If you are involved in a southern California construction project or land development venture and progress grinds to a halt due to a problem or dispute, you probably do not care to spend a lot of time and effort determining who is to blame. You simply want the project to get moving again.
Remember that everyone involved in the construction has a vested interest in the project proceeding on time and as planned. Everyone involved has a vested interest in on-time payment. So when there is a problem with either, someone (or everyone is going to have a problem with the situation). These two issues are amongst the most highly litigated issues in relation to construction projects. Many construction projects involve the use of expensive equipment, massive overhead costs, a notable amount of experienced and highly trained manpower, and large payrolls for the contractor and various subcontractors involved. The longer the job takes, the more costly all of these elements of the job become – thus the high likelihood that delays in performance or pay could quickly become a litigated matter.
Tackling (And Avoiding) Contract Performance Delays:
- For all the reasons listed above, contractors and owners both often require very well planned and potentially complex timelines/schedules for construction projects. There is a reason for this. Don’t fight the paperwork. A thorough schedule allows for planning, work sequencing, etc. It can also provide protection from liability for issues resulting from delays. It is also useful in determining the cause or (responsible party) for delays in the project.
- Once a schedule is created – stick to it. In order for it to fulfill its many purposes, the schedule should be constantly monitored and updated.
- The schedule is also a vital element when attempting to determine whether a delay is excusable or inexcusable.
- Determining whether a delay is excusable or inexcusable is the first step in determining whether a delay is compensable. Compensable delays are usually those that were not anticipated prior to contractual agreement and that the owner or someone under the owner’s direct supervision is responsible. In these cases, contractors may be entitled to recover money damages to assist in or cover extra costs associated with the delay. They can also be compensated for the delay through the receipt of a time extension.
- The original (and as necessary – updated schedule) is also a vital element in dealing with concurrent delays. When two or more unrelated delays affect work simultaneously, they could originate with a number of sources (i.e. the same party, two or more parties, or a non-party such as the weather). In most cases, the delays come from different sources.
- When attempting to handle the difficulty of calculating damages, many prefer to include a provision in the original contract (a pre-set or liquidated damages). They are often based on a “per-day delay” basis. Collecting liquidated damages in response to project delays negates the party’s ability to collect actual damages.
For additional information on the above contract performance delay issues or to discuss additional concerns not listed in this summary list, please get in touch with on of the experienced business and real estate attorneys at southern California’s The Law Office of Retz & Aldover LLP.