When the stay-at-home period comes to an end and life gets back to some semblance of normalcy what can we expect with construction and construction contracts? We need to state that “normalcy” here is really subjective as the experts warn that life may not get back to what we knew it to be prior to Corona. Fetes and large congregations in public maybe quite a way off even when the stay-at-home is lifted.

But for construction projects that have been halted since the mandatory stay-at-home was implemented on 30th March 2020 and scheduled to be lifted on 30th April 2020 what can be expected?

Short answer = Claims.

Now claims in itself are not necessarily bad. Because what we are currently experiencing in the construction industry is actually covered in most standard forms of contracts. Force Majeure is defined as an exceptional event or circumstance which is beyond a party’s control; could not reasonably have provided for before entering the contract; could not have been avoided; or which is not attributable to either party. This is covered in clause 19 in Fidic Red Book; clause 8.11 in JCT and clause 8.11 in TTIA. Under all these standard forms it allows for the termination of the contract owing to force majeure.

What we are referring to is the unfounded, unjustified, uninformed actions being brought by persons who “just don’t know what they are doing” type of claims. In essence the claims are going to be along the line of the contract being affected by Frustration. This is defined as the event / act that, through no fault of either party, makes the performance of the contract impossible.

But, can one really justify a one-month suspension, as frustration? This question arises since most standard construction contracts allow for a minimum of a two-month suspension before termination under force majeure can come into effect.

So, we have a situation where contracts have been suspended for one month, maybe two (hopefully not more than that!) Then one party decides to terminate the contract because of the delay and claim losses and disruption etc etc. Or, not termination but claims, for delay, loss, disruption etc etc.

Either way what will be required is a level head, calm and understanding. Understanding that what you (the client, the contractor, the sub-contractor, the tenant, whoever you are), would have experienced for the stay-at-home period, was also experienced by the others on the project. You are not special, get over yourself and work towards successfully restarting and completing the project.