PRINCIPLES IN ASCERTAINING QUANTUM OF EXTENSION OF TIME IN CONSTRUCTION CONTRACTS

Abstract

Time, in construction projects, is monetary profits to both the Contractor and the building owners. Time to the Contractor is reflected in his liability to pay liquidated damages for late completion, while on the other hand, time is the Employer’s direct loss for late handover. Many construction disputes arise from unsettled claims for time, which poses the need to constantly review and improve the Singapore’s SIA Conditions of Building Contract and the Public Sector Standard Condition of Contract (PSSCOC) to prevent and resolve disputes between the parties. With the two common forms of contract and established case laws, some fundamental principles in dealing with Extension of Time have been validated and followed. Nevertheless, despite the effort to regulate procedural requirements and conditions for Extension of Time, assessment of the quantum of Extension of Time is still left with little guidelines. As the quantum of Extension of Time is assessed mainly through the assessor’s judgements and estimation based on information and particulars provided by the Contractor (clause 23(4) of the SIA conditions of contract), the lack of specific principles to govern the ascertainment is a potential area for disputes. This research aims to study actual approaches in ascertaining the quantum of Extension of Time currently being used by industrial practice. Contradicting approaches show that the industry has yet established any conformity in the principles to ascertain the duration of Extension of Time. This research proposes a guideline to govern the principles in which the ascertainment of the quantum of Extension of Time should be based on. The guideline is a five-question test dealing with some of the most fundamental and radical issues for decision making process. It is hoped that the adoption of the guideline and its future improvement would bring about a consensus among the parties so that disputes regarding Extension of Time can be mitigated.