dispute resolution or suspension by Owner under § 11.1;
(e) transportation delays not reasonably foreseeable; ( f)
labor disputes not involving Constructor; (g) general
labor disputes impacting the Project but not specifically
related to the Worksite; (h) fire; (i) terrorism; (j) epidemics;
(k) adverse governmental actions; (l) unavoidable
accidents or circumstances; (m) adverse weather conditions
not reasonably anticipated. … (Emphasis supplied).
There is ample case law addressing the language of the AIA
document. The reason we said above that the contractor probably
will be in good shape with this language is partly on account of
the case law, but mostly because of the human factor. Most of the
published cases address situations that are unknown to the general
public and fact-finders (judges, juries or arbitrators) who will
be charged with determining whether an event falls into the AIA
definition of one justifying an extension of time. For example, if
a labor strike in a foreign country causes a shortage of materials,
the fact-finder likely has never heard of, much less been affected
by, the event. On the other hand, very few people on the planet
will not have heard of or will not be affected by COVID-19, and it
seems likely that few will hold the view that a contractor should
have seen it coming, much less could control it. We expect factfinders
are likely to excuse delay that can be directly or indirectly
traced to COVID-19, and probably, to an extent, the time period
during which the outbreak hit.
The ConsensusDocs provision appears even more likely to
permit a time extension, not only because of the specific reference
to “epidemics” and “transportation delays not reasonably
foreseeable,” but also the general reference to “unavoidable accidents
or circumstances” and in the preamble the use of “by any
cause beyond the control of Contractor” followed by “examples
… include but are not limited to ….” Any upstream party who tries,
several years from now, to convince a judge, jury, arbitrator or any
reasonable human being that COVID-19 does not fit this definition
is likely spitting into the wind.
If you have one of these provisions, does this mean that you
can give your customer or upstream party the one-fingered
salute when it gets demanding? Of course not. Even if you might
get off the hook for delays on an individual job, you are likely to
lose future business unless you follow item No. 1 above: BUILD
YOUR RELATIONSHIPS.
We have seen some owners, particularly public owners whose
contracts often are not negotiated, insert clauses that may not
alter the scope of events entitling the contractor to a time extension,
but require the contractor to prove that it did everything it
could to avoid or minimize the delay. Contractors should beware
of such additions, but if they exist, the contractor should make
sure it complies with the provision.
b. For sub (usually individual trade) contractors:
First, any minimally sophisticated subcontract we have seen in
the commercial world contains a “flow-down” clause that binds
the subcontractor to perform for the original contractor all
provisions of the contract between the original contractor and
the owner related to the subcontractor’s work. This is a broad
requirement and assuredly includes the time within which the
subcontractor must perform.
In addition to the applicability of the original contract requirements,
subcontracts often contain other, more stringent, provisions
for the subcontractor’s performance. Depending on the
customer, subcontractors may be starting with a standardized
form (i.e., AIA A401-2017) or, oftentimes, a general contractor’s
proprietary form.
As a general rule, the subcontractor should negotiate a force
majeure provision that is at least no more stringent than the
original contractor’s obligation to the owner. However, if there
are events occurring in the world affecting its trade about which
the subcontractor knows but the upstream party(ies) may not
know, it is important to raise these items at the time of the
contract and to work them into the subcontract. That said, few
if any people saw COVID-19 coming as fast as it has. We should
learn from that and seek to insert, at all levels, a broad clause
providing that matters outside the control of the performing
contractor entitle it to an extension of time to complete
its work. t
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