If you are an owner, a contractor or work in the construction industry, you are no doubt familiar with delays. Construction delays occur in commercial and residential projects and often cause a domino effect, resulting in significant lost revenues. In this post, our experienced New Orleans construction lawyers will outline five important things you need to know about construction delay claims.
- The contract will define “delay” and the scope of your rights in the event of a delay
As a general rule, delays are broken down into excusable or non-excusable delays, which may be compensable or non-compensable, depending on the circumstances and the specific contractual language.
- Excusable delays
are delays that are not a contractor’s fault or within the contractor’s control. Examples of an excusable delay may include weather, change orders, extra work to address an unanticipated condition, unforeseen site conditions or a labor dispute. An excusable delay may becompensable or non-compensable based on the contract language or the agreement of the parties. A non-compensable delay may occur when the parties agree that the delay was the result of an event that is beyond the parties’ control, and that a party will neither be compensated for additional work resulting from the delay nor penalized. A compensable delay is an excusable delay to the project schedule that results in the contractor being paid for the costs incurred to address the condition that caused the delay or for the additional work performed. Here, a well-written construction contract will contain language providing that a contractor is to be paid extra compensation (in addition to the agreed contract price) as a result of a change order or extra work arising from an unforeseen circumstance or as the result of differing or unanticipated site conditions.
- Non-excusable delays are delays that are the result of the contractor’s actions or inaction and are within the contractor’s control. Examples of a non-excusable delay may include poor scheduling or planning, inadequate project management, equipment issues or the failure to procure the proper materials. Non-excusable delays are generally non-compensable and usually the subject of claims against the owner or a contractor.
- More than one party may be responsible for the delay.
Consider that more than one party may be responsible for the delay. Examine the
role of the owner, engineer, architect and project designer. While often overlooked, an architect or engineer may be liable for delays and unanticipated costs as a result of errors and omissions in the plans and specifications.
- You may have to comply with certain prerequisites to filing a lawsuit.
Does your contract include notice provisions that must be satisfied before a party can seek compensation for delay? For example, a contract may require that a contractor give notice of a potential claim within 10 days of the act or event giving rise to the claim. Does the contract
provide for an opportunity to cure any defect caused by a delay prior to a damages claim being filed?
- An actionable delay may give rise to a vast array of damages.
You may be entitled to compensation for the losses you have incurred as a result of the delay. In legal terms, this compensation is called damages. An owner’s actual damages might include increased project management expenses; loss of use; lost rents or profit; and increased insurance costs or loan interest. A contractor’s actual damages may include increased costs for trailer rental, temporary facilities (portable toilets, fencing, telephone, site power and water), labor, materials, insurance, equipment rental or maintenance, and lost productivity. Calculating actual damages is a complex process requiring knowledge of accounting, project management, scheduling, estimating, critical path methods and efficiency analysis. Our New Orleans construction lawyers will work with you to assess your damages and, if necessary, consult with a damages analysis experts.
Construction contracts increasingly use “liquidated damages” provisions where actual damages can be difficult to calculate or impossible to ascertain. The contract may outline a specific sum of money for each day the project is extended past the contracted completion date.
- The vigilant often prevail.
As soon as a delay is suspected, begin documenting all construction activities as well as the impact of the delays on the project and labor costs. It is often the case that the party who maintains detailed documents of the day-to-day activities prevails in a construction delay
Contact an Experienced New Orleans Construction Delay Lawyer
Some construction delays may be avoided by anticipating problems and
adjusting construction schedules. To the extent that delays occur, it is to your benefit to have an experienced New Orleans construction lawyer on your team, from the outset, to help you navigate these common, but always complicated, scenarios. To contact one of our attorneys, use the email form on this page or click “Consultation” at the top of the page, or call us directly at 504.603.0675.