The float



If a contractor includes a period of time in its program to enable it to accommodate various risks (such as industrial activity or wet weather), the generally accepted view is that this time is a 'buffer' and risk management tool for the benefit of the contractor. This buffer is often referred to as the 'float'.

The benefit of the float and the manner in which the float can be applied will depend on the contractual position. Hence the drafting on this issue must be carefully considered.

In circumstances where a contract provides that an
EOT will be granted only if the delay affects the achievement of completion by the contract completion date, then the effect is that the float has to be used up before an EOT will be due.

Alternatively, if the wording of the clause is that an EOT may arise whenever a qualifying delay causes a delay in completing the works, then the float would not be available for the benefit of the principal.

The courts are reluctant to imply an obligation on either party to do things to preserve the program float and/or achieve the target date. Such an obligation would only arise when it was expressed as a term of the parties' contractual bargain.

CASE STUDY



Glenlion Construction Limited v The Guinness Trust

(1987) 39 BLR 89



Facts


  • This case concerned a contract for residential development at Bromley, Kent. The contractor was delayed in achieving completion by the target date in its program which was before the agreed date for practical completion.
  • The contractor argued that where a program showed a completion date before the date for completion the contractor was entitled to carry out the works in accordance with that program and complete on the earlier date.

Result


  • The court held that a contractor was entitled to complete on an earlier date, but there was no implied term obliging the principal to perform the agreement in a way which would enable the contractor to complete the works by the earlier date in the program.

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