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International Construction Law Review

IMPLIED TERMS AS TO PREVENTION AND EMPLOYER DELAY IN CONSTRUCTION CONTRACTS

AIDAN STEENSMA

Senior Associate, CMS Cameron McKenna LLP 1

Introduction

Modern construction contracts frequently include express rights to extend time for acts of prevention or employer delay. Many also include corresponding provisions for compensation or “loss and expense”, although often these are limited to specific types of events agreed between the parties. Situations therefore arise where acts of prevention or employer delay provide an extension of time but for which no express right to compensation has been agreed. In such cases, as in others where compensatory provisions are entirely absent, a question arises over the extent to which rights of compensation can be implied.
Implied terms of this kind are usually advanced on the basis of principles of “non-hindrance” and “co-operation” generally applicable to all contracts. Perhaps because of the general nature of these principles, there is considerable divergence among the common law authorities as to how they apply to the specific challenges of co-operation and co-dependence posed by complex construction projects.
This article explores the operation of these principles and their potential applicability to large commercial construction projects. The first two sections consider the common law’s approach to “non-hindrance” and “co-operation” generally, whilst the third and fourth sections deal specifically with the law relating to construction, including brief consideration of the FIDIC Conditions of Contract.

The basis for implying terms

As with any consideration of implied terms, it is necessary first to examine the basis upon which terms may be implied. This is particularly the case with terms regarding co-operation and non-hindrance, as they have a tendency to be advanced in abstracto or by appeals to general notions of fairness. This has perhaps prompted one judge to note that: “[such terms] are regularly


Pt 1] Implied Terms as to Prevention and Employer Delay

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