In the third of our series of blogs on MF/1 (rev 6) we discuss the clauses that may be relevant to the Coronavirus (COVID-19).
First, if the Contractor has been delayed in completing the works, it can ask for an extension of time, under clause 33, if circumstances beyond its reasonable control arise after, broadly speaking, the commencement of the works. What is “beyond the reasonable control” of the Contractor may not be straightforward (see below a word of caution regarding the definition of force majeure). The Contractor must give notice of the claim for an extension, with full supporting details, as soon as reasonably practicable. MF/1 implies that the Contractor is not entitled to be paid for the cost of the delay. However it is worth noting the following:
The contract price can be increased if there is:
- any increase caused by the making of any law, order, regulation or bylaw (after the date of the Tender)
- any rise in the cost of labour, material or transport (after the date of the Tender)
The other relevant clause is clause 46 which helpfully sets out a definition of force majeure which includes “any circumstances beyond the reasonable control of either of the parties”. A word of caution though. It may not be enough to simply show that Coronavirus (COVID-19) is beyond the reasonable control of either party. If the issue is, for instance, that the virus is causing a shortage of labour on site, it will be necessary to show that no other suitable labour could be located and brought to site.
Clause 46 has a provision in place for either party to be excused from performance as a result of force majeure. It also has a termination provision for force majeure. If either party is prevented or delayed from performing its obligations as a result of a force majeure event, then it can notify the other party (there are requirements as to what must be included in the notice) and is then excused from performance (or punctual performance as the case may be) for so long as the circumstances of prevention or delay continue. As to termination, if a party has served the clause 46 notice and remains excused from performance (or punctual performance) for a continuous period of 120 days then they are entitled (provided they remain excused from performance) to give notice of termination.