At least one-third of UK construction projects finish late – not against their initial schedule but against the extended one! What this means is that time is less important – or at least less prioritised – than time or money.

[You do need to determine which is the client’s key objective: is it time, cost, quality or something else? This hugely influences decisions on how changes are managed during the task or project.]

Nonetheless any contract needs to reflect you/your client’s desire for the goods, works or services to be completed within a specific period. Not all clients have any particular date in mind – a home-owner having a porch rebuilt may not be that bothered, but they still want to mark the date on their calendar. Business clients tend to take a different view as the success of the project can depend on meeting dates agreed with others such as banks funding the project, anyone looking to buy or move into the property, or their staff who are being disrupted during the works.

Jargon to avoid

A serious mistake in contracts is to copy legal jargon that you don’t fully understand.

For example, when I started working on the FMB contracts they said that time was not an essential term – a simplified version of the phrase ‘time of the essence’. But ‘time of the essence’ has never been relevant to a building contract! Simplifying useless jargon is not useful.

‘Time of the essence’ means you/your client would have the right to cancel or terminate the contract if the goods, works or services were performed or completed late ie beyond the agreed schedule. That phrase might be highly appropriate for perishable goods, but it doesn’t really relate the complex long-term projects like those in the construction or engineering sector.

As you don’t need a right to reject for late completion, your contract doesn’t need this jargon.

The approach construction contracts use for delayed performance or completion is (1) to extend the date for completion/works period for specific risks and (2) a remedy requiring the supplier to compensate you/your client for delays caused by other risks.

Your contract could provide:

  • a start date for the scope – or how much notice you/your client will give its supplier to start,
  • a series of interim/stage dates showing when specific elements of the scope have to be performed or completed, or when they have to meet a specific condition,
  • a progress requirement (construction contracts may refer to a supplier doing so ‘regularly and diligently’ or to meet the schedule),
  • a proposed completion date or a works period/duration for the whole scope, and
  • a process to move the completion date or extend the works period/duration when necessary.

What should you do?

You don’t have to include a start date, progress requirement or completion date. If you don’t then English law (case law or statute) will imply a term that the supplier will provide the goods, works or services within a ‘reasonable time’. This means it will progress neither negligently or unreasonably – good luck working out what that means without a lawyer or judge!
So include a realistic schedule for starting, progressing and completing the scope, as it will manage expectations and give you both something to aim for.

This post is based on a chapter in four of the books in the series on Construction Contracts in Just 500 Words (Chapter 10 for subcontract agreements and small works, Chapter 13 for letters of intent and Chapter 15 for consultant appointments). Each of these chapters also illustrates the perils of getting it wrong, based on a real-life case study, as well as how you can write it simply.

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