In our last post, we began looking at the topic of construction delays, particularly the potential costs they can have on those participating in a construction project and the potential difficulties of sorting out who is liable when a delay occurs.
As we mentioned last time, concurrent delays can be particularly complicated, since they involve two independent causes of delay and sorting out responsibility for the resulting costs can be difficult. In some cases, concurrent delays can raise the issue of float or slack time ownership. Float time is time built into a construction contract to give contractors wiggle room to complete the various phases of the project without causing an overall delay. Significant costs aren’t typically incurred unless there is an overall project delay, so it usually isn’t until float time is used up that significant costs are incurred.
Float ownership can belong to either the property owner, the general contractor, or to both parties. Float ownership is important because it determines who is responsible for the costs of an overall project delay and determines whether a contractor is able to receive additional time to complete work. Parties to construction projects should be clear about float ownership in the construction agreement.
In addition to float ownership, concurrent delays can also raise the issue of delay apportionment. This refers to whether responsibility for a delay may be apportioned between parties.
Whenever a significant project delay occurs, sorting out who is liable for the resulting costs is critical for recovering the costs associated with the delay. Because of the possibility of significant project delays occurring and because of the potential costs they can have, it is important for owners, contractors and other parties to carefully spell out how to determine liability for delay costs.
Contractors and owners can protect themselves by clearly spelling out in their written agreements how to address delays when they occur, carefully documenting all delays, and providing the other party notice of any delays as they arise. Working with an experienced attorney can help ensure a party’s rights are protected.