As we all know, most construction or EPC contracts contain a â€œbad weatherâ€ clause that stipulates the Contractors’ entitlement to an extension of time and/or money, in the event that exceptionally inclement weather delays the project.
Typically these are classed as â€œneutralâ€ events, that is the Contractor will receive an extension of time and relief from liquidated damages, but not the recovery of any of its additional costs, i.e. you get the time, but no money.
But what happens if the contractor is only working in this period of bad weather, as a result of an earlier delay, for which the owner is responsible for? Well, assuming the EPC contract only entitles you to an extension of time for bad weather, then this is where it gets interesting.
The contractor will need to demonstrate that the sole reason that the work is now being carried out in the period of bad weather, is due to the earlier owner-caused delays. Put simply, he will need to demonstrate cause and effect, and prove that if the earlier delay had not occurred, then the current work being carried out would not have been affected by the weather in question.
By way of example, we recently worked on a major offshore project, where the delays in the engineering phase caused by the owner resulted in the sail away date from the yard to the offshore location now being in a period of bad weather i.e. in December as opposed to September. Clearly, working offshore in December comes with considerably greater safety concerns and other additional risks, as well as further expense, than it does in September. So it was decided to reduce the risk, re-schedule the work and wait for more favourable weather in the March of the following year, before sailing away from the yard. This was the most pragmatic and risk averse solution for all concerned.
Put simply, the owners’ early engineering delays had resulted in the sail away not being feasible as planned and a delay was suffered as a consequence. We managed to demonstrate a causal link from the earlier delay and show that the delay to sail away was also caused by the early engineering delays. The same logic can apply to any construction project where later work is delayed and is now carried out in the winter, for example if owner caused delays in the excavation work, now causes concreting work to be carried out in the winter period, and productivity is lost due to inclement weather, then these delays are as a result of the earlier (owner caused) excavation delays.
The owner will in essence be responsible for the damages that flow from the event if they were reasonably foreseeable. Therefore if you want to claim money, as well as time, you must show the early delay is the responsibility of the owner and evidence a direct link to the later delay.
Unfortunately, if you cannot show a direct link, then you will have failed to demonstrate cause and effect and your claim will fail!