Extension of Time and Delay Analysis - Essay Example

Harris Kamran Contract Law 21 August 2007 Extension of Time and Delay Analysis The term "completion of a contract" could have many meanings depending upon the context in which it is used. In case where it implies the completion of the whole assigned task, it has attached to it specific obligations of the contractor and the employer as par the express or implied terms in the contract, upon failure of which regulations would be made concerning the delay and time extension in the contract. In the event of any extension of time, there are certain factors which have to be viewed before any claims for liquidated damages could be made. If no specific date for the completion of the project was set in the contract, it is known as "time at large", and in such cases the Director of Budget and Fiscal Services specifies a realistic time period for the completion of the project in lieu of the current conditions. If a delay is made, the contractor can argue against any charges as no deadline was set in the first place. If a specific date was set, then the obligations of the employer and the contractor have to be taken into account. It is the obligation of the employer to make a timely provision of any services and goods that have been specified in the express terms of the contract. If he fails and there is a delay, he is not eligible to make any deductions as liquidated damages. If the delay is due to any hindrance posed by the employer in the proper execution of the contract by the contractor, such as interruptions made by any sub-contractors hired directly by the employer, the employer loses his right for any liquidated damages. The obligations of a contractor are to finish the project within the deadline, with "efficiency and diligence". This means that the contractor has to work continuously and in accordance with the approved plan towards the deadline. If he fails to do so, and there is a delay, the employer will be compensated through liquidated damages. However, if the employer has been pressing for unrealistic acceleration, the contractor has a right to file a case against the employer on this ground, and the employer might lose his right toward the damages. If the contractor, due to any reason, refrains from exercising his right, he is denied any compensation and the employer will be eligible to carry out deduction for the damages. If the contract has a clause for extension of time, but it has been exhausted, or if there is no such clause in the contract, and further extension needs to be carried out, an approval by the Director of Budget and Fiscal Services is required before any such steps can be taken. However, it can only be done under certain conditions: the period of any further extensions can be no more than one hundred and eighty calendar days; the commanding officer of the contract assigned by the Director draws a written statement that any new contracts cannot be allocated at the time of the completion of the pertinent contract, due to reasons such as short- term need of the service, and limitation of the execution of the contract at he time of the completion of the current contract; there is an general consensus by all the concerned parties regarding the extension in time of the contract; and the price of the extended contract is the same as the original contract, or as changed in the contract before the deadline, or if neither of the cases, then it be realistic, reasonable and fair. In case of any delay, the contractor should provide a notice to the employer or the Director within ten days of the delay to validate the extension of time in the contract. If he fails to do so, the contractor is liable to pay an ascertained sum of money to the City for every calendar day after the original deadline of the contract until the project is completed and accepted by the City, and the damages paid for, or a fair time has been passed after the expiration of the contract, as ascertained by the Director. If the contractor has been notified of the charges against him, concerning delay and hence, nonperformance, and is asked to provide a remedy for it either in the form of services or goods, and he fails to comply by the notice, he is liable to pay a set sum of money to the City as penalty and liquidated charges, if he is terminated, until the officer in charge as assigned by the Director receives similar satisfactory services and goods from some other source; and if not terminated, until he himself has provided satisfactory services and goods as remedy for delay in the contract. However, if the contractor if not terminated and is excused for his nonperformance by the officer, he is obligated to pay the penalty to the City. However, he will still be liable to pay any overhead expenses and dues resulting out of the delay. Appraisal: the discussion above on the extension of time and delay in contracts draws much of its principles from the Australian principles regarding the topic, such as the prevention principle concerning the rights of the contractor if the delay has been due to any hindrance posed by the employer. It has been agreed upon that such principles, in their entirety, shall not be incorporated in the English Law regarding time extensions in contracts. However, in many cases, the prosecution and the opposition rely heavily on these principles. Therefore, in the recent English Law, it has been suggested that in general, these principles are binding upon all the concerned parties, however, their interpretations and usage shall be based upon the circumstances and the nature of the specific cases. These principles, hence, still form the basis of modern English Contract Laws. Opinion: in my opinion, these laws are quite fair. However, unless proper research into the clauses of the contract are not made, and calculations for the liquidated damages are not carried out in light of the express terms of the contract_ which at times becomes very complicated and difficult, especially if the contract does not refer to any specific program in calculating the deductions for the delay damages_ a lot of issues can arise regarding the decisions of the officer in charge and the Director, as legal and official definitions of the certain terms in the contract, like "completion" and "prevention principle" as par the English Law, have not been agreed upon and determined by the authorities, and hence, much of the workings of the law regarding time extensions remain based on the prevalent conditions and the situation of the pertinent contract, and rely heavily on the express terms of the contract rather than the implied terms as is the case in other contracts such as tenancy contracts. That said, however, this very feature of the law provides flexibility in solving delay and extension cases that require customization and special attention. References Daniel Atkinson, D.A., (2 July 2006, updated 8 April 2007). Delay and Disruption- Employers Delay and the Right to Liquidated Damages. Retrieved 8/21/2007 from Read More