The Best Way to Prevent a Constructive Acceleration Claim
One reason why you want to give time extensions when time extensions are due is you don’t want to develop a situation where the contractor is entitled to a time extension, but the owner is refusing to provide one.
This can lead to a type of acceleration called, “constructive acceleration.” “Constructive” in this case meaning, “in effect.” Essentially, it’s an acceleration that is the result of the actions or behaviors of the parties. It would be in contrast, for example, to a directed acceleration.
In order to prove construction acceleration, the contractor must demonstrate five things:
The contractor has experienced what’s called an, “excusable delay.” An excusable delay is a delay for which the contractor is entitled to a time extension, usually a critical delay that’s not the fault and responsibility of the contractor.
The contractor then requests a time extension for that excusable delay.
The owner rejects or is silent as to whether a time extension will be provided. Because the contractor is not getting additional time to complete the work, the contractor is now concerned that they might be assessed liquidated damages. Or worse yet, that the owner might conclude that they are in fact in breach of the contract. Or the owner directs the contractor to finish the project by the original contract date without an extension.
The contractor, for that reason, gives notice to the owner that it will have to accelerate it’s work in order to finish the project by the originally contracted date.
And lastly, if they, in fact, do accelerate the project and spend money…if all those facts come together in accordance with the contract, and in accordance with the applicable case law in your jurisdiction…then the contractor may be entitled for reimbursement for their acceleration costs.
For those readers who would like to see the case law that supports this discussion about constructive acceleration, I’d be happy to share it with you. If you just send me an email at firstname.lastname@example.org, I’d be happy to share the case that supports the foundation for constructed acceleration that I just discussed.
The best way to prevent a constructive acceleration claim is to give a time extensions when it’s due. Don’t wait.
If you liked this article, be sure to sign up on the left side of our website to receive our Ideas & Insights.