Professional Practice 2 (QSB60904)

P2 DELAYS AND DISPUTES

Ng Wai Khong
Hazim
William Goh
Definition
Delays in Construction
Breach of Completion
Categories of Delays
By Contractor
By Client
By 3rd Parties (Neutral Events)

PAM form clause 23.8: 24 related events, which entitles the contractor to EOT;
E.g.;
Force Majeure
Bad Weather
Delay by Client in handing over site
Re-nomination of NSCs
Breach of Contract by the Client
War Damages
Etc.
Caused by Clients and Neutral Events
Delays by Contractor
Insufficient Manpower and Machineries
Not having materials when needed
Poor site management
Failing to pay Workers
Contractual Effects
No Entitlement to EOT
No Reimbursement for Loss and Expenses
Client may Levy/Impose Liquidated Damages
Client may terminate employment of Contractor
Delays by Client
Not Issuing AI on time
Delay in giving site possession
AI for Discrepancies, Variations, Suspension of Works
Re-nomination of NSCs
Delay by Clients direct Contractor
Delay/ Failure to supply materials
Opening for inspection and testing
Prevention or Breach by the Client
Delay in giving site entry & exit
Executing works with insufficient provisional quantities
Contractual Effects
Contractor can claim for;
EOT
Loss and Expense
Client unable to Levy/impose for Liquidated Damages
Contractor may Terminate his Employment
Delays by Neutral Events
Force Majeure (23.8a)
Harsh weather (23.8b)
Loss and Damages caused by Fire etc. (23.8c)
Civil commotion (23.8d)
War damages (23.8n)
Changes in laws (23.8p)
Delays/Failure to by statutory bodies to carry out duties (23.8q)
Suspension of work by Statutory bodies. (23.8w)
Contractual Effects
Contractors can claim for EOT
But not Loss/Damages
Client unable to Levy Liquidated Damages
Both parties are to share the burden of delay.
Procedure For Extension Of Time
According to PAM Form Contract, there are 2 steps of procedure:-
(1) In Clause 23.1(a):
Contractor are required to provide a written notice to the Architect of his
intention to claim for extension of time within 28 days from commencement of
relevant event. The written application is a condition precedent to any Extension Of
Time.

(2) In Clause 23.1(b):

It stated that within 28 days of end of cause of delay, contractor are to submit to
Architect his subsequent official application and substantiation of claim to allow
Architect to assess any Extension Of Time to be granted.
Procedure For Extension Of Time
Step 1: Giving Of Notice
Things to be included :-
- In writing form.
- An initial estimate of Extension Of Time is required.
- All particulars of the cause of delay.

The notice to be given within 28 days of delay.

Procedure For Extension Of Time
Step 2: Official Application
Things to be included:-
- Application to be in writing.
- Relevant event causing delay.
- Effects of delay on work programme and progress of work.
- Number of days delayed.
- Steps taken to accelerate work.
- Reschedule of works programme.
- Supporting documents, records, details and other related documents.
- Number of days of Extension Of Time required.

It is important to include the content above to ensure that Architect to make reasonable and fair
assessment of delays.
Whether To Claim For EOT?
- According to PAM Form Contract, Clause 23.1, contractor may apply
for EOT.
- Up to the decision of contractor.
- If the contractors opinion that:-
(i) The completion of works is actually delayed.
(ii) The completion will be delayed.
(iii) The cause of delay is caused by the relevant events which stated
in Clause 23.8.
Failure To Submit Claim Application
According to Clause 23.1(b), contractor are to submit the final claim within
28 days of the end of cause of delay.

However, if the contractor fails to submit within the time frame or within any
extended date, it is deemed that:-
(i) The contractor has assessed the cause and decide that the completion
date will not be delayed.
(ii) The contractor have waived his right to any EOT.

Contractor may lose his entitlement owing to a mere procedural breach.

Principles for Granting EOT
Before granting EOT, the Architect shall:
Application must be in writing form.
Cause of delay must be within the provisions of contract (clause 23.8)
Contractor have taken all practical steps to mitigate delay.
Delays must have materially disrupted the regular progress of the
works, resulting in the completion date being breached.
Net effective delay must be assessed based on approved work
programme in relation to the whole of the works.
Issue of the Certificate of EOT
After Architect has completed his assessment, he has to decide:
To reject hence stating the reasons.
Grant an appropriate EOT and issue the certificate of EOT
Stating an analysis of each event causing delay, the number of days
granted, total number of EOT and the new completion date and a
break down of the event-by event with the relevant reason.
Timing of Issue
Within 6 weeks from the date of receipt of sufficient particulars.
If the Architect cannot issue EOT within 6 weeks, he shall inform the
contractor for an extension and get his consent.
If the Architect cannot determine the EOT required, he may issue a
provisional EOT and leave it for review after practical completion.
(clause 23.1)
Delay by NSC
When the Architect submits his notice of EOT granted, he shall give a
copy to any NSC affected.
The purpose is to forewarn the NSC so that he can also make a claim
for an EOT. (clause 21)
Obligation of Architect
The Architect must act reasonably and fairly.
Default in his duty, may lead to the EOT being invalidated.
Failure to access the application and issue EOT is a breach.
What if the Architect default in
granting EOT?
The Employer have no basis to deduct liquidated damages.
Breach of contract if Architect fails to grant extension in reasonable
time.
Architect may be liable to the Employer in tort and/or for breach of
contract.
What can the Contractor do initially?
To make a fresh application.
To appeal to the employer.
Contractor may opt to refer the matter to Arbitration as a last resort.
EOT after the issuance of Certificate
of Non Completion (CNC)
Architect shall grants EOT and new completion date fixed. (Clause
23.9)
Granting of such subsequent EOT shall revoke this CNC issued earlier.
(clause 22.3)
Employer to return any surplus liquidated damages retained.
If Contractor again fails to complete by the new completion date,
Architect to issue a new CNC.
Review of EOT After Practical
Completion
Architect may review and fix a completion date later than that
previously fixed. (clause 23.1)
Actions by Contractor After EOT
Granted
To extend insurance policies.
To revise master programme.
To extend performance bond.
QUESTIONS:
Question 1:
Q1. Initial checklist and the principles to be applied when assessing an
EOT application by the contractor;
Q1. Initial checklist and the principles to be applied when assessing an
EOT application by the contractor;

