What Iowa Construction and Design Companies Need to Know – JD Supra

In light of the COVID-19 pandemic, construction and design companies need to review their current contracts, as well as consider modifications to their future contracts, in order to best protect them in these uncertain times. COVID-19 has, and will likely continue to result in disruptions to construction and design companies’ labor forces, material shortages, delivery delays, closure of local governmental offices and/or delays by local building/inspection officials, delays caused by governmental-imposed restrictions and closures on private businesses, problems with availability or stability of subcontractors and subconsultants, and owners attempting to suspend and/or terminate contracts. A firm understanding of the language within your contracts, as well as general contract law, can often be the best offense and defense in regard to COVID-19 delays and other effects.

Checklist of action items for construction and design companies regarding contract issues and COVID-19

Review and Understand Your Contracts for Ongoing Projects

You should review and understand the applicable excusable delay and/or force majeure provisions in your contacts. In particular, you should fully understand:

  1. The scope of these provisions

  2. Your remedies, including whether it is merely an extension of time, or also monetary damages

  3. Any notice requirements

  4. Any documentation requirements

Alternatively, if your contract does not contain any excusable delay or force majeure provision, a party may still be excused from performance based upon legal defenses relating to “impossibility/impracticability” or “frustration of purpose.” More information on the concepts of force majeure and frustration of purpose can be found in this prior COVID-19 Force Majeure