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Chapter 20
The instructor’s approach to Chapter 20 will probably turn on the degree to
which students have already been exposed to the mechanics of scheduling. The
chapter is designed to both educate as to the basic concepts of scheduling and
provide a legal analysis of delay claims. Students well versed in this topic may
skip Section 20.7 – 20.9.
That legal analysis begins with Section 20.4, categorizing causes and
remedies for delay. Section 20.6 on contract approaches is important. It first
deals with force majeure clauses. This venerable defense to a breach is a crucial
concept for construction law. Construction is subject to many factors that prevent
Section 20.11 addresses time extensions—a potent measure by which an
owner may (at least attempt to) preclude contractor delay claims. Students
should be reminded of the change order process (Chapter 18) by which time
extensions are granted.
Clearly contractual control of delay claims is in the hands of the owner. The
Carrothers case in Section 20.12 upheld the validity of liquidated damages
clause, particularly in public contracts. In contrast, the Rohlin case (in note 26)
Section 20.13B deals with delay claims and “no damages” clauses. Such
claims seem a part of the modern construction landscape. Whether such clauses
will be enforced and exceptions to their enforcement are essential issues and
should be highlighted. Even more, students should be asked whether such
clauses should be inserted in contracts. Will they raise bid prices? Will their use
The Triple R case involves one exception to enforcement. It should be
highlighted in class. Students should be asked whether the exceptions
recognized make the clause useless and only jack up the price. We do not think
the clauses are useless. We also believe a targeted clause is better than a
broad, blunderbuss clause. But the possibility of a targeted clause as opposed to
a full–fledged no–damages clause raises an interesting drafting issue. If it is clear
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a broad no–damages clause would be clearly enforceable, a targeted clause may
not be needed. But where enforcement requires an evaluation of the exceptions
to enforcement—often the case—a targeted clause may be able to achieve the
objectives sought by the owner while avoiding (or reducing the likelihood of) a
court challenge.
The difficulty is that a good targeted clause requires careful preparation and
significant transaction costs. Putting it in the invitation for bids could increase the
Section 20.14 addresses acceleration, a time–related claim uniquely belonging
to the contractor. We hear of more contractors claiming they planned to finish
early and making a claim that the owner prevented them from doing so.
Section 20.15 involves bonus/penalty clauses. This approach, still only rarely
used and mostly on public projects, seeks to incentivize timely (and even early)
completion. Ask the students: Is the carrot the better owner approach, or the
stick?
Answers to Chapter Questions
1.) What is the most complicated time-related issue in a construction project?
2.) What are the three categories of delays?
3.) What are the two categories for remedies for delay?
4.) What are the primary purposes of a force majeure clause and what are some
examples of force majeure?
5.) What are four questions that must be asked in evaluating a delay claim in which
CPM is going to be employed?
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a. Certain commentators have stated that the following four questions must be
asked in evaluating a delay claim in which CPM is going to be employed: (1)
how was the project actually constructed? (2) What are the differences
between the project as planned and as constructed with respect to activities,
sequences, durations, manpower, and other resources? (3) What are the
causes of the differences or variations between the project as planned and
the actual performance? And (4) what are the effects of the variances in
activities, sequence, duration, manpower, and other resources as they relate
to the costs experienced, both by the contractor and by the owner?
6.) If a contractor has a time extension that is justified, how is the amount of time
determined?
7.) What is the damage formula that is most frequently applied by the common law to
delayed contractor performance?
8.) What is the purpose of a liquidated damages clause?
9.) What are the five elements a contractor must prove to establish construction
acceleration?
10.) What are the three elements a contractor must prove in order to establish an
early completion claim?
