By: Gregory L. Shelton
Shelton Law Carolinas
The ACC basketball tournament has been cancelled. It is time to start taking Wuhan Coronavirus seriously.
The adverse effects of the coronavirus are (at least) three fold. First, the supply chain of foreign-made materials will be interrupted, and the United States relies heavily on China for construction materials. Second, builders cannot build if they are sick at home. Third, disruptions in finance often affect an owner’s ability to pay.
Most construction contracts include a provision governing labor disruptions, riots, and force majeure events like hurricanes and floods.
Consider section 8.3 of the AIA A201-2017 General Conditions, which provides in part that the Contract Time will be extended when the Contractor is delayed by “labor disputes, fire, unusual delay in deliveries, unavoidable casualties, adverse weather conditions documented in accordance with Section 22.214.171.124, or other causes beyond the Contractor’s control[.]” (Emphasis added.)
Construction contracts allocate risks among the parties, and the prevailing default setting is to allocate a risk to the party who can best control that risk. Section 8.3 recognizes the fact there are some things that no party to the contract can control. Even today, as we are practised in the fine art of viral Twitter blamestorming, no one can seriously hold an owner, contractor, subcontractor, or supplier responsible for the viral pandemic that is Wuhan Coronavirus.
Those delayed by coronavirus can point to President Trump’s declaration of a national emergency earlier this morning to buttress a pandemic-based claim or defense. “National emergency” evokes war, pestilence, disease, and war. This goes far beyond the dog ate my homework.
While we do not yet know the full extent of the disruption, the prudent ones among you will start documenting when, where, and how the pandemic has interfered with deliveries, progress, or funding.
It will not be enough to show that a delay occurred during the pandemic. You must also prove the causal link between coronavirus and your delay.
That is where the lawyering begins.
Photo Attr: Wikicommons (Shawnfog)