A Construction Nightmare: Snow, Ice and Extreme Weather

Last winter was a historic winter for the Northeast and many other parts of the country, with unprecedented snowfall and cold temperatures. The country’s gross domestic product (GDP) contracted at an annual rate of 2.9 percent from January through March 2014, which represented the fastest rate of decline since the recession started in 2008. The tough winter impacted the construction industry even harder, causing a 9 percent decline in non-residential construction in the first three months of the year.

The extreme weather last year demonstrated that even one snowstorm or cold spell can disrupt a construction project, causing serious cost implications for all involved. Many in the construction industry were harmed not only by the weather but also by not understanding the legal rights and remedies available to them. Whether you are a supplier, contractor, or developer, here is a synopsis of what you need to know to protect yourself from another cold, snowy winter:

You may be able to get compensation and time.

Under most construction contracts, the general rule is that unusual weather only entitles a contractor to additional time to complete work and not additional compensation. However, there are significant exceptions to the general rule:

• If the project is already delayed for a non-weather related reason and that delay pushed your construction schedule into an adverse weather event, you may be able to receive compensation in addition to time.
• If the job site conditions result in extra work such as snow removal or multiple mobilizations, you should request a change order.
• A time extension that is insufficient and results in acceleration, compression or labor inefficiencies can be a compensable claim.

You may be entitled to a time extension even when you planned to work through the winter.

Many construction contracts involving outdoor work that is planned to occur during the winter assume lost weather days. The inclusion of bad weather days does not necessarily limit relief.

• Review your contract now so you know if and how many days are assumed lost due to poor weather.
• When liquidated damages exist, it is imperative to know how many “lost” days are assumed in your contract. An extension of time could be dependent on proof that the winter weather caused more lost days than anticipated.

There are no snow days if you don’t ask.

Prompt written notice is critical to protecting your rights on every construction project for any reason. At a minimum, written notice should provide:

• A description of the extreme weather;
• A description of how the weather is affecting the performance of the work;
• The number of days impacted by the weather (if known);
• A reservation of all contractual rights due to the weather; and
• If you are a contractor, a statement that the work will not be accelerated unless it is authorized in writing and paid.

In rare instances, unusual weather may excuse performance.

If you are a supplier and cannot procure material due to shortages, unusual weather may constitute an “act of God” that will excuse performance under a contract.

Understand your insurance policies and provide notice to your carrier. Notice should be given of:

• Damage to your property;
• Claims for business interruption; and
• Any suspected liability for damage to others.

Document unusual conditions and damage.

• These days, everyone carries a phone with a camera. Take pictures of conditions and damaged work before proceeding.
• It is critical to contemporaneously document impacts such as material or labor shortages, extra or repair work, or re-sequencing.

You have a duty to mitigate your damages.

If a party you contracted with is unable to perform due to the unusual weather, you are under an obligation to reasonably mitigate your damages. For example, you may be obligated to:

• Find another supplier or contractor to reduce liquidated or delay damages;
• Request an extension from the party with whom you contracted; and/or
• Accept alternative materials.

No one contract or storm event is the same. It is important to understand and abide by each contract’s terms in order to best protect yourself. If you have any questions about the impacts of weather on your project, you should speak with our experienced construction attorneys so that we can help you minimize or recover your losses incurred due to weather-related events.