Delay is a persistent source of disputes in the construction industry. Sophie Bennett, Associate at Holmes & Hills Solicitors, examines the key delay mechanisms under JCT Design and Build 2024 (DB), highlighting notable features and practical considerations for employers and contractors alike.
At the heart of the delay regime is the contractual Completion Date, stated in the Contract Particulars. The Contractor is obliged to complete the Works, or any Section where sectional completion applies, by this date. Where delay occurs, the contract provides a mechanism for adjusting the Completion Date through extensions of time (EOT) under clause 2.25.
The Contractor must give notice to the Employer whenever it becomes ‘reasonably apparent’ that the progress of the Works is being or is likely to be delayed. This notice must identify the cause or causes of the delay and, where the cause is a Relevant Event, must include particulars of the expected effects and an estimate of the expected delay. Importantly, the obligation to notify is ongoing: the Contractor must keep the Employer updated as circumstances change and must provide further information as reasonably necessary.
This can be further complicated by the addition of a condition precedent to the clause. Wording may be added that means that, in the event the Contractor does not notify the Employer of such delays, it is barred from an extension of time. This wording is not always signposted as ‘this is a condition precedent’, but can be more subtle. Contractors should take care where an obligation to act is linked to a specific outcome. “Provided that” or “to the extent that” may be used to oblige the Contactor to notify of delay, and may amount to a condition precedent.
Extensions of time may only be granted where delay is caused by a "Relevant Event" as defined in clause 2.26. The list of Relevant Events under DB includes, among others:
The list of Relevant Events is frequently amended by a schedule of amendments so care should be taken to review each Relevant Event and the specific wording thereof to ensure that there is an agreed understanding between the parties on what does and does not constitute a Relevant Event.
The parties should consider definitions of adverse weather conditions and force majeure as these are particularly nebulous Relevant Events that both sides would benefit from clarifying.
Upon receiving the Contractor's notice and supporting particulars, the Employer is required to give an extension of time by fixing a later Completion Date where it is fair and reasonable to do so, having regard to any delay caused by a Relevant Event. The Employer must make this assessment whether or not the Contractor has complied strictly with the notice requirements, although this is often amended so parties should review these clauses carefully.
The Employer must notify the Contractor of its decision within eight weeks of receiving sufficiently detailed particulars, or receipt of further information.
If the Contractor fails to complete by the Completion Date (as may have been extended), the Employer may issue a notice of non-completion under clause 2.28. This notice is a prerequisite to the deduction or recovery of liquidated damages under clause 2.29. The rate of liquidated damages is stated in the Contract Particulars and represents a pre-agreed measure of the Employer's loss for late completion.
Should a further extension of time be granted after a notice of non-completion has been issued, the Employer must re-issue the notice to reflect the revised Completion Date. Any liquidated damages overpaid must be repaid to the Contractor.
There is a separate mechanism for liquidated damages that can be amended so parties will need to review this carefully. Levying liquidated damages against the Contractor requires three notices to be issued by the Employer:
Once a Non-Completion Notice has been issued, the Employer needs to notify the Contractor before the final date for payment that it intends to withhold, deduct or may require payment of liquidated damages. Subsequently, but at least 5 days prior to the final date for payment, the Employer mist notify the Contractor that it is withholding, deducting or requires payment of liquidated damages. Such notice must include:
DB 2024, in common with earlier editions, does not contain an express provision addressing concurrent delay where an Employer risk event and a Contractor risk event cause delay at the same time. The prevailing judicial approach suggests that the Contractor is entitled to an extension of time but not additional monies. Parties seeking greater certainty should address concurrency expressly through amendments to the contract.
The delay provisions of DB 2024 provide a broadly balanced framework for managing the consequences of delay. However, their effective operation depends on good record-keeping and the administration of the proper notices by both parties. Understanding the interplay between notice obligations, Relevant Events, and liquidated damages remains crucial for the successful delivery of design and build projects.
From the firm’s seven offices across Essex and Suffolk, our specialist Construction team provides services to clients which are based across the whole of the UK in addition to those across East Anglia, the South East and in London. Contact our team today.
Call us on 01206 593933 today to speak with one of our construction law solicitors. Or complete the form below.
Disclaimer
The content of this article is provided for general information only. It does not constitute legal or other professional advice. The information given in this article is correct at the date of publication.
A Mackman Group collaboration - market research by Mackman Research | website design by Mackman
