Owners often want their construction projects completed by a set deadline and will ask for a completion date to be included in their contract. Although you may have every intention of completing the project on schedule, there are, of course, numerous issues that can arise during the course of the project that may preclude timely completion. A contract that’s vague about completion consequences and extenuating circumstances will almost assuredly lead to disagreements.
One tip is to clearly identify the circumstances that will excuse timely performance. Typical circumstances include weather delays, governmental issues, and materials shortages - in other words, things that are beyond the contractor’s control. As a contractor, you should be excused from performance for circumstances that are beyond your reasonable control. Although this makes practical sense, you could still be held responsible for non-completion if your contract doesn’t clearly state these exceptions.
Another thing that should excuse completion under the original time frame is any owner-requested change order. The additional time to complete the new work in the change order should be added to the total time to complete the project. The best way to document this is to specify the additional time in the change order. For instance, if the change order will add an estimated two weeks to the project (due to materials procurement, additional labor, etc.) then the change order should include a provision that the project completion timeline is being extended for two additional weeks. The owner should sign off on the change order to acknowledge this contract amendment.
Finally, it’s important to note how a court will view any disputes about timely completion. Although a contract may specify a completion deadline, it typically does not specify any penalties for failing to meet this deadline. This makes it difficult for an owner to claim monetary damages due to the breach since a party who breaches a contract is typically only responsible for any direct and foreseeable damages resulting from the breach (and how do you quantify any direct or foreseeable damage from a small-time delay?) Thus, an owner typically lacks any real legal recourse unless your contract specifies a per-day (or other) monetary penalty for non-completion.
At Downs Law, we understand that construction agreements can be confusing - but they don’t have to be. In our free e-book, we’ve taken 10 important contract provisions and distilled them into plain, understandable language. You will be able to use these as a guide to determine whether your contract is on solid footing, or whether it needs more attention. And as always, we’re here for you if you need help. Contact us!