Delay and extension of time: the real issue in conflicts between time-bar provisions and prevention principle

Abstract

This study looks at the real issue in the conflicts between time-bar provisions and prevention principle in construction contracts. Prevention principle normally refers to acts of prevention which prevent the contractor from completing on time which resulted in time to be “at large”. The employers introduced conditions precedent or time-bar clauses to alert them to the contractors’ claims for delays and extension of time. However, prevention principle still presents a formidable barrier to the employers. It is not fair to the contractors because extension of time has not been granted and delay damages deducted merely because of the failure to give notice rather than for failure to progress with the works. This study was carried out mainly through documentary analysis of law cases reported in Lexis Nexis, construction law journals and articles. It does not cover concurrent delay. Case law on this point is divided. In an Australian case of Gaymark v Walter Construction the court decided in favor of prevention principle. In a more recent Scottish case of City In v Shepherd Construction the notice requirement as a condition precedent overrides the prevention principle. When the conflict finally tested in England in 2007 in the case of Multiplex v Honeywell, the judge doubted that Gaymark was correctly decided and represents the law of England. In another case of Steria Ltd v Sigma in the same year the English court arrived at the same conclusion that the prevention principle does not mean that failure to comply with time-bar provision put time at large if the contract provides for extension of time. The real issue is not so much on the conflicts between time-bar clauses and prevention principle but rather between such provisions and the doctrine of freedom of contract. Prevention principle is not a rule of law but merely a rule of construction and proximate causation analysis can exclude its operation if there is a properly drafted time-bar clauses. It is hoped that this study may help construction practitioners such as arbitrators and contract administrators in dealing with time-bar disputes at a preliminary stage with less time and cost.