Copying clauses on concurrent delay

If you understand the principles on concurrent delay then you might also be aware of the debate whether the contract should define concurrent delay and pass its risk to the contractor.

In North Midland v Cyden, the parties amended the standard JCT contract to require:

  • the contractor to make reasonable and proper efforts to mitigate delay [2.25.3] and
  • ‘any delay caused by a Relevant Event which is concurrent with another delay for which the contractor is responsible should not be taken into account.'[]

In the High Court, the judge said that the contract was “crystal clear”. He said “there is no rule of law… that prevents the parties from agreeing that concurrent delay should be dealt with in any particular way….” aka

Do not whine. Read before you sign.

Party autonomy and freedom of contract is paramount.

In the Court of Appeal, Coulson LJ said that the clause was “unambiguous. It plainly seeks to allocate the risk of concurrent delay to the [contractor].” The court listed five reasons why the prevention principle would not ‘rescue’ the contractor from a clause to which it had freely agreed:

  1. the prevention principle is not an overriding rule.
  2. it does not apply on the facts as the contract provided for an extension for the employer’s acts
  3. it has no connection with the issues on concurrent delay
  4. the added clause [] was intended to reverse a specific case, not the prevention principle
  5. the parties can contract out of the prevention principle and clearly had!

What should you do?

The probable result of this case is that lawyers will add clauses into construction contracts passing the risk of delays caused by employer events to the contractor, where there are concurrent contractor delays.

The definite results of that approach are that:

  • the clause will have a significant impact on passing risk of delays to the contractor. It is extremely rare that delay events occur in isolation.
  • contract administrators may find it hard to extricate the employer events for which the contractor no longer gets time (due to concurrent contractor delays) from those for which the contractor is entitled to an extension.
  • the contractor will be even more keen to avoid conditions precedent on extensions (which could futher reduce its right to relief) and delay damages (which are now more likely to apply).

So please please please think very carefully before adopting this significant transfer of the time risk into your contracts.

Cases: North Midland Building Ltd v Cyden Homes Ltd [2018] EWCA Civ 1744

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