"Time is of the essence" and "on time and on budget" are two phrases by which Owners set the tenor of their construction projects. The weather takes no heed of such phrases. Because of this, Owners should be prepared to deal with the consequences of a weather-impacted project.
Any construction project that takes more than a few months and involves outdoor work is likely to encounter some bad weather. But what effect will such weather have on the completion of the project and its cost? How bad must the weather be before the Owner must provide a contractor an extension of time or additional pay, or both?
Classification of Delays.
Some delays are non-excusable; for these, a Contractor is entitled to neither an extension of time nor additional compensation. These contrast with "excusable" delays, which entitle the Contractor to one thing: an extension of time to complete the work. If the delay is also "compensable," the Contractor is entitled to both compensation and an extension of time. A "concurrent" delay involves two kinds of delay occurring at the same time, one compensable and one non-compensable. Because the non-compensable delay cancels the compensable delay, the contractor is not entitled to compensation.
Typical excusable delays include the following examples:
Delays caused by the Owner or its agents are typically compensable delays. Examples include the following kinds of delays: obtaining the site; obtaining easements necessary for construction; obtaining proper zoning; changes to the Contract Documents due to conflicts or inadequacy of the Contract Documents or additional scope work; and unforeseen site conditions, including hazardous materials.
Upon the occurrence of either an excusable or compensable delay, the Contractor has a contractual duty to give the Owner the requisite notice. If the delay is finally determined to be a compensable delay, the Contractor will be entitled to an extension of time and compensation for the delay.
Compensable weather delays? How can that be? Surely weather is one element that can't be blamed on an Owner or on the Owner's agents. Still, under the right or wrong circumstances, a weather delay can be an expensive, compensable delay.
Knowledgeable Owners can avoid or mitigate compensable weather delay claims.
The Time Schedule for a Project.
In analyzing any claim for an extension of time, the parties must consider the project schedule, the logic for the particular sequencing of the work, what activities are delayed, and whether the activities are on the critical path, as well as the cause of the delay.
When the Contractor is required to accelerate its work to meet a required time schedule, "acceleration" occurs. This acceleration can be express acceleration, i.e., where the Contractor is given notice to accelerate its work, or constructive acceleration. Constructive acceleration occurs when the Contractor is entitled to an extension of time, but the Owner refuses to grant the extension and insists that the Contractor complete its work in accordance with the unmodified schedule. In this circumstance, the Contractor has a shorter period of time for completion than permitted under the Contract Documents, often causing additional costs because of reduced efficiency or required overtime and additional shifts at premium rates. Be aware that the Contractor may seek-and get-damages for "acceleration."
Under most sets of Contract Documents, if the Contractor has a claim, including a weather delay claim, the Contractor must give the Owner written notice. If not, the Contractor may waive its right to an extension of time.
But not always: Many courts recognize that the waiver of a valid claim for an extension of time is a harsh result. Accordingly, in some states (Ohio, for instance), the failure to give a required written notice may be overlooked by the courts as harmless if there is "constructive notice" to the Owner of the conditions of the claim.
Still, neither Owners nor Contractors should count on strict or lenient judicial treatment but should give the required notices and otherwise follow the requirements of their project's Contract Documents.
But all projects encounter some adverse weather. What distinguishes plain bad weather from weather that is bad enough to justify a claim?
Before a Contractor can justify an extension of time for weather delays, it must provide documentation to meet a three-pronged test:
Accordingly, a Contractor seeking to establish entitlement to a weather delay extension must submit comparative weather data to the Owner. Records of actual weather are meaningless without showing comparative time and area data. Whether you are in court proceedings or an arbitration, insist on certified copies of weather records from the National Weather Service.
Once the Contractor establishes that the weather was unusually severe or abnormal and could not reasonably have been anticipated, the Contractor must also establish the effect of this weather on the project. A smart Contractor will show that the weather affected specific portions of the work, and that this work was on the project's then-current critical path. Be prepared for the Contractor to argue not only the direct loss of time (e.g., a rain day which precludes work), but also reduced productivity due to the weather, unplanned work caused by the weather, and the lingering effects of the weather. Examples of the lingering effects of weather include the time necessary for soil to dry out before it can be worked.
Compensable Weather Delays.
So we come back to the question: If compensable delays are generally those the Owner or its agents cause, and if weather delays must be abnormal, unanticipated, and adverse, how can a weather delay be compensable? Surely the Owner is not to blame for the acts of Mother Nature?
True, as a general rule. Ordinarily, a weather delay is only excusable, not compensable. There may be circumstances, however, when a weather delay will be compensable. Thus, if the Owner creates a compensable delay that causes weather delays-by prolonging work into a period of bad weather when it otherwise would have been complete, for instance-the weather delays may then be compensable.
For example, it may be the intent of the parties to start construction in the fall, completing the building pad before the start of winter weather. If the Owner is unable to obtain the site or site access and this delays the start of the work into the winter months, the Contractor may then be unable to proceed with construction of the building pad because of weather delays. In this circumstance, the weather delay that would otherwise have been merely excusable may now be compensable.
Owners, therefore, should be very sensitive to weather delays, because a non-compensable delay can turn into a compensable delay under the wrong circumstances.
Michael S. Holman and Gregory T. Parks are construction attorneys with the law firm of Bricker & Eckler LLP in Columbus, Ohio.
Reprinted with permission on the behalf of Michael S. Holman, Esq.