Best Practices for Drafting Extension of Time (EOT) Clauses and Mitigating Disputes under AS4902 Contracts
INTRODUCTION
In construction projects governed by AS4902 — Design and Construct Contracts, time is as valuable as cost and quality. Delays, whether caused by weather, authority action, design changes, or latent conditions, can have cascading effects across procurement, delivery, and cashflow. Disruption to the project timeline can erode margins, strain commercial relationships, and give rise to complex claims for delay damages and extensions of time (EOTs).
While delay claims are among the most frequent sources of dispute, AS4902 provides a contractual mechanism under clause 34 to equitably adjust completion dates where delays are beyond the Contractor’s control. Well-drafted and carefully administered EOT provisions are central to maintaining project certainty, mitigating disputes, and preserving commercial relationships.
IMPACT OF DELAY AND DISRUPTION CLAIMS
The consequences of delay and disruption under AS4902 are rarely confined to time alone. Key impacts include:
- Increased Project Costs – Extended site preliminaries, prolonged supervision, and escalation in labour and materials.
- Cashflow and Programme Disruption – A delay in practical completion can defer milestone payments and revenue realisation.
- Commercial Strain – Contentious claims can undermine trust between Principal and Contractor, affecting future collaboration.
- Exposure to Liquidated Damages – Under clause 34.7, unrelieved delay exposes the Contractor to liquidated damages for late completion.
- Litigation Risk – Poor contract administration and non-compliant notices often escalate into adjudication or litigation under the Security of Payment
GROUNDS FOR AN EXTENSION OF TIME UNDER AS4902
Clause 34.3 of AS4902 entitles the Contractor to claim an EOT where a delay results from a qualifying cause of delay. The AS4902 Contract provides for specified events and circumstances which constitute as a qualifying cause of delay.
The Contractor must also demonstrate that the delay affected the critical path to Practical Completion and that reasonable mitigation steps were taken.
Note: AS4902 allows the Superintendent to grant EOTs even if the Contractor has not claimed one, but this discretion is rarely exercised in practice.
EOT NOTICE AND SUBMISSION REQUIREMENTS
Strict compliance with the contract’s notice provisions is critical. Under clause 34.3, the Contractor must:
- Give written notice of the delay within 28 days of becoming aware of it;
- Identify the cause, commencement, and estimated duration of the delay;
- Demonstrate that the cause was beyond the Contractor’s reasonable control; and
- Provide evidence of mitigation efforts and a revised completion date.
Failure to comply strictly with these requirements can forfeit entitlement to an EOT, even where the delay was legitimate. Well-maintained site diaries, correspondence records, and programme updates are indispensable in substantiating delay claims.
DRAFTING AND ADMINISTERING EFFECTIVE EOT CLAUSES
When negotiating or amending AS4902, parties should focus on ensuring the EOT regime promotes fairness and certainty. Key drafting and administrative considerations include:
- Clear Definition of Qualifying Causes: Avoid ambiguity by defining causes with precision and addressing concurrent delays.
- Notice and Evidence Procedures: Stipulate practical timeframes for notices and specify what supporting evidence must accompany each claim.
- Superintendent’s Role and Discretion: Clarify the extent of the Superintendent’s discretion to award EOTs unclaimed by the Contractor.
- Concurrent Delay Protocol: Determine whether concurrent delays entitle the Contractor to partial or no extension (a frequent dispute point).
- Mitigation Obligations: Reinforce the Contractor’s duty to take reasonable steps to prevent or minimise delays.
- Consequences of Non-Compliance: Explicitly state that non-compliance with clause 34 notice requirements may bar entitlement.
Proper drafting aligns the risk allocation with the project’s realities, reducing ambiguity and safeguarding against opportunistic claims.
CONCLUSION
Under AS4902, the EOT mechanism is not merely procedural, it is an essential safeguard for both parties. Effective administration ensures that genuine delays are recognised without unfairly penalising the Contractor, while protecting the Principal’s right to timely completion.
With disciplined contract management, contemporaneous documentation, and clear communication, the impact of delay and disruption can be mitigated. Well-drafted EOT clauses which are properly administered transform potential disputes into structured, fair, and commercially sound adjustments.