Introduction:
In the intricacies of construction contracts, the concept of “time at large” stands as a pivotal legal consideration in regard to completion of the works. This term, often subject to nuanced interpretation, has far-reaching implications for all parties involved in the construction process. This article delves into the fundamentals of “time at large,” exploring its definition, application, and consequential ramifications.
Defining “Time at Large”:
Construction contracts generally make provision for a date by which the works are to be completed in order for the other party to take over the works and start using them, often referred to as the practical completion date, interim completion date, or completion date (“completion date”) depending on the terminology used in the contract. “Time at large” is a legal principle featuring in English Law that finds application when there is no stated completion date, or where the stated completion date becomes unenforceable, and/or where the stated completion date no longer applies and the contract does not make provision for extension of time. In South Africa, the concepts of “Time at Large” and the “Prevention Principle” are sometimes used as equivalents. In summary, the Prevention Principles denotes to an act by the Employer or his Agents preventing i.e. the Contractor from performing or meeting the completion date and thus preventing the Employer from levying penalties/delay damages. The approach of the English Courts was summarised in the South African Court Case of Group Five Building Ltd v Minister of Community Development 1993 (3) SA 629 (A) at 650 C as follows: –
1. “A contractor is bound to complete the work by the date stipulated in the contract for its completion. If he fails to do so he will be liable, if so agreed, for liquidated damages to the employer”.
2. “The employer will not, however, be entitled to liquidated damages if by his act or omission, he prevented the contractor from completing the contract by the agreed date. As it was put by Vaughan Williams LJ in Wells’ case supra at 354,
“[I]n the contract one finds the time limited within which the builder is to do this work. That means, not only that he is to do it within that time, but it means also that he is to have that time within which to do it.
Any conduct on the part of the employer or his agent, whether authorised (e.g. the issue of variation or suspension orders) or wrongful (e.g. the failure to deliver the building site or plans or instructions by an agreed date) exonerates the contractor from completing the contract by the contractual completion date. Time then becomes, as it is sometimes stated, at large. The work must then be completed within a reasonable time.”
3. “The qualification of proposition 1 by proposition 2 is itself subject to the further qualification that the latter must yield to the express terms of the contract. One such express term would be the authority granted to a contractor to apply for an extension of time within which to complete the work, e.g. where variation orders are issued or extra work is ordered which delays its completion”.
4. “But where the extension clause lists specific grounds on which the contractor may ask for an extension of time and adds the words “or other causes beyond the contractor’s control” the latter phrase must be interpreted narrowly and eiusdem generis with the preceding categories. Wrongful conduct of the employer which caused delay would in particular be excluded, at any rate when, in terms of other provisions in the contract, the decision about extra time rests with the employer himself and is final (for otherwise, if not excluded, the employer becomes arbiter of, and gains an advantage from, his own – wrong). Proposition 3 accordingly does not apply and proposition 2 does: consequently, the employer would not be entitled to enforce a claim for liquidated damages”.
Legal Implications:
The absence of a specific completion date, either due to contractual omissions or events rendering the completion date unenforceable, triggers the application of the principle of “time at large.” This scenario introduces a series of consequential implications for Employers, Contractors, and Subcontractors as the case may be. In essence, it releases parties from the strict constraints of a fixed timeline, allowing for a more flexible approach to project completion, and more specifically the Contractor/Subcontractor may execute its works within a reasonable period of time. The concept of reasonableness is not something that can be easily and objectively determined and would depend on the circumstances of each case, is open to interpretation and disputes. One of the legal ramifications includes inter alia that liquidated damages for delay / penalties for late completion cannot be imposed in the absence of a completion date or where the completion date becomes unenforceable.
Conclusion:
In the realm of construction contracts, the concept of “Time at Large” introduces a layer of legal complexities and certain ramifications which necessitates a sophisticated understanding of contractual nuances and legal precedents. It is imperative for construction contracts to be crafted appropriately to avoid the application and pitfalls of this concept.
The contents of this article are for information purposes only and should not and does not constitute any legal advice. Every case is different and should be determined based on its own merits with proper legal advice.
By Zanda Roloff – February 2024