What Is Extension Of Time Claims In Construction?

What Is Extension Of Time Claims In Construction?

An Extension of Time (EOT) claims in construction is a request for a change in the scheduled completion date due to a delay that is not the contractor’s fault. The delay could be caused by natural events, owner-caused delays, or other factors outside of the contractor’s control. To qualify for an EOT claim, the delay must be considered an adverse weather event.

The contractor must submit two notices for an EOT claim: a notice of delay and the extension of time claim itself. If the EOT claim is not sent within the required timeline, the contractor may give up their right to further extension claims or damages related to the event.

When assessing claims for an extension of time, there may be multiple or concurrent delays, some of which are the contractor’s fault and some not. The contract administrator may review extensions of time after practical completion and further adjust the completion date.

Claims for extension of time can run alongside claims for loss and expense (relevant matters), however one need not necessarily lead to the other.

If allowed, an extension of time will extend the “date for practical completion” by the allowed delay period. This means if the contractor reaches practical completion later, they will not have to pay liquidated damages to the principal (at least, not for the delay associated with the allowed claim).

How Is An Extension Of Time Granted?

An extension of time is granted when it is evident that a certain project or task will be delayed due to events that are out of the contractor’s control.

When this happens, the contractor must provide written notification to the contract administrator detailing the event causing the delay.

If accepted by the contract administrator they may grant an extension of time and accordingly adjust the completion date.

Extension Of Time Claims Process

The process for filing an Extension of Time (EOT) claim is often outlined in the contract between the general contractor and the owner. The contractor must provide evidence that delays to the schedule have taken place and have impacted the project’s completion date.

This evidence should include details of any action taken to avoid or minimize delays, as well as a description of why the delay was not caused by the contractor.

If an EOT is approved, it will extend the “date for practical completion” by the allowed delay period, meaning that if the contractor reaches practical completion later, they will not have to pay liquidated damages to the principal.

However, extensions of time may be denied if they are caused by subcontractors or due to underperformance by the contractor.

It is important for contractors to understand how extension of time claims work in practice in order to protect themselves from delays and potential losses.

Having a rigorous system in place to govern EOT claims can help ensure that all parties are protected from delays and other issues associated with construction projects.

What Is The Time Limit For Filing An EOT Claim

The time limit for filing an Extension of Time (EOT) claim in construction depends on the contract between the contractor and the owner. Generally, contractors must submit a written claim within 28 days of when they should reasonably have become aware of the cause of the delay.

If a timely claim has not been made, contractors may lose their right to an EOT[. The process for filing an EOT claim is often outlined in the contract between the general contractor and the owner. Subcontractors are subject to the terms of their contract with the general contractor.

In some cases, if a delay is caused by the project owner or principal, this can also be covered by an EOT claim. To request an EOT in a construction contract, a formal letter is addressed to the contract administrator detailing why these delays need to be added to the schedule.

Does A Contractor Get Paid For An EOT Claim?

The payment a contractor may receive for an EOT (extension of time) claim is dependent on the terms of their contract. The contract may include a clause that prohibits any damages being awarded for a delay, commonly referred to as a “no damages for delay” clause.

The enforceability of such clauses depends on state statutes. Generally, contractors are not paid any additional expenses associated with the delay and are only granted a contract extension.

In situations where the force majeure clause applies, contractors may not be entitled to additional costs because it is believed that everyone is impacted by the delay in some way, and it is unfair to compensate one party over another.

In cases where compensation for delay is allowed, such as when the owner is responsible for the delay, contractors can only recover costs directly linked to the delay.

These expenses may include project management and supervision time, overhead costs, loss of use, rents, or profits, insurance costs, and construction loan interest. However, contractors must provide sufficient documentation to substantiate any additional costs for which they are requesting compensation.

In summary, whether or not a contractor receives payment for an EOT claim depends on the specific terms of their contract, including any clauses related to delays and compensation.

If compensation is allowed, contractors can only recover costs directly tied to the delay and must provide proper documentation to support their claim.

What Are The Different Types Of Extension Of Time?

Extension of time can be categorised into four distinct types: non-critical, critical, excusable and compensable. Non-critical delays are usually caused by minor events and do not affect the key performance criteria of a project such as cost, time or quality.

Critical delays are a result of more substantial events that have a greater impact on the overall outcome of the project. Excusable delays refer to unforeseeable or unavoidable circumstances outside of the contractor’s control.

Finally, compensable delays are when damages are paid for disruptions caused due to parties exceeding their contractual obligations. Knowing which type of delay you are dealing with will allow you to choose the appropriate course of action in your contract negotiations.