03-19-14

Delay in Issuance of Time Extension May Constitute Active Interference or Bad Faith

By Christopher Solop 


Contractors frequently encounter circumstances where they are entitled to an extension of the contract time and request the extension, but, in some instances, the owner and/or architect refuses to timely act on the request by either granting or denying the request. When a contractor encounters such a circumstance, it must decide whether to accelerate its performance to avoid missing the contract completion date and being assessed damages by the owner or maintain its schedule based upon the assumption the contractor will receive the extension and risk a potential termination for default by the owner for not making adequate progress toward the completion date. This is the very reason why the Mississippi Supreme Court suggested that the "refusal to grant extensions on a timely basis can reasonably be interpreted as active interference or bad faith" and could justify the award of damages to a contractor.

Contractors should therefore not just request an extension of time with supporting documentation but also demand a timely response. If no response is forthcoming, the contractor should then advise the owner and/or architect of the consequences of a further delay in a decision.