While almost every factual situation and contract is different, generally speaking, a public health emergency like the coronavirus outbreak would trigger a “force majeure” clause, which typically entitles the contractor or subcontractor to a non-compensable time extension. The owner cannot recover liquidated damages and the contractor/subcontractor cannot recover delay damages in the event of late completion of the project.
However, if work on a project is suspended, due to a shutdown by a government order or if a hospital prohibits construction workers due to health concerns, a contractor or subcontractor may be able to recover both time and money. For example, AIA A201 §14.3.2 provides that there can be an equitable adjustment “of the cost and time caused by suspension.” And even if the owner has not formally issued an order of suspension, but the work is effectively shut down, the contractor or subcontractor can give notice that a “constructive suspension” has taken place, and seek both time and money.
In addition, Ohio projects are subject to the Fairness in Construction Contracting Act – O.R.C. §4113.62(c) – which makes “no damage for delay” provisions unenforceable if “the cause of the delay is a proximate result of the owner’s or contractor’s act or failure to act.” While the impacts of the coronavirus pandemic may not be caused by anyone, if there is a solid argument that the cause had anything to do with an owner or contractor’s actions (such as when a hospital restricts or bars construction work to protect its patients or health care workers), there may be an argument that the contractor/subcontractor can recover additional compensation, as well as time.
