The coronavirus is interrupting life as we know it, including construction projects. Throughout the country, contractors are issuing notices of schedule delays and how you respond to such a notice will be crucial to protecting your rights under your contract. Here are some topics to consider when reviewing a notice of delay.
Review the Entire Notice
This may seem obvious, but dig into the notice to fully understand the basis for the delay and potential impact. Is the notice of delay simply informing you that the project will be pushed back for a few weeks or is it telling you that you will need to accelerate the work in a few weeks?
Does the Notice Comply with the Contract?
Just because you received a notice does not mean that its effective notice. It is worth your time to review the underlying contract and assess whether the notice meets the requirements of the contract. For example, does the contract require that notice be provided within a certain number of days of learning of the delay? And, if you can determine that the notice is not timely, what does that mean for the project?
Respond to the Notice of Delay, in Writing
Regardless of whether you are the upstream or downstream contractor, you should respond to the delay, in writing. You will need to assess whether to contest the notice, and if you do not contest a deficient notice, how will that impact your ability to challenge the notice at a later date? If you are the upstream contractor, and you decide the notice is sufficient, you should indicate what relief you will provide. You may also want to include a reservation of rights and the impact the notice will have on liquidated damages.
Consider All of your Options
When responding to a Notice of Delay, dig into your contract to make sure you are considering all options. Can you require a downstream contractor to accelerate its work? Does your contract allow you to hire supplemental contractors to maintain the schedule? Does the Notice of Delay trigger notice obligations to upstream contractors or the owner?
When you receive a Notice of Delay, be prepared to assess all of your options under all contracts. Of course, consultation with experienced construction counsel can always help you navigate these notice and other contractual issues.