When the job runs late: delay claims, extensions of time and the records that decide them

The completion date was 30 June. The latest forecast says 14 July. The progress report says the job is two weeks late. That is useful information, but it answers only one question. It does not say why the job is late, who bears the cause under the contract, whether the delay actually affected the finish date or just used up spare time, whether anyone gave the required notice, or what should happen next. A schedule shows the effect. The contract decides the consequence.

Delay disputes are some of the most common and expensive disagreements in contracting, for builders, trades, manufacturers, installers and the businesses that hire them. Most of them are not really about law. They are about evidence: what happened, when, what it affected and what was done about it. By the time lawyers are involved, the records that would have settled the question often no longer exist.

This article explains how to think about delay as a chain of cause and effect rather than a gap between two dates, why notice is an early warning rather than an act of hostility, why informal acceleration is risky, how a business that causes delay can lose its own protection, and what records to keep. It is general information. Delay, extension of time and damages provisions vary widely between contracts, and their legal effect depends on the wording and the law that applies, so get advice before relying on them in a dispute.

Delay is causation, not variance

A job can be late without the contractor being entitled to more time. It can also suffer a genuine delay caused by the customer without the records being strong enough to support an extension. To decide either way, follow the chain:

Event → responsibility → notice → effect on the work → effect on completion → mitigation → decision

• Event. What actually happened, when and where?
• Responsibility. Under the contract, is this the contractor’s risk, the customer’s risk or a neutral event such as certain weather?
• Notice. Was it notified in the way and within the time the contract requires?
• Effect on the work. Which activities were affected?
• Effect on completion. Did the event move the finish date, or only use up spare time (float) in the programme?
• Mitigation. What reasonable steps were taken to reduce the effect?
• Decision. What adjustment to time, money or both is justified?

Each link needs evidence. A claim that skips a link becomes an assertion, and assertions harden into disputes.

Common misreadings

• Anything outside the contractor’s control earns more time. Not necessarily. It depends on what the contract says qualifies.
• If the customer caused it, the contractor gets the whole period. The actual effect on completion still has to be shown. A 14-day late access may have a much smaller effect on the finish if the affected work had spare time or could be resequenced.
• Delay can be sorted out at the end. By then, records have faded, the programme has been revised many times and the people who understood the event have moved on.
• Notice is a legal weapon. It is better understood as an early-warning mechanism that lets both parties see the issue and decide what to do while options are still open.
• Mitigating means giving up the claim. Mitigation and entitlement are separate questions. A party can protect its rights while still taking sensible steps to reduce the impact.

Use the programme as it was at the time

The most persuasive evidence of a delay’s effect is the programme as it stood immediately before the event, compared with what actually happened. A programme reconstructed months later tends to tell a convenient story. So:

• Keep the programme live and dated. Save a version at each update.
• Link delay events to the activities they affected.
• Record float. If an activity had spare time, a delay to it may not move completion.
• Watch near-critical work. Activities that were not critical can become critical after a delay. The how confident is that finish date article covers why the critical path can shift.

Planning and commercial views of the same event also need to meet early. A planner may see a five-day design delay; the contract administrator sees late information from the customer; the site supervisor sees resequencing that kept the crew productive; the estimator sees extra site overheads. Reconciling those views months later creates disputes that were avoidable.

Overlapping causes

Delays often overlap. The customer gives late access at the same time as the contractor’s own materials arrive late. How such overlapping, or “concurrent”, delays are treated depends heavily on the contract wording and the law, and it is a common source of disagreement. The practical lesson is to record each cause separately, with its own dates and effects, rather than bundling them into a single narrative. Clear records of which cause affected which work make any later analysis far easier.

Avoid informal acceleration

When a job falls behind, there is pressure to “just catch up”. Acceleration, adding people, shifts or equipment to recover time, consumes resources, may lower productivity and can create its own risks. There are several different situations:

• the contractor speeds up to recover its own delay, at its own cost;
• the customer directs acceleration where the contract allows it, usually with an adjustment to the price;
• the parties agree acceleration after a delay the customer was responsible for;
• the customer insists on the original date while refusing a justified extension, leaving the contractor to speed up and argue about cost later.

The last situation is where disputes grow. If extra resources or resequencing are needed to protect a date, agree the commercial basis in writing before the money is spent.

Recovery is not a choice between accepting delay and forcing speed. Options may include resequencing, partial handover, extra shifts, an alternative supplier, temporary work-arounds, deferring part of the scope or completing unaffected areas first. Each has a different cost and contractual consequence.

When the customer causes the delay

Businesses that hire contractors often hold the key to timely completion: access to the site, decisions on finishes and design, approvals, information and the work of their other contractors. If the customer causes delay, the contract normally needs a working mechanism to extend the completion date. Where it does not, or the mechanism is not used properly, a customer who caused the delay may find it difficult to hold the contractor to the original date or to claim liquidated damages from it. This idea is often called the prevention principle, and in some situations it is said that “time is at large”. Its application is technical and depends on the contract and current law, so take legal advice if it may arise. The when a contract is broken article covers how liquidated damages work as an agreed price for delay.

The practical lessons for a business hiring contractors:

• List the things you control that the contractor depends on, and the dates they are needed.
• Make sure the contract can extend time for delays you might cause.
• Respond to extension claims promptly and with reasons.
• Treat the current completion date as controlled information: know the original date, every approved extension and who approved it. Several competing ideas of “the” date make forecasts and damages calculations unreliable.

