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Coronavirus and Construction Contracts in South Africa

Although lockdown has eased from level 5 to level 3, the spread of COVID-19.

South Africa is accelerating, and the normal progress of construction contracts is being adversely affected.

Contractors and subcontractors are finding it increasingly difficult to meet their obligations not only due to labour disruptions.

Also, due to the delays in the supply of materials and products, and

In some cases increased costs.

This is having a significant impact on projects and is resulting in substantial delay claims which need to be processed in accordance with the signed Contract.

In South Africa, the building and construction industries use one of the four Standard-Form Contracts (SfC)

Accepted by the Construction Industry Development Board (CIDB) for use by State-owned companies and by all private sector employers1:

FIDIC

The French acronym for the International Federation of Consulting Engineers, published in Switzerland in English and in French.

GCC

General Conditions of Contract for Construction Works published in South
Africa.

JBCC

The Joint Building Contracts Committee published in South.

NEC

New Engineering Contract published in the United Kingdom referred to as the Engineering and Construction Contract ECC).

Irrespective of the SfC each will have clauses covering an ‘exceptional event’, ‘extraordinary occurrence’, or ‘force majeure’ which was not reasonably foreseeable.

The current global pandemic would fall into one of these categories.

These clauses will provide details on the allowable extension of time, adjustment of the contract value, or even termination of the agreement in some cases.

Contractors have to consider whether the identified delay claim will entitle them to simply claim further time for completion, without penalty, or

Whether they will be entitled to claim their additional costs arising from the delay.

This will be dependent on each contract form (SfC) and careful consideration of any special conditions.2

Employers and contractors should closely evaluate their construction contracts to make the best possible decisions regarding their projects,

And then. implement strategies to mitigate the cost. However, disruptions need to be scheduled as much as possible

______________________

1South African Building Contracts and the COVID 19 Global Pandemic;

2 Covid-19 Lockdown – The impact on Construction Contract Claims;

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