I posted previously regarding the notice issues relating to delays and COVID-19. Here in Virginia, things got even more uncertain regarding the ability of construction companies to complete work in a timely fashion. Ralph Northam’s latest stay at home order that adds teeth to the prior executive order closing certain businesses, limiting gatherings, etc. only muddies the construction waters further.
While construction businesses have not been closed and construction projects can continue forward for now, the combination of other states’ actions, possble sickness, and some job sites limiting the number of individuals working on site has made the possibliity of delays more of a probability. From owners on down to suppliers and advisers (read construction attorneys, accountants and the like), COVID-19 affects us all. More than ever the notice provisions in your construction contracts must be followed to protect your bottom line.
In Virginia where the contract is king, failure to properly notify those that are required to be notified in the time provided in the contract documents may not only render any delay damage or additional time claims waived but can also open you up to liquidated damages or other contratual provisions that will lower the amount collected for your work. Needless to say, in these crazy economic times every dollar in the door is one more dollar toward surviving as a construction company so if anything err on the side of over notifying those up the contractual chain of potential and actual delays.
Another contractual term that must be “dusted off” in the face of this pandemic is the so called force majeure clause. This is that clause that is not often invoked because it deals with acts of god, labor strikes, earthquakes, hurricanes and tsimilar calamities outside of the control of anyone on the project. Because a pandemic of the type the US is facing has not occurred in the last 100 years, these clauses generally do not list pandemic as a specific cause of force majeure. However, many of these clauses include a catch all that may help. Carefully examine this clause in your contract to see what if any relief such a clause might give you should your project become stalled due to coronavirus related issues. Remember though that even with such a clause, notice will likely be necessary.
As always, please consult with a Virginia construction attorney when interpreting these nesting and complex contractual provisions. At least for now, Mr. Northam has not shut down law firms so my firm is available to assist you.
As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.
