New York late sunset skyline

United States: Construction force majeure and alternative relief

Force majeure and alternative relief under standard form construction contracts and local law

Global Publication May 2020

What is the most commonly used standard form construction contract used in the country?

AIA and ConsensusDocs are the most commonly used standard form construction contracts. However, our US construction team advocates for clients to use our bespoke documents instead of industry templates, especially for our owner clients. As you will see below, these documents, unless properly modified, provide incredibly broad definitions of force majeure.

Does the contract include provisions on force majeure

The AIA General Conditions document does not have a definition of force majeure. However, the typical AIA excused delay provision would typically cover events such as COVID-19.

AIA

“If the Contractor is delayed at any time in the commencement or progress of the Work…(3) by labor disputes, fire, unusual delay in deliveries, unavoidable casualties, adverse weather conditions documented in accordance with Section 15.1.6.2, or other causes beyond the Contractor’s control…or (5) by other causes that the Contractor asserts, and the Architect determines, justify delay, then the Contract Time shall be extended for such reasonable time as the Architect may determine.”

ConsensusDocs

Article 6.3.1 “If Constructor is delayed at any time in the commencement or progress of the Work by any cause beyond the control of Constructor, Constructor shall be entitled to an equitable extension of the Contract Time. Examples of causes beyond the control of Constructor include, but are not limited to, the following: (a) acts or omissions of Owner, Design Professional, or Others; (b) changes in the Work or the sequencing of the Work ordered by Owner, or arising from decisions of Owner that impact the time of performance of the Work; (c) encountering Hazardous Materials, or concealed or unknown conditions; (d) delay authorized by Owner pending dispute resolution or suspension by Owner under §11.1; (e) transportation delays not reasonably foreseeable; (f) labor disputes not involving Constructor; (g) general labor disputes impacting the Project but not specifically related to the Worksite; (h) fire; (i) Terrorism; (j) epidemics; (k) adverse governmental actions; (l) unavoidable accidents or circumstances; (m) adverse weather conditions not reasonably anticipated. Constructor shall submit any requests for equitable extensions of Contract Time in accordance with ARTICLE 8.” ConsensusDocs 200 (2011, revised 2017) (emphasis added).

Does the contract include provisions for alternative relief that may be relevant to projects impacted by COVID-19?

Not typically, as both of the above provisions are quite broad.

Do the laws of the country provide for force majeure relief?

No. Parties could conceivably assert an impossibility defense to non-performance, however, if the parties otherwise contracted for such events, but the definition of force majeure does not include pandemics, or some other applicable definition of force majeure, a court is unlikely to agree with the impossibility defense.

Do the laws of the country provide for alternative relief that may be relevant to projects impacted by COVID-19?

No. Same answer as above. The courts will typically look to the contract to determine whether the parties defined force majeure. If the parties do not define force majeure or otherwise account for how to deal with delays caused by events outside the control of the contractor, a court could imply an implied force majeure definition based on the jurisdiction’s common law.



Contact


Recent publications

Subscribe and stay up to date with the latest legal news, information and events...