Compensation for Delays and Extras in a Construction Project A construction project invariably encounters delay and the need for ‘extras’. Disputes arise when the owner and contractor cannot agree on, and the contract does not stipulate, if and how these items should be compensated. Delay caused by weather, acts of government, unforeseeable delays by subcontractors, or unforeseeable soil conditions are “non-compensable” delays, meaning the owner is generally required to give a time extension, but not compensation for the delay. Delay caused by the owner, such as excessive changes or deficiencies in the design, or the failure to obtain permits, are “compensable” delays, meaning the contractor is entitled to an extension and compensation. Finally, contractor delay, including insufficient staffing or poor workmanship, is not compensable, and may result in a claim for damages by the owner. Extras include work or materials that are not specifically provided for in the contract, but are accepted, either implicitly or explicitly by the owner as being required. Generally, contractors should not perform additional work and simply assume it will be compensated. The contract often requires the contractor to get extras approved by the owner within a certain timeframe, failing which the extra work or material may go unpaid. Even without such a clause, it is prudent practice to confirm the acceptance of an extra within a reasonable time frame. On the other hand, owners with full knowledge of the extra work being performed by the contractor cannot sit idly by and later claim that they did not approve it. Disputes that end up in court can end badly for a contractor for reasons that are too numerous to detail here. A well-written contract, coupled with diligent following of its procedures, is the best protection against unpleasant surprises. Joseph C. Dart, Litigation Section, Viner Kennedy Frederick Allan & Tobias LLP, Kingston Nothing in this article should be relied on as legal advice. Readers are urged to seek professional legal advice on the particular issues which concern them. Next Dinner Meeting: Date: Wednesday, May 9, 2012 Place: The Stone Cellar Restaurant, 71 Gore Street, Perth Time: Cocktails 6:30 pm Dinner 7:00 pm Cost: $ 30.00 per person, payable that evening Please RSVP to Darlene Fendley at Phone/Fax: 613-523-5656 Email: darlenefendley@gmail.com