. Obligations of Architect
- To assess the length of EOT, architect must act reasonably, fairly and
impartially
- Failure to assess application and issue EOT is a breach

12. 6. Consequences of Not Granting Contractor’s Application
● If architect default in granting EOT
● Employer will loses the rights to impose liquidated damages
● It is a breach of contract
● Architect liable to the employer in tort (negligence) / for breach of contract (services)
For contractor, initial course of action : i) Make a fresh application
ii) Appeal to employer
iii) Contractor can refer the dispute to Arbitration

13. Can EOT be granted Prospectively or Retrospectively?
1. Clause 23.4
- Architect may issue the written notice of rejection or the certification of EOT before / after
the Completion Date
- Architect can make & approve EOT backward / forward
2. Situations can arise
- Contractor’s submission of his particulars under clauses 23 very near to the completion date
3. Retrospectively
- Contractor submit one week before the completion date
- Architect will assess EOT after completion date

14. EOT After The Issuance Of Certificate of Non-Completion(CNC)
1. If contractor doesn’t complete, architect must issue CNC to contractor. If not employer cannot
impose liquidated damages
2. When clause 23.9 is read together with clause 22.3 the granting of subsequent EOT will
revoke the CNC
3. When CNC is cancelled, employer have to return the surplus liquidated damages.
4. If contractor again fails to complete by the new completion date, a new CNC will be issued by
architect.

15. EOT PROVISIONS
● Employer cannot set new completion date
● Contractor have to complete within a
reasonable time
● Time become at large
● Employer loses the rights to impose
liquidated damages
EOT PROVISIONS
● Completion date can be extended,
if there is a delay
● Employer can set new completion date
● Preserves employer’s contractual rights to
impose liquidated damages
● Prevents time become at large

16. Implications Of Time For Completion Being At Large
1. Original completion date no longer apply
2. there is no definite completion date to work towards
3. Contractor have to complete within a reasonable time
4. Employer loses his right to imposes liquidated damages
5. Contractor’s liability is limited to general damages

17. LIQUIDATED DAMAGES
In order to a successful claim for liquidated damages, Employer have to comply with the
following pre-conditions :
➢ Contract contains express clause enabling the deduction of the liquidated damages
➢ The liquidated clause must be valid and enforceable
➢ Details of liquidated damages must be clearly indicated
➢ Specific contractual procedure must be strictly complied
➢ Must be definite date fixed in contract from which damages can run
➢ Employer has not waived his right to deduct the liquidated damages
Amount of damages that need to be paid to the injured party to collect as compensation upon a specific
breach in a contract.

18. CASE STUDY
Case 1
➢ Selva Kumar a/l Murugiah v. Thiagarajah a/l Retnasamy [1995] 2 MLJ 817
Case 2
➢ Johor Coastal Development Sdn Bhd v. Constrajaya Sdn Bhd [2009] 4 CLJ 569

19. Question 1: As a Consultant assessing an extension of time
application by the Contractor, what are the initial checklist
and the principles to be applied?

20. ● The application must be in writing
● Causes of delay must be under Clause 23.8
● Contractor must have taken all practical steps to mitigate
● Delays must be ‘materially’ disrupted the regular progress of the works, resulting in the
completion date being breached
● The ‘nett effective’ delay must be assessed based on approved work programme under
Clause 3.5

21. Question 2: What are the purpose of an extension of time clauses in
most standard contract and its implications? What is the implication
of a Certificate of Non-Completion? What is the difference between
general damages and liquidated damages?

22. Purpose of EOT
Employer entitled to impose liquidated damages due to the delay caused by contractor.
Contractor in will be granted EOT due to delays caused by employer. (Clause 23.8)
If there is no EOT provision, the contractor’s liability will be limited to general damages not liquidated
damages.
Implication of EOT
If there is EOT provision, completion date can be extended and new completion date can be set. It preserves
the employer’s contractual right to impose liquidated damages to the contractor. It also prevent the completion
time to be ‘at large’.
If there is no EOT provision, time will be ‘at large’, contractor will have to complete the project at a
reasonable time.

23. Implication of certificate of Non completion ( 22.3 & 23.9)
A formal return notice for the contractor, it gives the employer the right to impose liquidated damage to
the contractor.
If EOT is issued after issuance of CNC, employer shall return the surplus amount of liquidated damages
imposed to the contractor.
General damages Liquidated Damages
No EOT provision With EOT provision
Hard to prove (no basis to follow) Easier to prove ( master programme as basis)
No fixed amount Fixed amount
Differences between General damages & Liquidated damages

24. Question 3: 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?

25. Concurrent Delays
● Simultaneous delays caused by the contractor and employer
● Two or more delay events occurring within the same time period
● Affecting the project schedule and project completion date
● but not all of those events enable to claim an extension of time or loss and expense
Contractor entitled to extension of time and loss and expense if
● Have the valid reason and certify by Architect and consultant Quantity Surveyor.

26. QUESTIONS
Q1 : What are the effects of construction projects delay?
Q2 : What are the examples of grounds for challenging extension of time certificate ?
(In what event can the contractor challenge the EOT certificate that is issued by the
Architect?)
Q3 : If Nominated Sub-Contractor goes bankrupt, can the contractor claim for EoT? If
yes what is the relevant clause?

27. ANSWER FOR Q1
➢ Cost overrun
- Contractor extend insurance policies (claimable)
- Contractor’s fault, employer has the rights to impose liquidated damages
➢ Time overrun
- Contractor claims for EOT
- New completion date
➢ Dispute (Arbitration)

28. ANSWER FOR Q2
➢ Certificate not given time
➢ Certificate no in the correct format
➢ Certificate issued by unauthorised person
➢ Addressee of certificate not named
➢ Decision to extend time improperly delegated
➢ Certificate not given fairly
➢ Contractual procedures not followed

29. ANSWER FOR Q3
23.8 (i)

30. THANK YOU