What do I look for in the construction contract to protect me from delays?

Most homeowners contract with builders to complete the project in a certain amount of time, but one of the most common disputes between builders and homeowners involves delays in construction. Thankfully, there are some simple measures that can be added to a construction contract to protect both you and the builder if construction delays occur.

Reasonable Delays and Construction Contracts

Whether it’s a defective pipe that has burst into the foundation and requires replacing or a boulder discovered under where the swimming pool was planned to go, unforeseen delays happen in building projects. In order to avoid isolating your builder and to prevent him from being too concerned with the bottom line, it is imperative to include an exception in the construction contract for reasonable delays.

In the construction contract, the provision can simply read: “The builder herein agrees to have substantially completed the work for this project by (give a reasonable date). Substantial completion is defined as completion of more than 75 percent of the building. Extensions may be granted at the owner’s discretion for unforeseen delays.” Including this provision in the construction contract ensures that the builder will contact you with information about delays and give you the final say as to whether or not it warrants and extension.

It is also important to be realistic if the delay is caused by a change you requested that is not included in the original construction contract. For instance, if you decide that you wish to change the building plan halfway into the project, be prepared for an addition to be tagged onto the construction contract granting the necessary time extension.

Unreasonable Delays and Construction Contracts

Sometimes builders make mistakes that will cost you money. For instance, a new builder improperly compacts the substrate resulting in a visible crack in the foundation that requires the foundation to be redone. This is clearly a mistake on the part of the builder that should not come out of your bottom line. In cases
where the delays are the fault of the builder, you do have the right to charge the builder for your damages. A provision in the construction contract for this type of delay should state: “Any delays that are caused from the negligence of the builder are not considered reasonable delays. Should an extension be required for negligent delays, the cost of the delay will be subtracted from the final cost of the project and payment will be withheld until the project is completed.” This provision in the construction contract makes it clear to the builder that they will be paid in full unless they do something careless while on the job.

Case Studies: Protecting Against Construction Delays in Contracts

Case Study 1: The Importance of Including a Provision for Reasonable Delays

Mr. Thompson engaged Perfect Homes Construction to build his custom-designed house within a specified timeframe. Understanding the potential for unforeseen delays in construction projects, Mr. Thompson insisted on including a provision for reasonable delays in their construction contract.

The provision outlined that Perfect Homes Construction would aim for substantial completion of the project by a specific date, with substantial completion defined as finishing over 75 percent of the construction. Furthermore, it allowed for extensions to be granted at Mr. Thompson’s discretion for unforeseen delays.

This provision became essential when unexpected challenges emerged during the construction process. For instance, a faulty electrical system was discovered during the inspection, requiring extensive rewiring. Thanks to the provision, Perfect Homes Construction promptly notified Mr. Thompson about the delay and sought his approval for an extension.

This open communication and mutual agreement on time extensions not only helped manage expectations but also maintained a strong working relationship between Mr. Thompson and the construction company.

Case Study 2: Addressing Unreasonable Delays Due to Builder Negligence

Mrs. Ramirez hired Stellar Builders to construct a commercial property for her business venture. Unfortunately, Stellar Builders made a significant mistake during the construction process, leading to substantial delays and financial consequences for Mrs. Ramirez. They failed to obtain the necessary permits before starting the project, resulting in a temporary work stoppage and further bureaucratic complications.

To safeguard her interests and hold Stellar Builders accountable for their negligence, Mrs. Ramirez ensured that their construction contract included a provision explicitly addressing delays caused by builder mistakes. The provision stated that any delays resulting from the builder’s negligence would be deemed unreasonable.

It further specified that the cost of the delay would be deducted from the final project cost, and payment to Stellar Builders would be withheld until the project was successfully completed and met Mrs. Ramirez’s expectations.

By including this provision, Mrs. Ramirez protected herself from financial losses and created a strong incentive for Stellar Builders to prioritize due diligence in their future projects.

Case Study 3: Addressing Delays Resulting From Subcontractor Issues

Mr. and Mrs. Johnson embarked on a home renovation project with Dream Homes Construction. During the construction process, unforeseen delays arose due to issues with subcontractors. One of the subcontractors failed to deliver materials on time, significantly impeding the progress of the project.

Recognizing the need to address delays resulting from subcontractor issues, Mr. and Mrs. Johnson made sure to include a provision in their construction contract. The provision stipulated that Dream Homes Construction would be responsible for managing subcontractor delays and ensuring they did not impact the overall project timeline.

It further stated that any additional costs incurred due to subcontractor delays would be borne by Dream Homes Construction, without passing them onto the homeowners.

By including this provision, Mr. and Mrs. Johnson protected themselves from potential delays caused by subcontractors and avoided additional financial burdens associated with those delays.

Getting Help

Construction law is a very complex area of the law and the construction contract’s phrasing will differ from state to state. To make certain that your contract is in compliance with your state’s builder laws, it’s best to consult a construction attorney in your area.