Prevention and the Allocation of the Risk of Project Delays: Evolution or Revolution?

Mathew Stulic

May 2010

A paper based on a first prize entry in the Hudson Prize essay competition 2009 presented to a meeting of the Society of Construction Law in London on 18th May 2010.

In this Hudson prize winning paper, Mathew Stulic looks at the movement in English caselaw towards holding that, if employer-caused delays cause a project overrun but mandatory extension of time notice provisions (ie clauses whereby the contractor may apply for an extension of time for a range of causes of delay - including employer-caused delay - and if objective criteria are met, an extension must be granted) are not complied with, the mere fact of such non-compliance breaks the causal link between the employers' act of prevention and the contractor's liability for liquidated damages. He considers the Australian and Scottish cases, before looking at the recent English authorities. Does the mere non compliance with mandatory extension of time clauses exclude the operation of the prevention principle (namely that a party to a contract can not insist upon performance of a contractual provision if the acts or omissions of the party insisting on that condition are the reason that the provision has been breached)?

Allocation of the risk of project delays - The prevention principle - The issue - Austotel - Gaymark - Peninsula Balmain - The City Inn decisions - Multiplex - Steria - Conclusion.

The author: Mathew Stulic is a senior associate in the Construction and Major Projects Group, Clayton Utz, Sydney, Australia.

Text 15 pages.