As we all know, planning is key to a successful construction project – but it can only take you so far!
Unforeseen circumstances are exactly that, meaning they cannot be predicted and prevented in advance, but you can facilitate a positive outcome and potentially avoid a dispute by implementing flexible contracts that recognise the potential for unexpected delays, disruptions or changes to the plan.
Whether it is due to supply chain issues or severe weather, early contract variations can help prevent disputes and keep your project on track.
How do contract variations work?
Contract variations are any amendments or changes to the original scope of work, timelines, costs, or materials. This can usually include both additions to or omissions from the scope of work, timelines, costs, or materials.
Some variations are planned and mutually agreed upon, while others arise due to circumstances outside anyone’s control.
In these cases in particular, where a delay or disruptions hits the project that was not predicted or accounted for in the original agreement, it is important to act quickly and carefully to head off any potential disputes.
What action should I take?
Unforeseen circumstances can be managed with the right action.
In the event that something happens, you should:
- Notify your contractor or client as soon as possible, which may be mandated by certain contract families and/or express provisions within the contract may dictated when and how this is to be done.
- Document the impact of the event
- Outline how the event will affect timelines and costs
- Keep in regular communication with the other parties
- Remain flexible and recognise that all parties have a shared interest in completing the project.
If disagreements arise, consider using mediation or adjudication rather than litigation, as this can be quicker, less costly and help to preserve working relationships.
The Construction Act 1996 provides a framework for adjudication, which is often quicker and less expensive than going to court.
The role of force majeure
Many construction contracts may contain provisions for what is known as force majeure – delays or disruptions due to extraordinary circumstances outside of the fault of the affected party. These may include:
- Natural disasters (e.g., floods, hurricanes, or earthquakes)
- Acts of Government (e.g., new regulations or emergency measures)
- Epidemics or pandemics
- Political instability or conflict
A force majeure clause protects the affected party from penalties outlined in the contract in the event of delays or non-completion of work, if one of these events occurs.
Force majeure must be expressly included in contracts in England and Wales – it is not applied to situations automatically.
Avoid ambiguities in these and similar clauses so that you can focus on working together with the other parties to overcome unforeseen circumstances, rather than raising disputes over your contracts.
For advice on construction contracts and disputes, please contact our team.