Extension of Time, Notice and Liquidated Damages
A 14-storey office building in Colombo is under an ICTAD-style lump-sum contract with a 24-month completion period. Liquidated damages are 0.05% of the contract sum per day, capped at 10%. The architect acts as contract administrator. The contractor submits an extension-of-time claim 45 days after the delaying event, seeking 60 days for 'unprecedented rainfall' and a cement shortage. The architect's daily records show 12 days of rainfall above the 10-year monthly average, but also that the contractor ordered curtain-wall materials three months late and had only one cement supplier. The contractor argues that both events were beyond its control and that the architect must grant the full period. The employer is pressing the architect to certify liquidated damages immediately and to reject the claim as late. The contract requires notices within 28 days and contemporaneous records.
1. How should the architect assess the extension-of-time claim?
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The claim should be assessed event by event, not as a single 60-day block. The rainfall event: 12 days above the 10-year average is evidence of exceptionally adverse climatic conditions, but the contractor must show that those days actually affected the critical path. The cement shortage: a shortage may be an employer risk only if it was exceptional and not caused by the contractor's procurement. Here the contractor relied on one supplier and ordered curtain-wall materials three months late, so at least part of the delay is concurrent or contractor-caused. The 28-day notice requirement is a condition precedent to an extension under many contracts; a claim submitted 45 days after the event may be time-barred unless the contract allows late submission or the architect waives the time bar. The architect should not simply reject the whole claim as late if the contract gives discretion; but should not grant 60 days without a delay analysis. A fair outcome might be an extension for the verified rainfall days on the critical path, with the balance rejected.
2. What must the architect decide before certifying liquidated damages, and how should the determination be recorded?
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Before certifying liquidated damages, the architect must decide the extension of time. If an extension is due, the completion date moves and LDs cannot run for that period. LDs are a genuine pre-estimate of loss, not a penalty; the architect should apply the contract rate only to the period of culpable delay after the extended completion date. The architect should issue a written determination with reasons: the notice issue, the critical-path evidence, the concurrent delay, and the resulting extended completion date. The employer's pressure to 'certify immediately' is not a reason to skip the determination. If the contractor disputes the determination, the contract's dispute procedure applies. The architect should also check whether the employer has already taken occupation or waived LDs by its conduct. The certificate should be clear about the amount, the period and the basis, so that it can be defended.
3. What record-keeping and administration lessons should the architect draw from the dispute?
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The case shows why contemporaneous records matter. The architect's daily records, progress photographs, delivery logs and meeting minutes are the evidence that distinguishes 12 days of excusable rainfall from 20 days of late procurement. The architect should recommend that the contractor submit a proper delay analysis, not a narrative claim, and that future notices be tracked in a register. The employer should be advised that rejecting a claim solely because it is late may backfire if the delay was genuinely employer-risk and the contract allows late consideration. The architect should also review the contract's notice provisions at the start of the project and brief the site team. Good administration is not adversarial; it is the disciplined creation of a record that allows fair decisions.