Construction Delay Claims: What Your Contract Needs to Say

Construction delay claims are one of the most common — and most costly — disputes that come out of any building project. Timely completion is one of the clearest measures of a successful project. Getting ahead of delays in contract language is one of the smartest things an owner can do before work begins.

A well-written construction contract should spell out three things clearly:

• What events actually constitute a delay
• How the impact of that delay will be evaluated
• How any associated costs will be determined

Without that framework, you’re negotiating in the middle of a crisis instead of referencing an agreement everyone already signed.

The Two Types of Construction Delays

Not all construction delay claims are treated equally. Understanding the difference is the foundation of any delay clause.

Excusable Construction Delays

Excusable delays are circumstances outside the control of both the owner and the contractor. Think extreme weather, previously unknown site conditions, or fire.

These generally relieve a contractor of their obligation for strict on-time performance and may or may not result in additional compensation depending on the situation.

Some excusable delays are actually owner-caused. Common examples include:

• Owner-directed changes — Many owners have difficulty visualizing a finished installation from plans alone and request changes once work is underway. That’s understandable, but it’s also a compensable delay. The contractor may be entitled to additional time and cost to source material substitutions and complete revised work.
• Late design decisions — If an owner is slow to make decisions that the contractor needs to proceed, that delay falls on the owner.
• Restricted site access — Limiting work hours or days during a remodel without giving the contractor advance notice can impact the schedule. These are potential costs the contractor never accounted for in their original bid.

Non-Excusable Construction Delays

Non-excusable delays are foreseeable or within the contractor’s direct control. Examples include:

• Failing to provide sufficient labor for the work
• Defective workmanship requiring correction
• Late material deliveries from suppliers under the contractor’s control

For non-excusable delays, your contract should include language that obligates the contractor to accelerate the work. Getting back on schedule is at their own cost. That said, how a contractor chooses to accelerate can sometimes ripple back to the owner. Say a contractor resequences work activities to make up time. Any owner-furnished equipment or materials may suddenly be needed earlier than originally planned. Your contract should address that scenario specifically.

The Construction Schedule Is Everything

The starting point for evaluating any delay claim is the construction schedule. Whether you’re working with simple milestone dates or a detailed critical path schedule (CPM). Identifying the schedule format in the contract gives both parties a shared baseline to measure against.

Schedules will change as the project progresses — that’s normal. Contractors have the right to resequence their own work activities as part of managing their legal obligation to timely complete.

What your contract should protect against is resequencing that pulls in owner-furnished items or owner-contracted consultants ahead of plan.

Some contractors will use that situation to initiate a delay claim. Their argument that owner-supplied materials arrived late or that owner consultants were slow to respond. Close that door in the contract before work starts.

Any acceleration that affects your direct contracts or purchases should also require your approval in advance. That’s a straightforward clause that prevents surprise financial obligations on your end.

Put It in the Contract Before You Need It

Defining upfront — in writing — how excusable and non-excusable delays are measured, priced, and resolved will go a long way. This prevents claims from escalating into disputes. Even if something unexpected comes up, having that framework in place gives both sides a rational starting point instead of a fight.

If you’re unsure what delay language is appropriate for your project type, a construction attorney can review your contract before signing. That investment is minimal compared to the cost of an unresolved delay claim.