Claims are built from evidence

Whatever the type of claim, whether delay, variation, unexpected site conditions, suspension or extra work, the evidence needs are similar. Think of a claim as a stack:

Keep entitlement and amount separate. A party may have a valid entitlement but weak evidence of cost, or excellent cost records but no contractual basis for recovery. Treating them as one argument confuses both.

Good evidence also creates settlement options. When both parties agree on the facts, negotiation can focus on the genuine differences. When the facts themselves are disputed, both sides drift to extreme positions. For any significant event, a short neutral chronology written early, setting out what happened, what documents exist and what is still uncertain, helps the business understand its position before advocacy shapes the story.

Learn from delay across jobs

One delay assessment answers a question about one job. Delay records across several jobs answer questions about the business. If late information from the customer, slow approvals or access problems keep recurring, the issue is not claims administration; it is planning, decision-making or how jobs are set up. If one kind of supplier repeatedly causes delay, it is a sourcing problem. Classify significant delays by cause and use the pattern to improve quoting, contingency and scheduling.

A worked example

This is an illustration. A small electrical contractor is subcontracted to a builder for the fit-out of a three-level office. The subcontract has a completion date of 30 June and liquidated damages of $500 a day.

The builder hands over the level 2 ceiling space 12 days late because of problems with another trade. The electrician gives written notice within the time the subcontract requires, attaching photos, the builder’s emails and daily diary entries.

The electrician then looks at the effect rather than just the dates. Its programme, saved the week before the event, shows that the level 2 rough-in had 4 days of float before it would affect completion. During the delay, the crew moved to level 3 work that had been planned for later, absorbing another 5 days. The net effect on completion is about 3 days. Separately, the electrician’s own switchboard delivery was two days late, which is its own responsibility; it records that cause separately with its own dates.

It claims a 3-day extension, with the reasoning, rather than 12. The builder at first replies “no extension, just catch up”. The electrician sets out the options in writing:

• With a 3-day extension, finishing on 3 July costs nothing in liquidated damages.
• Without one, it could finish on time by adding an electrician for three days, at about $2,280 (3 days × 8 hours × $95). It asks the builder to confirm in writing whether it is directing acceleration and on what commercial basis before committing the extra labour.

Faced with a clear, evidence-based claim for 3 days rather than an inflated one for 12, the builder grants the extension. The electrician records the cause in its own delay log; over the next year, late handover of ceiling spaces turns out to be a recurring pattern with this builder, and the electrician starts allowing for it in its programme and pricing.

How this applies to a small Australian business

Small businesses face delay from both sides: as contractors and subcontractors, and as customers commissioning work.

• Read the time provisions before signing: what qualifies for extra time, notice requirements and any damages for delay.
• Give notice early and in the required form, with evidence attached.
• Keep a dated programme and save versions.
• Keep daily records: diaries, photos, emails, labour and equipment on site.
• Assess effect, not just dates: float, resequencing and mitigation.
• Record overlapping causes separately.
• Agree acceleration in writing before spending.
• As a customer, list what the contractor depends on from you and make sure the contract can extend time for your delays.
• Get legal advice before relying on delay provisions in a dispute. For payment disputes on construction work, each state’s security of payment legislation may also be relevant.

Signals worth watching

• Delay discussed only as days behind, with no causes.
• Notices sent late or not at all.
• Programmes that are never saved or dated.
• Demands to “catch up” with no discussion of cost.
• Several versions of the completion date in circulation.
• The same causes of delay recurring across jobs.

Common mistakes

• Claiming the full length of an event without showing its effect on completion.
• Leaving delay analysis until the end of the job.
• Treating notice as confrontation and therefore not giving it.
• Accelerating informally and arguing about cost later.
• As a customer, causing delay without a working way to extend time.
• Mixing entitlement and amount into one argument.

Frequently asked questions

What if the contract’s notice period has passed? The consequences depend on the contract and the law. Some notice requirements are strict. Give notice as soon as you can and get advice.

Do we need planning software? Not for small jobs. A dated programme in a spreadsheet or simple scheduling tool, saved at each update, is far better than none.

Is it worth claiming small delays? Often yes, because small delays accumulate. A short, well-evidenced notice costs little and keeps options open.

What is float? Spare time in the programme between when an activity could finish and when it must finish to avoid delaying completion. Who is entitled to use float can itself be a question under some contracts.

Should we accelerate to avoid liquidated damages? Compare the cost of acceleration with the damages and the likelihood of an extension. If the delay is the customer’s responsibility, seek an extension or a direction with agreed cost first.

Questions to ask

• What caused this delay, and who bears that cause under the contract?
• Did we give notice on time and in the required form?
• What was the effect on completion, after float and resequencing?
• What records do we have from the time of the event?
• If we accelerate, who has agreed to pay for it?
• What do our delay records across jobs tell us about recurring causes?

Bringing it together

A schedule shows that a job is late; the contract and the evidence decide what follows. Trace each delay from event to responsibility, notice, effect on the work and effect on completion, and record mitigation along the way. Give notice early, keep a dated programme and daily records, and separate overlapping causes. Agree acceleration in writing before spending money. If you are the customer, know what the contractor depends on from you and make sure the contract can adjust time for your own delays. Evidence gathered while events are happening turns most delay disagreements into manageable conversations instead of disputes.

---

Source: KEVOS notes, drawing on teaching material on contract administration, extensions of time, delay and acceleration, liquidated damages, the prevention principle and claims management under standard construction contracts. Examples and figures in this article are illustrations. This article is general information, not legal advice.