ENR recently published the article “Project Delay…What’s Next?” by Smith Pachter McWhorter attorneys Kathryn Muldoon Griffin and Jacob B. Bolinger in the ENR Law & Risk Management Today II August/September 2020 issue, discussing project delays and importance of reviewing contract provisions in construction contracts to mitigate project risks.
Construction and design services contracts for complex projects are carefully negotiated with the objective of identifying and allocating project risks among parties equitably, including risks associated with project delays. Often, contracts provide for relief in the form of time extensions and, under certain circumstances, price adjustments. Other provisions may allow one or more parties the opportunity to terminate or re-procure services when specified events occur. At the same time, most contracts include a clause requiring the contractor to continue performance, including any disputed obligations, while a dispute is pending. For this reason, even seemingly ironclad clauses regarding delay may still be insufficient to protect the parties’ respective interests. Recently, for example, a Maryland court issued a temporary restraining order directing a contractor to continue working until the parties resolved a dispute regarding the critical path and cause of delays, despite the contract unambiguously permitting the contractor to discontinue performance. Although rare for courts to issue an affirmative injunction to force a contractor to continue to perform, contractors should still factor the possibility into the bargaining process.
Access the full article here.
Smith Pachter McWhorter assists our construction clients in navigating project delays associated with complex construction projects. For questions regarding potential impact of project delays, please contact the authors: