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Industry Updates

Contracts May Protect Builders During COVID-19

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The coronavirus (COVID-19) pandemic is having drastic effects on the world, including the construction industry. But as builders look for ways to limit the spread of the virus on their sites or cope with project delays, they may also want to take another look at the contracts they signed, real estate news site GlobeSt says.

By doing so, they may ensure that they will not be defaulting on projects due to conditions caused by the virus. Michael Keester, a shareholder and partner at law firm Hall Estill, told the website that lawyers for builders and project owners will be reviewing the contracts to see what their rights and duties are even after the virus.

“There are many terms that will be relevant to those discussions, including the various contractual terms relating to the contractors’ schedules, substantial completion, delays, liquidated damages and other contractual provisions,” Keester said.  One important provision is §8.3 of the General Conditions of the AIA Forms, e.g., A-201-2007.

According to GlobeSt, the provision allows certain delays are excused and justify contract time extensions. “These include delays caused by ‘unusual delay in deliveries, unavoidable casualties or other causes beyond the contractor’s control … or … other causes that the Architect determines may justify delay,’” Keester added.

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