Construction Delays and Force Majeure Clauses
Force majeure is a fancy term describing unplanned events that have a major impact on construction projects and may cause significant delay or termination of a project. It’s more than just natural disasters, though Dorothy’s house whirling around in a Kansas tornado in The Wizard of Oz (1939) is not far from the kind of event deemed a force majeure. Force majeure clauses triggered numerous disputes and litigations during the COVID pandemic. That was when the standard forms of “force majeure” clauses that many parties hardly bothered to read during pre-COVID negotiations became very important for their clients. Delays in construction can be especially significant if the contract provides for reductions in compensation for each day completion is delayed beyond a set deadline, or bonuses for each day that the construction is completed before a set deadline.
What Causes Construction Delays?
Construction projects may be delayed for many reasons, including severe weather, labor shortages, supply chain disruptions, or sudden increases in material costs. Take, for instance, this past winter in New Jersey. Near zero degree days saw frozen ground and snow, which affected construction schedules and site access. In the past few months, heavy, sudden rains caused downed trees and power outages. Substantial increases in material costs have occurred in recent history, caused by inflation, wars, and trade wars involving tariffs.
In a perfect world, there would be no delays, and projects would run smoothly until the completion of construction. However, a perfect world is rarely – or never – reality.
What Is a Force Majeure Clause?
A force majeure clause generally addresses unexpected events beyond the parties’ control that may interfere with contractual performance. In construction agreements, these events can include major storms or natural disasters such as flooding, labor disruptions, pandemics, power shortages, or armed conflict such as war or invasion. The specific scope of a force majeure clause depends on the contract language.
Involving an attorney to review your contracts ahead of negotiation will help alleviate any confusion or disputes in the event of a force majeure, buttoning up potential situations that can affect the area the construction is in. For example, the contract for a commercial project on the Jersey Shore would likely include clauses for flooding and shoreline-specific issues, while the contract for a project set in the Watchung Mountains might include clauses on landslides, among other general events.
How Might These Clauses Operate in Practice?
In a construction dispute, a contractor experiencing delays from a severe weather event would look to the contract’s force majeure clause and to any other weather-related clauses. Construction contracts often have specific clauses about weather delays, including details about the type of weather that would cause a weather delay. The contract language may address schedule extensions, cost responsibilities, or other consequences of delay. The contract should require documentation of site damage, appropriate steps to mitigate, and official reports pertaining to the event that caused delay, and should document the work prevented by the event.
Some forms of force majeure clauses are extremely broad and include any adverse weather event or any supply chain disruption. Owners should try to limit the breadth of such clauses to make sure they are limited to only reasonable protections for contractors.
Why Contract Language Matters
Construction delays and force majeure disputes often turn on the specific language of a contract, making legal review essential in clarifying how risk, notice obligations, and delay-related costs are allocated. While no contract can prevent every disruption, understanding these provisions can help the parties better anticipate how unexpected events may be addressed if project conditions change.
For more information on construction contracts, please do not hesitate to reach out to me at sjreed@norris-law.com.
About the Author- Biz Law
Steven J. Reed focuses his practice on construction contracts, business transactions, commercial real estate, franchising, and commercial litigation. He is licensed in New Jersey and New York.