Delay Without Extension: When Employers Cause Delay but Contractors Get Nothing Prevention Principle vs. Notice Failures
Delay is a common feature of construction projects. The real legal issue, however, is determining who bears the consequences of the delay. A recurring dispute arises where the employer causes delays, yet the contractor receives no Extension of Time (EOT) because the contractual notice requirements were not complied with. This creates tension between the prevention principle and strict contractual notice provisions.
The prevention principle provides that a party cannot insist on performance of a contractual obligation where it has prevented the other party from performing. In construction law, this means an employer should not be able to delay the contractor and still impose liquidated damages for late completion.
This principle was illustrated in Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd, where employer-caused delay occurred, but the contract contained no mechanism to extend time. The court held that the completion date could not be enforced and that time became “at large,” requiring completion only within a reasonable period.
Similarly, in Hind Construction Contractors v State of Maharashtra (1979), the Supreme Court of India established significant principles regarding delay in construction contracts. The court held that if the employer causes delays, they cannot hold the contractor liable for damages arising from that delay, nor can they rely on the original, strict completion timeline to impose penalties.
Modern construction contracts seek to avoid this outcome by including detailed Extension of Time mechanisms. However, these provisions are typically accompanied by strict notice requirements, often treated as conditions precedent. If the contractor fails to issue a timely notice of delay, entitlement to an EOT may be lost.
In the context of FIDIC contracts, this tension is addressed through a structured Extension of Time and claims framework. FIDIC Conditions of Contract for Construction For Building and Engineering Works Designed by the Employer (Redbook) Sub-Clause 8.4 allows the contractor to seek additional time where delays arise from employer instructions, variations, or other employer-related events. The purpose is to ensure that the contractor is not exposed to delay damages for delays beyond its control.
However, this entitlement is closely tied to the claim procedure. Under FIDIC (Redbook) Sub-Clause 20.1, the contractor must notify the claim within 28 days of becoming aware of the delaying event. If this notice is not given in time, the contractor may lose the right to both time and money. In practice, even delays that clearly fall within Sub-Clause 8.4 can lead to liability if the contractual notice procedure is not strictly followed.
The practical lesson is therefore clear: in modern construction contracts, entitlement to time often depends not only on the cause of delay but on strict compliance with contractual procedures. Effective contract administration and timely notices can therefore determine whether a delay becomes excusable or financially consequential. Even where the employer contributes to the delay, failure to issue timely notices may result in the loss of entitlement to time or cost. The preservation of contractual rights, therefore, depends as much on diligent contract administration as on the merits of the delay itself.