Extension of time claims: everything turns on the notice
An extension of time moves the date for practical completion, which is what stops liquidated damages running against you. In most standard forms that entitlement depends on written notice given within a period the contract fixes, and the period is often short.
In short
- An extension of time is a shield, not a sword. It moves the date for practical completion and protects you from liquidated damages, but it does not by itself pay you anything.
- Delay costs are a separate claim, recoverable only where the contract allows them and often only for particular categories of delay.
- Standard forms commonly make written notice a condition of the entitlement. Where a clause is drafted that way, no notice means no extension, even where the delay was the principal's doing.
- The contract sets the notice period and special conditions frequently amend it, so we do not publish a day count. Find the period in your own executed contract before you need it.
- Where a principal causes delay the contract's extension machinery does not cover, time can be set at large and the liquidated damages regime can fail.
Delay is normal — wet weather, a late council determination, a variation directed in week nine. What turns ordinary delay into liability is a delay that was never claimed the way the contract required. The notice is usually not merely evidence of the entitlement. It is a condition of it.
What an extension of time actually does
It moves the date for practical completion — and no more, though builders routinely expect otherwise.
- It is a shield, not a sword. An extension protects you from liquidated damages by moving the date they run from. By itself it puts nothing in your hand.
- Money is a separate claim. Delay costs — prolongation, extended preliminaries, standing plant — are recoverable only where the contract says so, and often only for particular categories of delay. Many forms grant time for wet weather but not the cost of it.
- Not every delay qualifies. The contract lists the events that entitle you to one. A delay that is genuinely your own moves nothing.
The notice as a condition of the entitlement
Standard forms commonly make written notice, given within a stated period of the delay event or of the contractor becoming aware of it, a condition of the entitlement rather than an administrative courtesy. Where a clause is drafted that way it is given effect: no notice, no extension — and the fact that the delay was real, documented and the principal’s own doing does not answer the point.
Whether your clause has that effect is a question of construction. Language making the entitlement conditional, or barring a claim not notified in time, is usually decisive; a clause that merely says notice shall be given may not be.
We have not put a notice period in this article, deliberately: periods differ between forms and editions, and special conditions routinely amend them. Your executed contract sets the period. Find it before you need it.
The clock usually starts before you know how bad it is. Periods commonly run from when the delay event occurs or becomes apparent — not from when the delay ends, and not from when you can quantify it. Notify on the event; particularise afterwards, where the contract allows it.
What the notice generally has to contain
- Identify the clause. Say that it is a notice of delay and a claim for an extension of time under the clause relied on. A complaint about the programme is not one.
- Identify the event, with dates. Not “weather” but the days lost, the activities affected, and the rainfall record or site diary relied on.
- Say what it delayed. The activity, and why it governs the completion date. Delay to work off the critical path may entitle you to nothing.
- Claim a period, or reserve it. Where the extent is not yet known, say so and say when you will particularise.
- Serve it properly. On the person the contract nominates, in the manner it requires, keeping proof of the date.
Concurrent delay
Concurrent delay is where two delaying events overlap, one entitling the contractor to an extension and one not — the principal’s late design information and your own late subcontractor delaying the same activity in the same fortnight. There is no settled Australian answer, which is why your clause matters more than the general law. Some forms grant time but not cost where delays are concurrent. Some deny the extension where any part of the delay is the contractor’s. Some are silent, leaving causation and delay analysis — expert evidence — to decide it.
The prevention principle, and time set at large
The prevention principle is that a party cannot insist on performance by a date its own conduct prevented the other from meeting. Where a principal causes delay the contract’s extension machinery does not cover — late access, late information, a stream of directed variations — the date for practical completion can be displaced. Time is then said to be at large: the contractor must complete within a reasonable time, and the liquidated damages regime, which needs a fixed date to run from, can fall away.
Two things stop that being an escape hatch. Many forms give the superintendent or the principal power to grant an extension whether or not the contractor claimed one, and there is New South Wales appellate authority that such a power must be exercised honestly and fairly. And where the machinery covers the delay, the principle does not rescue a contractor who failed to use it: it answers a gap in the contract, not a missed notice.
Residential work has a second layer
On residential building work the contract is not the only source of the time obligation. The Home Building Act 1989 (NSW) implies statutory warranties into contracts for residential building work, including a warranty as to time: that the work will be done with due diligence and within the time stipulated, or where none is stipulated within a reasonable time. Those warranties cannot be excluded by agreement. So delay on a residential job can be put against you twice — as liquidated damages under the contract, and as a breach of statutory warranty in a defect and warranty claim.
If liquidated damages are already being deducted
Liquidated damages are recoverable at the agreed rate without proof of actual loss. That does not make a deduction unanswerable. Four questions stay separate: was the delay ours; was an extension claimed in time; is the rate a genuine pre-agreed figure rather than a penalty out of all proportion to the legitimate interests it protects; and did the principal itself cause delay the contract gives no extension for. A deduction can survive three and fail on the fourth.
What to do this week
Read the extension of time clause in the executed contract, with any special condition that amends it, and note what starts the period and who the notice goes to. Notify on the event rather than the final number. Keep the programme: site diaries, dated photographs and delivery dockets are what make a claim assessable rather than merely asserted.
We act for builders, contractors and developers in building contract disputes, including delay and liquidated damages claims. We do not act for homeowners or owners corporations bringing claims against a builder.
This article is general in nature and is not legal advice, and reading it does not create a solicitor–client relationship. It states the position as at the date above; the law changes, and this may since have been overtaken. Get advice on your own matter before acting on it.
Questions builders and contractors ask us about delay.
We missed the notice period. Is the claim dead?
It depends on how the clause is drafted and on what else happened. Where notice is a condition of the entitlement, missing it is usually fatal to that claim. It is still worth checking whether the clause really is conditional, whether the superintendent or the principal has a power to extend without a claim and how it has been exercised, whether earlier correspondence answers the notice requirement, and whether the principal caused delay the clause does not cover at all.
Does an extension of time get us paid for the delay?
Generally not on its own. An extension moves the date for practical completion and protects you from liquidated damages. Delay costs are a separate entitlement that exists only where the contract creates one, and many forms grant time for events such as inclement weather without granting any cost. Check whether the event you are notifying is one your contract treats as compensable, and claim accordingly.
The principal keeps directing variations and the job is months late. Where does that leave us?
Directed variations are commonly listed as a qualifying cause of delay, so the first step is still a notice for each of them. Where the principal's conduct has caused delay the extension machinery does not cover, the prevention principle may displace the completion date and set time at large, which would take the liquidated damages regime with it. That is an argument about your particular clause, not a general rule.
Both sides caused the same delay. Who wears it?
That is concurrent delay, and there is no settled Australian answer, so the contract usually decides it. Some forms grant time but no cost where delays overlap. Some refuse an extension where any part of the delay is the contractor's. Where the form is silent, the argument runs on causation and on delay analysis, which means expert evidence. Read the clause before assuming either position.
Tell us what's happened.
Tell us the date of the delay event, what notice went out and when, and what your contract says about it. You will get a straight answer about where the claim stands and what the next step is.
Information on this site is general in nature and is not legal advice, and may have been overtaken by a change in the law. Contacting us does not create a solicitor–client relationship.