Time at large

Construction contracts will usually include a date by which the works described in the contract should be completed.
This is generally the date by which practical completion must be certified.
The phrase time at large describes the situation where there is no date for completion, or where the date for
completion has become invalid. The contractor is then no longer bound by the obligation to complete the works by a
certain date.
Time can become at large because there is no clear completion date specified in the contract, or can be a situation
that arises as a result of events (typically by agreement of the parties or by failure of the contract machinery), or if
the contract does not allow the construction period to be extended.
It is not uncommon on construction projects that the works are not completed by the date for completion. If this is
because of delays for which the contractor is responsible, then the contract will generally include a provision for
them to pay liquidated damages to the client. These are pre-determined damages based on a calculation of the actual
loss that the client is likely to incur if the contractor fails to meet the completion date. Some contracts require that
a certificate of non-completion is issued as a pre-requisite to deducting liquidated damages.
If the works are delayed because of events for which the client is responsible (an act of prevention) or by agreed
neutral events, the contracts will generally provide for an extension of time to be granted, changing the completion
date (see relevant events). If contracts did not allow the construction period to be extended under such
circumstances, then time would be at large. The client would then not be able to claim liquidated damages from
the contractor as there would be no date against which they could be calculated and the contractor would then only
have to complete the works in a 'reasonable' time. The client would only be entitled to damages if they could
establish that the contract was not completed within a reasonable time.
It is important therefore that clauses describing relevant events cover all necessary eventualities, otherwise if an
event occurs that is not covered, time will be at large.
NB Construction contracts generally include a provision requiring that the contractor proceeds regularly and
diligently irrespective of whether it is apparent that the completion date will be achieved.
NB NEC contracts refer to compensation events rather than relevant events. Both parties must give early warning
of anything that may delay the works, or increase costs. They should then hold an early warning meeting to discuss
how to avoid or mitigate impacts on the project. In the case of a compensation event, if the contractor fails to give
early warning of a possible delay to the works, or increase in costs, they will only be compensated for effects that
would have remained even if they had given early warning.
Find out more
Related articles on Designing Buildings Wiki
Compensation event.
Concurrent delay.
Extension of time.
Liquidated damages.
Relevant event.
Time of the essence.
External references
Multiplex Construction v Honeywell Control Systems.
 Most of us are only too familiar with the argument (so beloved of contractors) that
time is at large. We also know that it is rarely successful. The principle by which
time becomes at large was recently commented on by Ramsey J in Bluewater
Energy Services BV v Mercon Steel Structures BV and others:

The principle is of some antiquity and has a surprising effect on the contractual
obligations as to the time for completion. As I have found that there is an
extension of time mechanism for acts of prevention and I am able to determine
the appropriate adjustments to the Key Dates, this is not the opportunity to
consider the underlying basis for the principle.

This comment follows on from a lecture which Ramsey J gave to the Society of
Construction Law on the same topic in April 2012. It is perhaps a sign that at
least one member of the TCC judiciary thinks the time has come to review this
long-standing principle of law. But is he right?

The principle of time at large

In short, the common law principle of time at large is this: if a delay event
occurs that is the employers fault and the contract does not allow the completion
date to be extended in that event, the original completion date, and any
liquidated damages regime, fall away and time is put at large. This means that
the contractor has a reasonable time to complete the works and the employer is
no longer entitled to claim liquidated damages for delay (although it may still be
able to claim general damages). It is an application of the prevention principle,
that a party may not insist on compliance with a contractual obligation in
circumstances where it has itself prevented such compliance.

Old, but is it outdated?

The principle is arguably less relevant in modern construction disputes. The

standard form contracts all now contain adequate extension of time provisions;
this was not the case in some of the older cases when the principle was first
established (see Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd
[1970] 1 BLR 111).

Despite this, disputes as to whether time is at large continue to occupy the

courts. Contractors regularly argue that the standard form provisions are
unworkable because the contract machinery for awarding extension of time has
broken down (for example, Multiplex Constructions (UK) Ltd v Honeywell Control
Systems Ltd) or has been administered incorrectly or not at all. However, these
arguments rarely succeed. The courts typically strive to give effect to contractual
provisions that extend the date for completion and are reluctant to find that time
is at large.
 Perhaps the reason for this is that, although designed to prevent injustice, the
application of the time at large principle can be draconian. A contractually
legitimate act on the part of the employer (for example, a variation instruction)
can fundamentally change the rights and obligations that the parties have
negotiated and agreed, in the absence of workable provisions for extending time.

Judicial thinking

In his 2012 lecture, Ramsey J commented that in circumstances where an

employers delay event occurs and the contract does not make provision for that
delay perhaps the time and liquidated damages provisions should remain, with
the contractor not being liable for the delay caused by the employer.

As I see it, the only way in which a court can uphold the contractual completion
date (and liquidated damages regime) in this event is by implying an extension of
time provision into the contract. This may involve the court having to explore
which party was, in fact, at fault and the extent of delay attributable to that fault,
which would require active intervention by the courts.

