Analysis of Force Majeure Events in Construction Claims

As contracts are written down for construction projects, along with the causes of delay that could arise, there is another important aspect that to consider. The "force majeure" events. Although the events themselves may be unpredictable, their occurrence is predictable and under consideration in the contract stage.

UAE’s construction projects are at an all-time high as area develops. In the case of a "force majeure" event occurring in UAE's construction projects, the dealing is different from those in case of other delays. Where some delays assessed may result in compensation of time and cost, others may involve only the compensation of one factor.

The most meticulous planning for determination of claims in construction projects in the region requires expertise in the area. Something that only the best construction claims consultants Dubai can provide. The following article aims to define FM events in detail and analyze their presence in a construction claim.

Types Of Construction Delays

The construction delay analysis allows the analysis of three major types of delays along with other basic delays:

• Non-excusable (NE); where the contractor is responsible and is not entitled to any delay damage recovery or to the extension of time.  The contractor may also be held accountable for the owner’s delay damages.
• Excusable compensable (EC); delays caused by owners and allow contractors time extension and damages for the delay.
• Excusable non-compensable (EN); delays not caused by either owner or contractor. They allow contractors an extension of time but not the delay related costs. The project extension duration is the same as the delay duration without any extra charges.  The events causing the delays result from "force majeure" events.

What Are "Force Majeure" Events?

Events that can be categorized into force majeure events are specified in the initial contract and may include events such as floods, earthquakes, war, storms, freight embargoes, acts of enemy or government, change in the law, etc. The type of events included may differ from one contract to another.

The occurrence of these events, if delays the project, only the delay duration is compensated for. The delay damages compensation isn't possible for either contracting parties. In some cases, however, such an event may be converted into a compensable delay. 

However, experts in the matters of delay emphasize that an event that could have been avoided by planning of the other parties should be compensated for by the innocent party. In case a delay occurred due to the carelessness of the other party, compensation should be made to the innocent party.

Despite the many arguments calling for compensation of costs in case of occurrence of “force majeure" events, the problem lies with the assessment of the delays. Comprehensive assessment of delay claims and the effect of delay issues are still lacking practice.

Although the standards used today help with the successful resolution of claims, however,   there is little consideration given to the responsibility of dragging work through the time of unpredictable events.  These events have held major importance however a lack of awareness in delay analysis and very few cases in construction-related litigation makes compensation terms still confusing.

Construction Delays And Force Majeure

In the construction contract, the force majeure terms exclude any liability in the case of an unforeseen event preventing completion of contract terms. "Force Majeure" refers to an event that is “exceptional,” not under control by the parties and is an event that couldn’t be planned for before signing contracts.

What's more, is that the Force Majeure events exclude events that could be avoided or overcome, and includes those that can’t be “substantially “   piled on to the other parties. Any time an event falls into the two mentioned criteria, time extension without delay-damages may be granted.

Take Away!

Considering the unpredictable nature of Force Majeure events and the arguments associated regarding compensation of damages it’s important to hire relevant expert construction claims consultants Dubai to help out with the claims process! It’s not something your company can do alone!

With years of experience in the industry, the best consultants can make the whole process from start to finish easier, for you and your pocket!