June 2, 2020 | Share
How Can Companies Deal with Construction Delays Caused by the COVID-19 Crisis?
Among the numerous and wide-ranging impacts of the novel coronavirus (COVID-19) crisis, many construction projects in South Florida have experienced significant delays as a result of workers being forced to stay home and social distancing guidelines limiting the number of workers who can be on a jobsite at any one time. In many cases, this has led to significant financial repercussions for all parties involved, and delayed performance (or nonperformance) has led many parties to evaluate their options for enforcing their contractual rights.
5 Important Considerations for Dealing with Construction Delays During the COVID-19 Pandemic
While the impacts of the COVID-19 crisis have been unprecedented, the legal issues arising within the contexts of construction contract disputes are not new. If your company is facing the prospect of litigation, here are five important considerations from the Fort Lauderdale construction lawyers at Saavedra Goodwin:
1. Should You Litigate or Renegotiate?
While litigating is certainly an option, renegotiating may be an option as well. Due to the unique aspects of the COVID-19 pandemic, many companies are finding creative ways to modify the terms of their agreements in order to account for the present circumstances.
2. Does Your Contract Excuse Performance Due to the COVID-19 Crisis?
If you are considering litigation, or if you believe that your company may be at risk for being sued, it will be important to review the relevant contract to determine whether performance is excused. The contract’s force majeure clause (among others) may directly or indirectly account for the possibility of a pandemic; and, if it does, it is possible that non-performance will not be deemed a breach of the agreement.
3. What Remedies are Available (Both Contractually and Practically)?
When considering litigation, it is important to consider what remedies are available. This means not only reviewing the relevant agreement, but also assessing the practicalities of enforcement and collection. If a vendor or subcontractor has stopped performing because it has run out of money, then litigating may not be worth it—although insurance coverage and various other potential sources of funds should be considered as well.
4. Can You Find a Replacement Party to Perform?
Another practical consideration that should inform companies’ decisions regarding construction-related litigation during the COVID-19 pandemic is: Is there a suitable replacement for the non-performing party? Many businesses are struggling during the pandemic, and certain business sectors have been hit particularly hard. If there are no viable alternatives available, then working out an amicable solution may be the best option.
5. What Additional Delays and Costs May Be at Risk?
Finally, what additional delays and costs will be at risk if you choose to pursue litigation? If you attempt to renegotiate or find another creative solution, what are the chances that you will simply be delaying the inevitable? These types of considerations should not be ignored, and company owners facing construction-related contract disputes will need to thoroughly evaluate their options with the help of legal counsel.
Speak with a Fort Lauderdale Construction Lawyer at Saavedra Goodwin
Our firm provides legal representation for construction contract negotiations and litigation in South Florida. If your company is facing a delay caused by the COVID-19 crisis and you would like to speak with an attorney, we encourage you to call 954-767-6333 or contact us online for a confidential initial consultation.
Categories: Construction Law