If the construction contract has agreed on the division of responsibility for construction delay caused by epidemic prevention and control, it shall be handled according to the contract; If there is no corresponding agreement in the construction contract, it can be handled according to the following principles: 1 If the construction contract is signed before the outbreak of the epidemic in January 2020, the epidemic during the performance of the contract shall be regarded as force majeure.
If there are provisions on the cost of prevention and control measures in the policy documents issued by local government departments, such as the tips for safety and quality supervision of construction projects issued by Shanghai General Station of safety and quality supervision of construction projects on March 21, 2022, it is clear that “the cost of epidemic prevention and control shall be included in the project cost and shall not be apportioned to migrant workers.” The contractor needs to find out whether the construction contract stipulates that the documents issued by local government departments are regarded as “law” or an integral part of the contract, For example, clause 1.3 “law” of the construction contract (model text) (gf-2017-0201) stipulates: “the law referred to in the contract refers to the laws, administrative regulations and departmental rules of the people’s Republic of China, as well as the local regulations, autonomous regulations, separate regulations and local government regulations of the place where the project is located.” In addition to the general terms and conditions, there is also a gap in the interpretation of “law” in the special terms and conditions, such as “other normative documents applicable to the contract: ___”.
Q2: who should bear the losses caused by the suspension or delay of construction due to the epidemic? Answer: 1 If the epidemic situation constitutes force majeure, in principle, the contractor and the employer shall bear their own losses for the shutdown or delayed commencement within the construction period agreed in the contract, and the contractor must pay the labor costs, which shall be borne by the employer.
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If the construction period is extended due to the employer and the epidemic occurs within the extended period, the employer shall not only bear the responsibility for the delay of construction period, but also bear the losses caused to the contractor; If the construction period is extended due to the contractor and the epidemic occurs within the extended period, the Contractor shall bear corresponding responsibilities and losses.
If the construction cannot be carried out normally due to the shortage of construction materials, shortage of construction personnel or suspension of construction required by the government caused by epidemic prevention and control, the contractor can postpone the construction period.
In order to help construction enterprises understand the latest epidemic situation policies and respond in an orderly manner, the author combed and answered 10 common practical questions about the epidemic situation of construction enterprises.
The loss of shutdown beyond the construction period agreed in the contract shall be borne by the fault party causing the delay of construction period.
The start time of the extension of the construction period shall be subject to the suspension date specified in the suspension order or suspension notice.
If the employer fails to issue the resumption order, the date on which the epidemic prevention and control has no material impact on the resumption of the project shall be taken as the deadline for the extension of the construction period.
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Deadline for postponement of construction period: if the government department agrees to resume the project, the employer shall issue a resumption instruction to the contractor, and the resumption instruction shall leave an appropriate resumption preparation period for the contractor.
If the construction contract is signed after the outbreak of the epidemic in January 2020, the normal epidemic prevention and control that can be foreseen by the parties during the performance of the contract shall not be regarded as force majeure, while the major and special epidemic prevention and control policies that cannot be foreseen by the parties shall be regarded as force majeure.
Q3: how to calculate the extension of construction period caused by epidemic prevention and control? Answer: 1 As for the start time of the extension of the construction period: if the Employer receives the shutdown notice from the government department, it shall issue the shutdown instruction to the contractor; If the Contractor receives the shutdown notice from the government department or executes the shutdown required by the government documents, the Contractor shall send the shutdown notice to the employer (or supervisor, subject to the contract); If the work has to be stopped due to the shortage of personnel, materials and equipment and construction machines and tools caused by epidemic prevention and control, the Contractor shall issue a notice of suspension to the employer and provide evidence to explain the substantive impact of force majeure on the project construction.
The details shall be subject to the construction contract.
Therefore, the documents issued by local government departments can also be regarded as the “law” agreed in the contract, and the contractor can claim the epidemic prevention expenses accordingly..
For example, the current round of epidemic prevention and control policies in Shanghai have a large impact and a wide range, which can be regarded as force majeure.
Many construction contracts will list the documents and notices issued by relevant local government departments as “other normative documents”.
If the epidemic situation does not constitute force majeure, the loss shall be borne in accordance with the relevant provisions of the contract.
Recently, the epidemic situation in many parts of the country is grim.
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Local governments and relevant departments have successively issued notices to strengthen the epidemic prevention and control measures of construction projects.
For epidemic prevention and control beyond the construction period agreed in the contract, the risk shall not be apportioned according to force majeure.
Q4: who will bear the cost of epidemic prevention and control measures? Answer: 1 If there is an agreement in the construction contract, it shall be handled in accordance with the contract.
If there is no agreement in the construction contract, the contractor and the employer shall bear their own expenses for epidemic prevention and control measures.
If the contractor has any objection to the resumption of work, the deadline for the extension of the construction period shall be determined according to whether the Contractor’s objection is established; If the contractor has no objection, the deadline for the extension of the construction period shall be determined according to the resumption date required by the employer.
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If there is a dispute over the start time of the suspension of construction, the Contractor shall meet the following conditions before the extension of the construction period: (1) the shortage of labor and materials, or the inability of mechanical equipment to be put into use due to force majeure, or the shutdown required by the government; (2) The contractor has done its reasonable duty of care and still cannot avoid shutdown; (3) The actual shutdown on the critical path of the project duration.
Q1: is the epidemic inevitable force majeure and can the construction period be postponed? A: whether the epidemic is force majeure or not depends on the situation.
If the party concerned fails to issue the suspension order or suspension notice, the suspension period shall be determined by the application of the contractor and the approval of the employer.
