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COVID-19 and Construction Project Delays in Australia


COVID-19 has presented all of us, across multiple industries and sectors, with new challenges to overcome and roadblocks to obliterate. Some days it can feel like we’ve got our new routines and mechanisms slickly working like clockwork, and other days there can be a spanner in the works that never would have happened pre-COVID. For example, construction projects worldwide have felt unprecedented delays – where has this left you and your company?


Construction project delays in Australia have come from huge price hikes in shipping units from countries such as China and Indonesia and through suffering delays of fabricated goods and equipment from other countries heavily affected by COVID-19.


Workers also suffered difficulties getting to the construction sites themselves, often not travelling interstate, leading to further construction project delays in Australia. These combined factors have led to delays and, in some cases, a full halting of construction projects in Australia.


The effect of these complications has thrown a spanner in the works, to say the least, and has called into question whether legal relief can be sought for Virtue Talent’s clients, many of which are stakeholders in construction engineering and infrastructure projects.


Let’s look at the possible legal reliefs for stakeholders who can no longer fulfil their obligations.


Force Majeure


Some contacts may include a force majeure clause in Australian Law. This is an event that is unforeseeable, external and irresistible. It must also establish the criteria for carrying out the project ‘onerous’ or difficult but rather completely impossible.


In Australian law, it must be included within the contract itself to be permissible. Therefore, it is important to carefully assess the criteria set out within the contract that may constitute force majeure.


Some contracts may specify that the force majeure can only affect the construction site itself to be permissible, whilst others will give more lenient versions, opening up the possibility to make claims regarding delays to materials being delivered from a worldwide commerce perspective.


Furthermore, a causal connection must be established. The countrywide impacts that the pandemic had on Australia cannot be disputed, so this part seems satisfied.


Frustration


If a contract does not contain a force majeure clause, parties can then look to the common law principle of frustration.


The frustration of a contract can be established when the duties or obligations of a party under the contract are either impossible or illegal to perform. It can also come into play when the obligations are no longer possible to perform due to radical changes in circumstances.


Extension of Time


Extensions of time may apply under contracts where stakeholders cannot have been reasonably expected to carry out their duties within the timeframe given. This can certainly apply to quarantine provisions and the effect on travel difficulties and illegalities.


Suspension


Projects can also have been reasonably delayed due to detecting a worker who has contracted COVID-19, leading to a full-site shutdown.


We hope you have found this helpful – please feel free to share this article, and we hope to see you on our blog again soon.


Disclaimer: This article is intended for general informational purposes. Always seek the advice of a specialist lawyer for your specific project and contract.


Sources:

https://batchmewing.com.au/force-majeure-construction/

https://www.nortonrosefulbright.com/en-mc/knowledge/publications/b971ed19/australia-relief-provisions-in-construction-contract-suites

https://uk.practicallaw.thomsonreuters.com/w-019-7960?transitionType=Default&contextData=(sc.Default)&firstPage=true

https://www.pwc.com.au/legal/assets/investing-in-infrastructure/iif-30-force-majeure-clauses-feb16-3.pdf

Virtue talent www.VirtueTalent.com partners with engineering and construction organisations to recruit skill shortage and underrepresented groups in the workplace; contact us to find out how we can assist in achieving your employment objectives.


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