Problem: a sub-contractor was in delay in completing its works and the contractor subsequently instructed a variation to such works after the estimated date for completion. The variation gave the sub-contractor an entitlement to an extension of time. The sub-contractor argued that the extension of time should run contiguously (i.e. from the date of the estimated date for completion), however, the contractor argued that the extension of time should run non-contiguously (i.e. from the date that the variation was instructed).

The contractor’s reasoning for presenting such a novel argument was that the sub-contractor could be exempt from liability for the period of time in which it was in culpable delay and may be liable for a period when it was not in culpable delay. Consequently, the contractor argued there was a risk that the losses payable by the sub-contractor may not reflect the losses actually incurred. [Note: unliquidated losses were being sought as the sub-contract did not include an LAD (Liquidated an Ascertained Damages) provision].

Which party do you think was successful in its argument?

Answer: the Courts found in favour of the sub-contractor and so any period of extension granted will be added to the end of the current period within which the sub-contractor is required to complete its works. There was no provision in the sub-contract which permitted the contractor to award a non-contiguous extension of time. If this was required then the sub-contract should have expressly provided for this.

Going forward: if a contract does not include an LAD provision and this issue is a concern then the contract (or sub-contract) should be amended to provide the grant of an extension of time non-contiguously and/or the recovery of losses by apportioning delay related losses between the parties responsible for the delay.

Case reference: Carillion Construction Limited v Emcor Engineering Services Limited and Anor [2017] EWCA Civ 65

This post was written by Christian Mulvihill.

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.