In wake of the COVID-19 pandemic and current State of Disaster in Victoria, it is imperative that all Builders and Owners/Developers are aware of their rights and obligations.
With the potential for lock downs and supply of materials halted, the ability to ensure construction jobs are delivered on time will be impacted.
For more information on how to manage cost escalation caused by COVID-19 read our blog here.
Most standard form Domestic Building Contracts will contain an Extension of Time conditions such as:
If building works are delayed by causes outside the reasonable control of the Builder, then the Builder must within a reasonable time advise the Owner of the cause of the delay and a reasonable estimate of length of the delay. By doing so, the Builder will be entitled to fair and reasonable extension of time for the completion of Works.
Commercial contracts may contain a Force Majeure or ‘superior force’ clause which comes into effect when is unforeseeable circumstances occur preventing someone from fulfilling a contract. Force majeure events includes unforeseeable circumstances such as natural disasters, labour strikes acts of war/terrorism or even an ‘act of god’ and will likely include the COVID-19 pandemic.
Given the current State of Disaster from 2 August 2020 in Victoria, builders should send those Extension of Time notices now.
Similarly, subcontractors should also be putting the principal contractor/builder on notice of delays.
For anyone entering into contracts after the advent of COVID-19 and current State of Disaster, you must allow for such delays in your construction period timeline due to labour/material shortage and draft special conditions covering circumstances if lockdowns are enforced.
Please speak to Oldham Construction Lawyers before entering into a new contract as we can draft special conditions for you.
If you are unsure of your obligations and need assistance, please do not hesitate to call Daniel Oldham on (03) 9640 0002, or via email firstname.lastname@example.org