A Path to Establishing Delay and Disruption Claims for Contracts Entered into Prior to the Start of the COVID-19 Pandemic

Since early 2020, COVID-19 has had devastating and ongoing health and economic impacts worldwide. The construction industry has not been immune to these impacts. Although construction was generally deemed essential, in some jurisdictions only certain sectors of the construction industry were deemed essential and therefore allowed to continue with work. Any construction that took place was subject to additional precautions that may have resulted in delay and disruption claims. The methodology of the paper involves a review of primary and secondary legal resources in the United States that are used to derive applicable rules of law. Those rules of law are then applied to force majeure contract language from the American Institute of Architects to outline the criteria for successful delay and disruption claims. For construction contracts entered into prior to the onset of the pandemic, delay claims will likely result only in an extension of the contract time, whereas disruption claims may result in additional time and/or money depending on how the contract addresses unforeseen costs. In the absence of express contract terms addressing unforeseen costs in a situation such as COVID-19, principles of equity will dictate whether additional compensation is granted.

Automated summary

Since early 2020, COVID-19 has had devastating impacts on health and the economy worldwide, including the construction industry. Construction work was considered essential in some jurisdictions, but additional precautions and disruption claims have led to delays. This paper reviews legal resources in the US and applies them to force majeure contract language to outline criteria for successful delay and disruption claims. Express contract terms or principles of equity will determine if additional compensation is granted for unforeseen costs like COVID-19.