Abstract
Begun in 2020 COVID-19 disease spread all over the globe and negatively affected all areas of human activities and societies inclusive engineering and construction projects. This paper analyses how COVID-19 implications can be used as a general excuse by a construction company to relief from contractual obligations, e.g., liquidated damages. To answer this question, we compared existing case law, previous court decision and project management literature with potential global and force majeure arguments based on COVID-19 cases. Our results showed that a general “free out of jail” card using COVID-19 argument is not applicable and COVID-19 cannot be seen per se as a force majeure in general and for every situation. However, if the effects from COVID-19 implications are beyond the parties’ control and evidence shows that the contractor is actually disrupted and severely delayed the contractor is entitled for an extension of time or a delayed delivery of his performances. The paper concludes among other details that a COVID-19 argument can only be based on existing contractual provisions, accurate records of the as-built situation, proper notices of all kind of impacts and cause-and-effect considerations. Despite of any warning and if a contractor decides to rely on a global COVID-19 argument only it is a very risky endeavor and may backfire on him later on.
Highlights
The outbreak of COVID-19 disease officially announced by WHO on March 11th 2020 negatively affected engineering and construction projects around the globe as much as it affected the societies in different ways and magnitudes
The goal of this paper is to assess and verify whether a contractor affected by COVID-19 implications can be relieved of contractual obligations, e.g., liquidated damages and can use contractual Force Majeure or other excusable disruption and delay provisions to seek for an extension of time (EOT) and additional compensation for such disruptions and delays
This paper shows that COVID-19 per se not Force Majeure. [17 - 23] The contractor should instead carefully examine and assess the contractual provisions linked to the pandemic disease COVID-19 and act
Summary
The outbreak of COVID-19 disease officially announced by WHO on March 11th 2020 negatively affected engineering and construction projects around the globe as much as it affected the societies in different ways and magnitudes. The same effect happened to the interrupted supply chain for construction materials, plants and equipment is relevant for the progress of construction project, which stuck either due to closed country borders or due to a lockdown of established transportation and traffic routes All of those shortages of labor and goods in general slowered or even stopped the progress and timely performance of a contractor while the contractor may bar and tight up to a concrete and fixed delivery time for the project and liability for delays associated with a contractual liquidated damage provision. Without doubt events to cause delays and disruption often if not always happens to any small, middle or large-scale construction project worldwide Events for such delays and disruption have different nature and associated with different circumstances, e.g., disorganization or mismanaging of a party, wrong or late or even no design, late procurement, wrong plant or machinery, wrong skills of labor, miscalculation of the construction sequence etc. This paper seeks to list and identify related issues to frame the COVID-19 implications and the delay and disruptions effects on construction projects hereafter. [1,2,3] COVID-19 as a virus can be seen as an “external” cause for delays and disruptions
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