When your construction project is faced with material shortages, work can quickly grind to a halt and the costs can start to add up.
Materials can sometimes take days or weeks to source and delays can put a strain on your relationship with your customer.
If this delay carries on, it is crucial to understand how to manage this and protect your legal position.
Our specialist construction solicitor, Layna Thompson, investigates.
When can material shortages occur?
Material shortages can often arise from human error, such as rushed measurements or failure to double-check calculations.
They can also arise from:
- An incorrect delivery
- Poor storage of materials causing damage
- Theft
- Poor workmanship requiring rework
- Materials, such as concrete, being applied too thickly and depleting the stock faster than expected
Regular stock checks and investigations should always occur before ordering more materials.
How can you handle material shortage delays and issue notice?
When a shortage occurs and you realise a delay could happen or is happening, you must act quickly.
Most construction contracts require the contractor to issue a written notice as soon as it becomes reasonably apparent that a delay may occur.
A notice of delay is an early warning that can help preserve your contractual rights.
A proper delay notice should outline:
- What caused the delay
- The likely impacts on time and cost
- Supporting evidence such as site diaries, photographs, supplier correspondence and delivery updates
Under NEC contracts, you have a duty to give early warning and work collaboratively to reduce the impact of delays.
Who is responsible for delays due to material shortages?
Whether a material shortage entitles you to extra time or cost, will depend on the contract terms and the underlying cause of the shortage.
Some contracts do allocate risk, but others require close analysis of whether the delay was excusable or compensable to the project.
Without clear provisions in place, disputes over extensions of time and loss can be common.
How can you prepare for delays?
Preventing a delay is always the desired approach and effective project management and clear communication can help reduce these risks.
Contractors should plan for contingencies by:
- Having alternative suppliers
- Setting realistic deadlines in your project
- Regularly monitoring material usage
Clear provisions should also be included in a contract to protect you from potential delays and to provide legal support.
If a delay arises, our construction law team can help advise you on the relevant notice requirements and assess your entitlements to extensions of time or compensation.
We can also assist with negotiation or mediation if an agreement over the contract terms cannot be made.
Material shortages are sometimes inevitable and early planning and legal support can help reduce the risks of derailing your project.
To learn more about how to manage construction delays and disputes as a result of material shortages, contact our Construction Law team today.
