by Mark A. Cobb
Last week, our construction attorneys wrote a contract provision that took into account issues related to COVID-19 (commonly called the Coronavirus disease). Since that time, we have heard from many of our clients about their concerns regarding the virus and the many impacts which might result from it.
Needless to say, the first priority is keeping everyone safe. Thus, we strongly encourage our readers to follow the various protocols promulgated by the Centers for Disease Control’s Interim Guide for Businesses and Employers, OSHA’s Guidance on Preparing Workplaces for COVID-19 , and similar organizations. Please check our Facebook page for specific resources for our clients and their businesses.
It is also imperative that we understand the impact that this pandemic will have upon the construction industry. Most of the contractors with whom we have spoken have taken steps to maintain their work and continue with their projects; however, outside influences may be the cause of work slow-downs or stoppages. Unfortunately, this list of potential impacts is very long from permitting procedures and inspection delays attributable to government and municipalities, transportation schedules for testing and delivering, and to workforce illness (or caring for the ill) and unavailability of sufficient material supplies.
Most commercial construction projects are based upon a series of written contracts. These contracts may include multiple levels which mean that subcontractors are bound by their contracts with the prime contractor AND they may also be bound by many of the provisions in the contract between the prime contractor and the owner/developer (often, particularly, notice provisions). Every contractor should mindfully read, understand, and comply with the provisions contained within their contracts. If you do one thing today to help your business survive the interruptions caused by the coronavirus, review the notice requirements in each of your construction contracts and be prepared to send any notice which might impact your contract. This can include notices for such items as:
- anticipated delays
- delays caused by the owner or prime contractor
- demobilization (and remobilization) costs
- supplier issues
- labor shortages
- transportation issues
- testing and inspection delays
- payment issues
- change orders
- key employee illness
Please do not assume that the coronavirus’s declaration as a pandemic excuses your notice provisions. We would like to be clear that the status of pandemic MAY allow some forgiveness or extend some deadlines; however, your business should not rely upon this. Instead, give any and all contractual notices necessary to protect your business and its interest. When you are giving these notices under your construction contracts, you should consider the following tips:
- comply with the notice deadline required by your contract
- comply with the delivery method of the notice required by your contract
- comply with the information required by the contract
- give formal notice by giving notice on your letterhead
- you may send your notice via additional methods than those required by your contract (e.g., send the notice by certified mail, first-class mail, and email)
- be clear that you are giving notice of an event under the construction contract
These are confusing times, and everyone involved is having to adapt to an ever-changing business and legal landscape. Yesterday, for example, the Georgia Supreme Court issued an Order Declaring a Statewide Judicial Emergency. Several of Georgia’s Judicial Circuits have already declared their circuits to be in an emergency situation. The Supreme Court’s Order impacts every court in Georgia, and it has attempted to prevent the spread of the coronavirus disease by suspending jury trials and extending various deadlines. We encourage our readers to review the entire Order, but a pertinent part states:
Pursuant to OCGA § 38-3-62, during the period of this Order, the undersigned hereby suspends, tolls, extends, and otherwise grants relief from any deadlines or other time schedules or filing requirements imposed by otherwise applicable statutes, rules, regulations, or court orders, whether in civil or criminal cases or administrative matters, including, but not limited to any: (1) statute of limitation; (2) time within which to issue a warrant; (3) time within which to try a case for which a demand for speedy trial has been filed; (4) time within which to hold a commitment hearing; (5) deadline or other schedule regarding the detention of a juvenile; (6) time within which to return a bill of indictment or an accusation or to bring a matter before a grand jury; (7) time within which to file a writ of habeas corpus; (8) time within which discovery or any aspect thereof is to be completed; (9) time within which to serve a party; (10) time within which to appeal or to seek the right to appeal any order, ruling, or other determination; and (11) such other legal proceedings as determined to be necessary by the authorized judicial official.
The impact of this Order is far-reaching; however, it remains to be seen how this Order impacts contracts (if at all). Thus, we are currently recommending that every contractor abide by the terms of its construction contracts to the best of their ability, and then provide proper notice for any inability, delay, or other anticipated act which deviates from the contract terms.
If you have any questions regarding how coronavirus might impact your current construction projects or contracting, please feel free to contact us.