While children across the country may be hoping for snow this season, that feeling will not be shared by many in the construction industry. At a time when contractors are already under costs pressures, delays caused by bad weather will be the last thing on anyone’s Christmas list.
It is worth taking the time to check your contracts to see who carries the risk of weather and how this is dealt with as an extension of time and/or loss and expense.
Under JCT Design and Build contracts, the risk for weather is, in effect, shared. While “exceptionally adverse weather conditions” are a Relevant Event, meaning the contractor can claim an extension of time; it is not a Relevant Matter. This means the contractor will not be able to recover any loss and expense arising from weather conditions.
This, of course, leads to the question – what is “exceptionally adverse weather”? The standard form does not provide much guidance, however the focus for the contractor should be on showing that the weather is not only “adverse”, but also “exceptional”. The contractor should look to provide historic weather records over a number of years, along with their own site records to show the weather was not the norm and the works could not be carried out.
NEC3 and NEC4
Under NEC3 and NEC4 EEC contracts, the approach is different. Weather conditions are a Compensation Event, entitling the contractor to a change to completion, key dates and defined costs.
The result being that, unlike with JCT Contracts, the contractor may be able to claim both time and money as a result of adverse weather.
However, the contractor must show that the weather being claimed for occurs on average less than once every ten years, when compared to established weather data; and can only claim the difference between that average data and the weather measurement being claimed for.
It is therefore important that the contract data is completed to specify the place where the established weather data is to be taken from and that this is as close as possible to the site and experiences similar conditions.
Factor bad weather into the contract from the start
At the outset, when entering new contracts, parties should consider the possibility of bad weather when programming and pricing the works and should make provisions for allocating the risk as clear as possible.
If the project is affected by bad weather, check the contract to identify what rights the parties have and whether the contractor is entitled to relief. If a contractor is entitled, consideration should also be given to any contractual notice requirements under the contract.
Depending on the terms of the contract, if the event is not notified in time and in accordance with the contract then no matter how adverse the weather is, the right to any extension of time and additional payment may be lost.
On December 7, 2018