Woman signing construction contract with contractor to build a house

Extension of time clauses in building contracts

Ben Johnson ||

If you’re building or renovating, or working in the building and construction industry, it’s important that you know about extension of time clauses. An extension of time clause allows a party to a building contract to extend the time for completion of the building works beyond the original date of completion.

Extension of time clauses allow parties to continue project execution without financial penalties. In general, an extension of time is granted when the cause of the delay is beyond the parties’ control and interferes with the path to practical completion.

The validity of a claim for an extension of time under a construction contract depends on whether or not the construction contract contemplates the reason given for the extension. It is equally important to know the circumstances in which you are not entitled to claim an extension of time.

What are circumstances in which an extension of time be granted?

Construction contracts typically incorporate provisions defining the circumstances under which an extension of time may be granted. These provisions are as follows:

  • adverse weather conditions
  • adverse site conditions
  • delayed delivery of essential materials
  • variations that increase the scope of the work
  • latent conditions
  • changes in legislative requirements

Requesting an extension of time doesn’t grant an unrestricted privilege to the contractor to postpone the project without facing consequences.

What happens when there are multiple delays?

Multiple delays occurring at the same time are generally referred to in the contract as a concurrent delay. If one of the delays is a consequence of substandard performance, that party will be unable to claim an extension of time – regardless of whether the concurrent delay is impacting the date for practical completion. In circumstances where the concurrent delay isn’t a consequence of substandard performance, the causes of delay may be apportioned between the parties. An extension of time equal to the apportionment will be granted.

Parties must adhere to the provisions of the contract when seeking an extension of time for that claim to be valid. This assists with the management of any disputes or legal complications towards the end of a project.

Accordingly, the parties should carefully examine the contractual terms to confirm that the delay qualifies for an extension, and follow the precise steps laid out in the contract. Most contracts specify a timeframe within which a request for an extension of time is to be made. Often, this also includes a required notice period. Whether or not a time constraint for the provision of notice operates as a complete time bar to a claim for an extension of time depends on the particular drafting of the clause.

Complying strictly with these provisions is vital to ensure the validity of the extension of time claim. Failure to follow the provisions may lead to a complete bar to an extension of time claim altogether.

Many standard-form contracts also impose an obligation on the parties to take all reasonable steps to prevent delays and minimise their consequences.

For advice on whether you are eligible to claim an extension of time, please contact Coleman Greig’s Building & Construction Law experts. Our team regularly assist builders, contractors, developers and homeowners in the resolution of construction disputes.

Share:

Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.

Categories
Archives
Author

More posts

A guide to intrafamily adoption

Adoption is the process where a parent’s legal rights for their child are transferred to another person. The formal adoption of a stepchild or close relative is known as intrafamily adoption.

Passenger movement and visa data-matching by the ATO

Heading overseas for work or a holiday? Taxation issues, including tax residency, should be on front of mind when departing from or arriving to Australia. Why? Because the Australian Taxation Office (ATO) can follow your footprints and, if you’re not careful, spring unexpected taxes on you.

Is it really necessary for my executor to have so many powers?

People often question why the executor of their estate needs to have so many powers. Simply put – if your executor isn’t given any additional powers by your Will, then they are limited to what is set out in the Trustee Act. One area that this can lead to issues in, is the family home – particularly if beneficiaries aren’t in agreement.

Essential terms of a commercial lease

A commercial lease is a contract that details the rights and obligations of a tenant and landlord. So, what are the necessary terms of a commercial lease?

Responding to data breaches

In the final part of our four-part series on your business’ responsibilities related to cyber attacks and data breaches, Special Counsel John Bennett how businesses should respond to data breaches, including application and requirements of the Notifiable Data Breaches Scheme.

Security of personal information

Part 3 of a four-part series on your business’ responsibilities related to cyber attacks and data breaches where Special Counsel, John Bennett provides an overview of some court decisions and proceedings where ‘security’ of personal information has come into issue.

Parental alienation in Family Law

The concept, Parental Alienation Syndrome, was initially brought about by American psychiatrist Richard Gardner in 1985. The term parental alienation is used to describe a situation where one parent is involved in psychologically manipulating their child to turn against the other parent.

Are you liable for labour hire workers if they are injured?

Many employers (host employers) engage employees of labour hire companies, particularly in the building and construction, hospitality and manufacturing industries. However, what happens when one of these employees gets injured at the host employer’s work site? Who is liable for the injuries?

The risks with cyber attacks and data breaches

Part 1 of a four-part series on your business’ responsibilities related to cyber attacks and data breaches. Cyber attacks and data breaches are the top business risk in Australia according to Aon’s 2023 Global Risk Management Survey.

© 2024 Coleman Greig Lawyers  |  Sitemap  |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230