One of the causes of construction disputes is the absence of optimal arrangements in construction contracts between service users and service providers. Factors that may lead to such dispute include the time for completion of the work.
Determining the time for completion of work is an essential part of the construction work itself. Problems arise when the service provider faces conditions that require an extension of time to complete the work, which is caused by conditions beyond the control of the service provider or due to the fault of the service user themselves. However, this is not specifically regulated in the contract.
As a result, the potential for disputes becomes higher. Service users may consider the delay as a breach of contract, while service providers instead think that the delay is entitled to an extension of time therefore there is no breach of contract.
CLAUSE ON EXTENSION OF TIME FOR COMPLETION OF WORK
The clause on extension of time for completion of work is a clause that accommodates service providers to request an extension of time for construction work. Naturally, the right to apply for an extension of time cannot be exercised by service providers at any time, but only at certain times and under certain conditions.
One of the guidelines regarding arrangements in construction contracts is FIDIC Conditions of Contract, which is a contract that has been internationally developed by the International Federation on Consulting Engineers for more than 50 years. The laws and regulations in Indonesia do not recognize the existence of FIDIC Conditions of
Contract as an official guide in making construction contracts, but based on the principle of reedom of contract, the parties in the contract can follow the arrangements stated in FIDIC Conditions of Contract.
In FIDIC Conditions of Contract, it is stated that service providers will have the right to apply for an extension of the construction time in the event that:
a. service users propose variations of work;
b.there are delays, obstacles, or preventions caused by or related to the service users, the service users’ workers, or other service providers in the workplace; or
c. force majeure.
Furthermore, it is also necessary to regulate the procedure on how service providers submit the request for extension of time where conditions arise giving e service providers the right to request an extension. The arrangement, based on the FIDIC Conditions of Contract, is regulated in a separated clause, namely the clause on claims.
CLAUSE ON CLAIMS
The clause on claims does not only regulate requests for extension of time, but also payments. However, in this article we will only focus on the aspect of time extension. In this clause, it is must be stated clearly and in detail regarding (i) how the claiming party can file a claim, (ii) what information must be included in the claim, (iii) what is the responsibility of the other party, and (iv) the approval of the claim.
A problem that may potentially arise in this clause is if it does not stipulate the obligation of the party receiving the claim to respond to the claim. This results in unclear approval from the receiving party for the submitted claim.
In FIDIC Conditions of Contract, it is stated that the procedure regarding claims is carried out in two stages. First, the claiming party must submit the request for extension, with complete information and within a reasonable period of time, or as agreed by the parties, from the moment the claiming party becomes aware of the conditions that cause the need for an extension of time. Second, the other party must respond to the claim in writing and state whether the claim is approved or not along with the reasons.
With the clause on extension of the time for completion of work regulated clearly and in detail in the construction contract, it is hoped that it provides egal certainty for the parties, thus reducing the potential for disputes related to the time for the completion of work. (SCH/IMD)