What You Need to Know About Delay Claims and How to Prove or Defend Against Them

With over 700,000 construction companies in the US, dealing with delays and cancellations of projects is a daily routine for some. A single construction delay can cost owners and contractors an additional 30% of the total project cause.

If you’ve been caught in a similar situation, here’s everything you need to know about delay claims:

Damages That a Contractor Can claim

Apart from genuine issues, delays in projects are usually caused by either of the two parties involved. If the delay caused was due to the owner, contractors can claim for:

  • Overheads
  • Project Management Expenses
  • Loss of Rent
  • Loss of Use
  • Insurance Cost
  • Lost Profits
  • Construction Loan Interest

Damages That An Owner Can claim

However, often, issues are caused by the contractor due to budget or planning issues. This gives the owner the right over the following claims:

  • Extended General Conditions
  • Supervision Cost
  • Liability Insurance
  • Jobsite Trailer Rental
  • Temporary Facilities/Utilities
  • Filed Labor
  • Equipment Maintenance or Rental Cost
  • Increased Material Cost
  • Lost Productivity
  • De-Mobilization
  • Hourly Labor Rate

Prospective Defenses to Construction Delay Claims

Whether a contractor is being accused of a delay claim or fighting for one, understanding its viability is very important. Here are five prominent defenses against a construction delay claim:

Concurrent Delay 

Concurrent delay is when many activities affect a project’s timeline without stacking up on one another. The delays don’t have to happen at the same time.

If the delay was concurrent, that could be used as defense along with evidence.

No Damages for Delay Clause 

Since delays are prevalent, many construction companies include a “no damage for delay clause” in their contracts where any delay costs must be written off.

However, how well this clause can be enforced varies based on different states. Therefore, study your state to create a defense strategy.

Improper Notice 

Construction contracts are all about notice requirements. As they firmly believe in the “no notice, no claim” policy, and courts abide by these notices. Anytime a delay occurs, you must send a notice to the GC or the owner as a contractor.

It won’t be considered in court if you fail to do so and have the most legit delay claim.

Time is of the essence 

This clause means that the contract will hold all parties responsible for completing the project in an agreed-upon time. Therefore, if any delay occurs, it will be considered a breach of contract, even if it was a minor one.

Force Majeure Events 

The “force majeure events” clause covers events that:

  1. Are not reasonably foreseeable when the contract was being signed.
  2. Are beyond the control of the parties involved.
  3. Or are not due to negligence.

Any delays due to these events make the claim void.

Workers on construction site

Need Further Help?

While this article here is to help you understand how construction delay claims work, sometimes things are more complicated than that, which is why it’s best to seek professional help.

HPM Consultants offers the best construction delay claim analysis services in the US for those in trouble. Whether you’re the owner or a construction company, their team consists of expert and well-versed professionals who can guide you in the best possible manner.

Visit their website to get in touch with the best delay claim expert in town.

Categories: Construction

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