Delay and Disruption - The Purchaser's Obligations as to Time
© Daniel Atkinson 2001 18 November 2001
SUMMARY
The Employer is required to complete his obligations specified in the
contract at such times as to permit execution and
completion of the Works by the Contractor at the times specified in the
Contract.
Terms may be implied in the absence of express terms to the contrary
which are the negative obligation not to hinder the contractor and the
positive obligation to cooperate as necessary.
The Employer is required to complete his obligations specified in the
contract, such as supplying information, giving possession, executing any
work or providing any materials, at such times as to permit execution and
completion of the Works by the Contractor at the times specified in the
Contract. If no such times are specified the Employer must carry out his
obligations at reasonable times having regard to the date of completion of
construction, the provisions of any approved programme of work and the
actual progress of the Contractor.
These obligations of the Employer do not require that he should comply
with the provisions of the approved programme of work, but only that he
should not hinder the Contractor from carrying out his obligations to
complete the works at the times specified in the Contract. It is only if no
time is specified that the approved programme is relevant, and then only in
establishing what are reasonable times. This therefore is not an obligation
to positively co-operate with a Contractor to complete prior to the date
provided for in the Contract. The situation will, however, be different if
the programme is incorporated in the contract as a contract document or if
the express terms of the contract state otherwise.
Terms may be implied in the absence of express terms to the contrary
which are the negative obligation not to hinder the contractor and the
positive obligation to cooperate as necessary.
A term will usually be implied in a construction contract, in the absence
of express terms to the contrary, that the Employer will not hinder or
prevent a contractor from performing the contract or delay him in performing
it London Borough of Merton v Stanley Hugh Leach Limited (1985) 32BLR51.
The term is implied if it is necessary for the business efficacy of the
contract. Such a term may not affect certain actions by the Employer if on a
proper interpretation of the contract, the Employer was entitled to take
such actions. In William Cory & Son Ltd v London Corporation [1951]
the contracting statutory authority was not in breach of contract in making
bylaws which made more expensive the contractor’s execution of the
contract. It was not intended that the statutory authority should be
prevented from carrying out its public duty. If on the other hand the
Employer interferes with the contractor’s method of working, in the
absence of express provisions allowing him to do so, the contractor will be
entitled to recover damages for breach of contract. Similar considerations
apply if contractors employed by the Employer interfere with the contractor’s
performance of the Contract.
Generally, if it is necessary for the Employer to cooperate in order for
the contractor to carry out the work, then a term will be implied (in the
absence of express terms) requiring that party to do all that is necessary
for him to do to complete the works London Borough of Merton -v- Leach
(1988) 32BLR51. Examples of such an obligation are granting possession
of the site, obtaining relevant permissions, appointing the
Architect/Engineer and the issue of instructions.
A construction contract necessarily requires the owner to give the
contractor such possession, occupation or use as is necessary to enable him
to perform the contract The London Borough of Hounslow v Twickenham
Gardens Development (1970) 78BLR89. In a new project a term would
normally be implied into a construction contract (in the absence of an
express term) that the site would be handed over within a reasonable time
and, in most cases, with a sufficient uninterrupted possession to allow the
contractor to carry out his obligations by the method of his choice: the
Canadian case of Penvidic Contracting Co Ltd v International Nickel Co.
of Canada Ltd [1975]53 DLR 748. If a contract contains an "entire
agreement" clause, this will not prevent the implication of a right to
possession without clear words Milburn Services Limited -v- United
Trading Group (UK) Limited (1995)52ConLR130
The degree of possession or access provided by the Employer will vary
with the circumstances. Generally more than the actual site on which the
structure stands is required to erect the structure. The Employer is
normally required to give possession of sufficient portions of the site of
the work to permit compliance with the Contract: the Canadian Case of The
Queen in Rights of Canada -v- Walter Cabbott Construction Ltd (1975)
21BLR26.
It will depend upon the particular terms of the contract and the
circumstances of the contract whether or not a term will be implied that
the Employer is under an obligation to obtain building permits Ellis-Don
Ltd -v- The Parking Authority of Toronto (1978) 28BLR106
The Employer is under an obligation to appoint the Architect/Engineer
(if expressly part of the contract machinery) to carry out the administrative functions under the contract and to
appoint a replacement if the Architect/Engineer is unable to act Croudace
Ltd v London Borough of Lambeth [1986] 33BLR20.
For those Architect/Engineer duties carried out on behalf of the
Employer, there will be an implied warranty from the Employer that the
Architect/Engineer is reasonably competent and will exercise reasonable
skill, care and diligence in carrying out his duties under the contract London
Borough of Merton -v- Leach (1988) 32BLR51.
Usually no term will be implied requiring the Employer to oversee or
supervise the Architect/Engineer`s functions of certification and decision
making under the contract. If there is an arbitration clause the parties
will normally agree to the arbitrator having the power to open up, revise
and review any certificates, decisions or opinions. In the absence of an
arbitration agreement the parties frequently agree to the Courts having
the same power. In such cases, if the contractor wishes to challenge any
interim decision, he can request the appropriate adjustment in the next
stage of the process or if this is refused go to arbitration or the courts
to have the decision corrected. There will therefore be a formal remedy
for the A/E’s failure.
If there is no power either by an arbitrator or the Courts, to open up,
revise and review decisions then a contractual duty will be implied that
the Employer should oversee or supervise the A/E`s functions. It is
suggested however that this duty is easily discharged by the Employer.
If not expressly set out in the contract, it is an
implied term as a matter of business efficacy that the Employer will have
the details and instructions necessary for the execution of the works
provided, by the Architect/Engineer or otherwise, in a reasonable time.
What is a reasonable time does not depend solely on the convenience
and financial interest of the contractor, but also on the
Architect/Engineer, Employer and the planned order of the works and timing
of requests for information Neodox Ltd v Borough of Swinton and
Pendlebury [1985] 5BLR34.
The obligation to cooperate does not extend to
providing information to allow the contractor to complete early Glenlion
Construction Ltd v The Guiness Trust [1987] 39BLR89.
Most
standard forms of contract will state the obligations of the Purchaser as to
time, and make clear the responsibility for obtaining permits and access etc.
The main issue in most contracts will be the timing of the issue of information by the A/E.
If the works are progressing smoothly in accordance with an agreed programme
then there is little difficulty in ascertaining when information is required.
It is when delays or disruption occurs that difficulties arise. In that case there may be no
up to date programme. In that case dialogue is essential, but frequently does not occur.
The positive approach is to instigate meetings between the parties to discuss the requirements for
information. In any event records of unfolding events will be necessary for any claims for or rebuttal of
delay and disruption entitlement.
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