An extension of time is usually regarded as a benefit to contractors. After all, they are the ones who have a duty to complete the project within the contracted time.
However, the obligation of contractors to complete the project is subject to the employer not preventing or hindering their works. For example, if the employer fails to deliver the possession of the site on time, then it would be considered that the contractor is prevented from carrying out his works.
When a contractor is prevented from carrying out his works, the employer should issue an extension of time for the contractor. Otherwise, time becomes at large and the contractor is then required to complete only within a reasonable time.
What constitutes a reasonable time depends on the circumstances of the case.
When time becomes at large, the employer also loses his right to insist on liquidated ascertained damages (LAD). Instead, the contractor would only be liable for general damages if he fails to complete within a reasonable time.
Therefore, extension of time does not only benefit contractors, it benefits employers also. By issuing an extension of time when reasonable to do so, employers prevent time from becoming at large. Furthermore, employers also preserve their contractual rights to LAD.
Kheng Hoe Advocates
Building contract and construction contract dispute lawyers
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