Can the contractor risk being late?

Concurrent delay is complex, controversial and rarely dealt with in contract conditions (even FIDIC leaves it to special conditions). But before you can begin to grasp the issues in a much-talked about recent case let’s review some basic principles:

The prevention principle

The essence of the prevention principle is that the promisee [ie the employer] cannot insist upon the performance of an obligation which he has prevented the promisor [ie the contractor] from performing….” Multiplex v Honeywell [47]

In practice this means “the employer cannot hold the contractor to a specified completion date, if the employer has by act or omission prevented the contractor from completing by that date. Instead, time becomes at large and the obligation to complete by the specified date is replaced by an implied obligation to complete within a reasonable time. The same principle applies as between main contractor and sub-contractor.” Multiplex at [48]

Why does it matter in the context of concurrent delay? “It is in order to avoid the operation of the prevention principle that many construction contracts and sub-contracts include provisions for extension of time. Thus, it can be seen that extension of time clauses exist for the protection of both parties to a construction contract or sub-contract.” Multiplex at [49]

Concurrent delay

Concurrent delay is

a period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency” John Marrin QC article

Concurrent delay is treated under English/Welsh law as providing the contractor with time (and so avoiding delay damages) but not money. Under Scots Law the consequences on time and money are apportioned.

In Jerram Falkus the court said if there were two concurrent events, one the contractor’s fault the other said to trigger the prevention principle, “the principle would not… be triggered… [as] the contractor could not show that the employer’s conduct made it impossible for him to complete within the stipulated time.” [50]

What should you do?

There has long been a debate among lawyers as to whether the contract administrators should use their discretion to determine any extension of time based on all the circumstances – including overlapping delay events – or whether the contract should define concurrent delay and pass the risk to the contractor. In North Midland v Cyden the parties agreed the latter which resulted in a dispute…[read more].

Which would you prefer?

Dubious discretion or inflexible interpretation?

Cases: Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No. 2) [2007] EWHC 447; North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on LinkedIn
Share on pinterest
Share on Pinterest

Leave a comment