Extension of time! What EOT? The owner is driving us to a construction dispute!!
Our experience of construction dispute on projects has taught us that some owners don’t play by the rules and avoid awarding an extension of time at all costs. Or, at least, they like to bend the rules to suit them.
Here, I take a look at the tactics owners use that can force a contract into a construction dispute, resulting in the contractor incurring substantial additional costs, whilst souring the relationship between contractor and owner.
I consider there to be five telltale signs that a project owner is not playing it by the book and thereby putting your project at risk and potentially heading to a construction dispute.
Number 4: not agreeing to an extension of time and the money impact of changes
Where an owner acknowledges reports of delays or changes, they still might distract from the running of the project. They may do so by refusing to agree with a contractor’s request for an extension of time or his valuations of variations or claims, by either requesting unrealistic additional detail or information, or by blatantly refusing to deal with these issues during the project. Owners sometimes prefer a “wait and see” approach and let the contractor finish all the work before addressing any impact in terms of extension of time in particular, this contradicts most forms of contract which state that issues should be notified and dealt with during the currency of the project.
Such cases might involve an owner attempting to force a contractor to finance the changes to a contract, enter into to mitigation measures due to the lack of an extension of time or promising to ‘do a deal’ at the end of the project – rarely does a deal at the end favour the contractor, the time when he has the least commercial leverage.
In the final part in this series of blogs, I’ll explain what you can do if this does occur.