The much awaited Court of Appeal judgment has now been handed down in North Midland Building Limited v Cyden Homes Limited and provides clarification over parties' entitlements for periods of concurrent delay and interaction of concurrency with the prevention principle.
The prevention principle is an established common law doctrine which prevents a party from enforcing a term of a contract against another party, if they themselves have prevented the party from performing the obligation.
The definition of concurrency had previously been unclear, but in this case the definition from Adyard Abu Dhabi v SD Marine Services was adopted and confirmed as a:
"period of project overrun which is caused by two or more effective causes of delay which are of approximately equal causative potency"
It has long been established that if a contract is silent on the risk of concurrent delay, it is arguable that the contractor should be entitled to an extension of time (but not money) for periods of concurrent delay (even if the contractor caused some of that delay). However, in this contract, the parties agreed a provision allocating the risk of ALL concurrent delay to the contractor.
On Cyden's case, this meant that that 1) North Midland was not entitled to claim an extension of time that it might ordinarily be entitled to for periods of concurrency and 2) Cyden was entitled to liquidated damages for any period of concurrent delay (despite any prevention).
The Court of appeal has upheld Cyden's interpretation and made it clear that parties are free to negotiate and allocate risk as they see fit, provided the drafting is clear (which in this case it was).