Application to;
Be in written form
State the Cause of Delays
State the effects on the work programs and progress
State the number of days delayed
State the steps taken to accelerate
Submit the rescheduled work programs
Include all supporting documents
State the number of EOT required.
Question 2:
Q2.
What are the purpose of an extension of time clause in most standard
contract and its implications? What is the implications of a Certificate of
Non-Completion? What is the difference between general damages and
liquidated damages?
 Answer
(i)If there is a delay, the completion date can be extended; Employer can now set a new

completion date; It preserves the employers contractual rights should he cause works

to be delayed by default; It prevents time for completion of works to become at large.

Employer can still claim for liquidated damages.

Liquidated damages are agreed amount of damages that are likely to be suffered in the
event of a
breach of contract while general damages are to be assessed and could be for any amount.
Question 3:

What are concurrent delays? Is the Contractor entitle to

Extension Of Time and Loss and Expense if there are
concurrent delays by Employer and Contractor?
What are concurrent delays?
Concurrent Delays is where in an event, the owner caused delay and
contractor caused delay, affect the same activity or different activities on
parallel activity paths which are equally critical, and as such the owner
caused delay and the contractor caused delay would each have delayed the
completion of the project.

It is also described as circumstances when different causes of delay overlap

during a period of time. Under the premise that where both parties to the
contract caused delays to the overall project, neither party can recover
damages for that period of time when both parties were at fault.
Is the Contractor entitle to Extension Of Time and Loss
and Expense if there are concurrent delays by Employer
and Contractor?
Based on Clause 23.8(j), delay on part of craftmen, tradesmen or other
contractors employed by Employer.

The Contractor can claim EOT, as for Loss and Expense shall be the Loss
and Expense that can be claim which cause by the Employer.
Question 4:
In contrast to the delays in PAM form, what are the types of Delays
stated in the JKR form?
 Answer
Force Majeure; JKR 43.1(a)
Exceptionally Inclement Weather JKR 43.1(b)
Suspension of Works by SO JKR 43.1(c)
Disputes with Neighboring owners JKR 43.1(d)
SOs instructions issued under clause 5 JKR 43.1(e)
Delay/Failure to Issue Instructions JKR 43.1(f)
Delay in giving site possession JKR 43.1(g)
Delays on part of artists, tradesmen JKR 43.1(h)
Inability to secure goods, materials & services JKR 43.1(i)
Delays on part of NSCs JKR 43.1(j)
Question 5:
Within how many days the contractor are required to submit his final
application claim for extension of time along with all supported
documents?
 Answer

Within 28 days of the end of the clause of delay.

Question 6:

If the Contractor planned to finish its work before the completion date, but
events where the Employer was held responsible for prevented the early
completion of the project, may the contractor recover delay damages from
the owner even if it finishes the project by the date specified in the contract?
May the contractor recover delay damages from the
owner even if it finishes the project by the date
specified in the contract?
In Grow Construction Co. v. State, 391 N.Y.S.2d 726 (N.Y. A.D. 1977), the
contractor was delayed by state interference. The contractor sued the
state of New York for delay damages despite the fact that it was able to
finish the work by the date specified in the contract. The state of New
York argued that the contractor could not recover delay damages
because the job was completed on time. The court rejected the states
argument, reasoning that the contractor had a right to perform its work
free from interference from the state, and to finish early if possible.
May the contractor recover delay damages from the
owner even if it finishes the project by the date
specified in the contract?
Other courts have adopted similar reasoning. See Sun Shipbuilding &
Dry Dock Co. v. U. S. Lines, Inc., 439 F. Supp. 671 (E.D. Pa. 1977). Courts
that allow contractors to recover delay damages despite timely or early
completion, however, require the contractor to prove that early
completion would have occurred but for the owners delay.
Additionally, notice to the owner of the contractors intent to complete
the work ahead of scheduled is often required. Where a CPM schedule
is initially utilized to establish an early completion date and it is logically
consistent, the schedule is strong evidence of a reasonable intent to
complete early.
May the contractor recover delay damages from the
owner even if it finishes the project by the date
specified in the contract?
Yes, completing the project by the date specified in the contract does
not necessarily prevent the contractor from recovering delay damages
so long as the contractor could have reasonably finished by an earlier
date. (United State Law)

No, because no actual loss cause by Employer, so they could not claim
for delay damages. (UK Law)