Contracts & Force Majeure
The following was provided by the British Columbia Construction Association (BCCA) and intended as information only, it should not be treated as legal advice.
(Updated Information on Construction Contracts and COVID-19 from Jenkins Marzban Logan LLP on March 19, 2020)
COVID-19 and “Force Majeure” Clause
Once Coronavirus and COVID-19 became known, it can be argued that it no longer qualifies as a force majeure event. Coronavirus and COVID-19 may disrupt construction supply chains and workforce availability. We asked our contract experts if CCDC2 clauses provide protection for contractors in these circumstances. Here are the basics:
The virus falls under the definition of force majeure in CCDC section 6.5.3.4:
- “Any cause beyond the Contractor’s control other than one resulting from a default or breach of contract by the Contractor.”
This grants an extension of time only (not money):
- The Contract Time shall be extended
for such reasonable time as the Consultant may recommend in consultation with the Contractor. The extension of time shall not be less than the time lost as the result of the event causing the delay, unless the Contractor agrees to a shorter extension. - The Contractor shall not be entitled to payment for costs incurred by such delays unless such delays result from actions by the Owner, Consultant or anyone employed or engaged by them directly or indirectly.
Time is of the essence:
- 6.5.4 -notify within 10 days of the delay, or lose the right of delay claim.