Contractual Treatment of COVID-19 Induced Events under Standard International Construction Contract Conditions

Abstract

Construction contract conditions typically address force majeure (FM) events and their impacts on contractors’ possible time and cost entitlements. This paper addresses the challenges that may be faced when relying on and interpreting FM provisions in the case of pandemic-related circumstances. It further investigates how the lack of incorporation of such provisions is construed under certain jurisdictions. The steps followed in this research involved: (1) the examination of the 1999 and 2017 FM provisions adopted by the International Federation of Consulting Engineers (known as FIDIC) with respect to whether they specifically cover pandemic-related events; and (2) the exploration of other relevant contractual paths based on which pandemic-related claims can be made. The outcome of this work is in the form of a multi-step framework that can guide practitioners in assessing the viability of pursuing such claims. Factors accounted for in the developed framework include the criteria satisfying FM circumstances, reference to or the existence of FM provisions under the contract, reliance on other related provisions addressing performance hindrances, and event foreseeability considerations.