On Although the ever-increasing restrictions may not have directly prohibited construction projects from continuing, nevertheless, impacts on projects are already being felt, and are likely to increase and become more disruptive. While not prohibiting construction, many jurisdictions are no longer accepting or processing permits, or conducting inspections. Consequently, many projects will not be able to timely start, move forward or obtain a certificate of occupancy. This will inevitably lead to project delays, with potential related litigation.
While the majority design professionals’ project contracts do not have liquidated damage or penalty provisions related to schedules for completion (or incentives), some do, such as governmental contracts. For those projects, it is incumbent on design professionals to address the conditions adversely affecting completion deadlines in writing, and to seek relief in writing from those deadlines. Design professionals that do not have specific schedules for completion can still face potential liability for delay(s) on the theory that the time it took for them to perform their contractual responsibilities was unreasonable and fell below the ordinary standard of care in the community. Accordingly, we encourage ALL design professionals whose delivery of project responsibilities that are being negatively impacted by COVID-19 measures, to expressly address these impacts and the delays that they are causing in the performance of their work. Such correspondence should be part of design professionals practice in keeping their clients informed. Design professionals with construction administration responsibilities on projects experiencing delays or stoppages should also warn contractors to protect work and materials from potential exposure to elements.
It is also anticipated that as the virus will slow construction progress, diminish the workforce and potentially delay payments. Some banks will not issue checks larger than $10,000 without face to face interaction, and many banking facilities are closed. We would caution design professionals against using delayed payments as a trigger to enforce contractual provisions to stop work or to terminate their contracts as this will may potentially lead to claims down the road, and be viewed unfavorably by prospective juries if any such cases reach trial. Following these best practices should help avert many claims when restrictions ease and projects resume.
If you have any questions or would like further information as to how we can assist you, please contact Gary R. Shendell at email@example.com
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