Law and regulation of concurrent delay in Switzerland

The topic of concurrent delay is not widely dealt with in Swiss legal doctrine and case law.

There is no generally understood and accepted definition of concurrent delay. Basically, legal scholars agree that a concurrent delay is caused at least by a reason in the risk area of the principal and a reason in the risk area of the contractor. Exact definitions vary, especially when it comes to the question whether an actual breach of a contractual obligation respectively intent or negligence on the side of either party is required.

There are statutory rules regarding default of a creditor and a debtor. The Swiss Society of Engineers and Architects has issued general conditions for construction contracts which – amongst others – also deal with deadlines and the possibility to extend them. These general conditions only apply if the parties explicitly agree that they are part of the contract. Generally, the parties are free to agree upon more precise and specific rules on concurrent delay in the contract. 

Some scholars hold the view that in case of a concurrent delay, the contractor is entitled to an extension of time irrespective of whether he could actually have performed himself within the originally agreed time frame. 

According to other scholars, there is no absolute right of the contractor to extend a deadline in case of a concurrent delay. According to this view, each case has to be considered individually taking into account the particular situation and the causality. It can be argued that the principal’s participation duties (e.g. delivery of plans) require that the contractor can actually benefit from such participation (e.g. that he is actually ready to start with the respective execution work). This means, that unless the contractor is capable to perform, the principal cannot be in delay with his obligations. 

As there is currently very little case law, it remains uncertain how a court would decide these issues. 

Neither statutory law nor the general conditions of the Swiss Society of Engineers and Architects for construction contracts provide for an automatic extension of time. According to these provisions, an extension of time can only be granted if the contractor immediately notifies the principal of a delay. An extension of time is only granted for an “adequate” period which is required in order to catch up the delay, as contractors usually already build in some buffer time. The extension of time is therefore not in any case identical with the period of concurrent delay. 

If no lump sum price has been agreed, statutory law provides that the contractor’s extra effort that was caused by the principal’s delay has to be considered when determining the compensation for the work. There is, however, no statutory provision which provides for an extra compensation due to a concurrent delay in case of an agreed lump sum price. According to legal doctrine and case law, the contractor could nevertheless claim for additional payment in case of a delay of the principal; such claim can be based by analogy on the principles of change orders.  

If a court has to decide on adequate new deadlines, it would, amongst others, consider the following: 

• Nature, duration and intensity of the breach of an obligation of the principal
• Degree of fault on the side of the principal
• Effects of the default attributable to the principal on the contractor’s time line
• The specific operational situation of the contractor, e.g. workload situation   

If the contractor claims that he is entitled to an extension of time and/or additional compensation, he has to proof the causality between the delay / extra costs and the cause of the delay attributed to the principal. The court can, upon request of either party or upon its own discretion, appoint one or several experts in order to determine the causes and effects of a delay. 

In accordance with the principle of freedom of contract, the parties can contractually agree which party bears the risk of which kind of delay. Thus, it would also be allowed to contractually impose the risk of a concurrent delay on the contractor. 

An event that is at the Contractor’s risk under the contract (a “Contractor Risk Event”) will result in five weeks delay to completion, delaying the contract completion date from 21 January to 25 February. Independently and a few weeks later, a variation is instructed on behalf of the Employer which, in the absence of the preceding Contractor Risk Event, would result in delay to completion from 1 February to 14 February.

7.1 Is the Contractor entitled to an extension of time in respect of the variation? If so, for how long?

N/A

7.2 Assuming the Contractor is contractually entitled in principle to recover delay-related costs relating to the variation, for what period (if any) could it recover those delay-related costs?

This is a typical situation that arises often in construction projects and leads in practice to a lot of discussions which - in the prevailing amount of cases – will eventually be solved with an amicable compromise. From a legal point of view, there is no universal answer. The solution will depend on the specific circumstances and the contractual wording. If the contractor’s delay is for example due to a delivery delay of a subcontractor, one might argue that the contractor could nevertheless execute the variation during the waiting time for the delivery and thus he is not entitled to an extension of time in respect of the variation beyond 25 February. On the other hand, if the construction schedule does not allow the variation work to be done during the delay period caused by the Contractor Risk Event, and the variation thereby causes delay beyond 25 February, a court might approve an extension of time in connection with the variation order beyond 25 February and even allow the contractor to recover delay-related costs in connection with the variation.