In addition, how would this interventionist approach sit with established rules of
contractual interpretation? In practice the courts are generally reluctant to imply
terms into a contract, especially where the express terms are detailed and
comprehensive, have been commercially negotiated and are unambiguous.

Perhaps the key difficulty with this approach is that an implied term already exists
to cover this very situation. The essence of the prevention principle is the implied
term of non-prevention, which is commonly implied into construction contracts
on the basis that it reflects the parties intention or the objective meaning of the
contract. It seems that some people regard the extent of the relief - that the
original completion date and liquidated damages provisions fall away as a step
too far in the other direction.

However, even if the TCC is given the opportunity to re-evaluate this principle, it
is difficult to see how it could distinguish over a centurys worth of case law. The
genesis of the time at large principle is Holme v Guppy (1838) 3 M&W 387 and
its finding that the plaintiffs were therefore left at large and consequently are not
to forfeit anything for the delay. There is a large body of case law which has
subsequently applied this principle, not least Trollope & Colls Ltd v North West
Metropolitan Regional Hospital Board [1973] 1 WLR 601, where the House of
Lords affirmed previous authority that an act of prevention puts time at large.
Lord Denning in the Court of Appeal said that:

It is well settled that in building contracts and in other contracts too when
there is a stipulation for work to be done in a limited time, if one party by his
conduct it may be quite legitimate conduct, such as ordering extra work
renders it impossible or impracticable for the other party to do his work within the
 stipulated time, then the one whose conduct caused the trouble can no longer
insist upon strict adherence to the time stated. He cannot claim any penalties or
liquidated damages for non-completion in that time.

So, while some members of the judiciary may think the time at large principle is
antiquated and in need of review, it looks as though it is here to stay, unless the
Supreme Court has an opportunity (and the inclination) to overturn its previous
decisions or Parliament legislates to the contrary. In short, despite the heavy
hints from Ramsey J, I expect that any change to the principle will be slow in
coming.

The prevention principle, time at large and extension of

time clauses
Most construction and engineering contracts require the contractor to complete the works by a
specified date failing which the employer will be entitled to recover liquidated damages for delay at
the rate stated in the contract. The contractor will only be relieved of its obligation to complete by the
contractual deadline if an event occurs for which the contractor is entitled to an extension of time, but
difficulties can arise if the employer (or the engineer/architect on its behalf) causes delay to the
completion of the works and the contract does not include a term providing for the award of an
extension of time. Such a delay caused by the employer is often referred to as an 'act of prevention'.
The prevention principle and time at large
The 'prevention principle' is a long established principle under English law whereby a party may not
enforce a contractual obligation against the other party where it has prevented the other party from
performing that obligation. The prevention principle is closely aligned to the principle that no party
may benefit from its own breach of contract.
In construction contracts, an employer's act of prevention could be either a breach of contract (such
as a failure to give access to site or a delay in issuing drawings or approvals), or a valid action (for
example instructing the contractor to perform additional works, or to suspend the works). In either
case, if the contract does not provide for how the delay is to be dealt with, the employer will not be
entitled to require the contractor to complete the works by the original contractual deadline and there
will be no means in the contract for fixing a revised date. In such circumstances the original
contractual deadline falls away and time becomes 'at large'.
If time is at large, the contractor is only required to complete the works within a reasonable period of
time. However, this does not mean that the contractor has as much time as he wants to complete the
works. The question of what will be a reasonable time for completion will be a matter of fact to be
decided at the time the question arises and in light of all the circumstances1. While the extension of
time provisions in the contract, which will by that time be defunct, may well serve as guidance, there
will invariably be a dispute between the employer and the contractor as to what is a reasonable time
for completion.
Where time is at large, there will no longer be a fixed date from which liquidated damages can run
and therefore the employer will lose its right to claim liquidated damages. This does not mean that
the contractor is then relieved of all liability for delay; the employer will still be entitled to claim
general damages if the contractor fails to complete the works within a reasonable time.
A claim for general damages could cause difficulties for both parties. The employer will only be able
to recover its actual, proven, losses arising as a result of the contractor's delays. While it is thought
that an employer's claim for general damages cannot exceed the level of liquidated damages specified
in the contract, as of yet there has been no authority on this issue and therefore remains arguable.
Extension of time clauses
Given the complexity of construction projects, it is easy to see that without an extension of time
clause an employer would almost invariably commit an act of prevention at some point during the
contract.
Most standard forms of contract provide that the contractor will be entitled to an extension of time in
the event of instructed variations or changes, suspensions, force majeure and changes in law.
Depending on the type of project, and the parties' respective bargaining power, the contractor may
also succeed in adding certain other neutral events to the list of events giving rise to an extension of
time.
In addition, a provision such as that at Clause 8.4 (c) of the FIDIC Silver Book should be included in
the list of events giving rise to an extension of time to avoid the risk of time being set at large
because of the employer's acts of prevention:
"any delay, impediment or prevention caused by or attributable to the Employer, the
Employer's Personnel, or the Employer's other contractors on the Site".
Wording such as "or any other event beyond the contractor's control" is unlikely to be adequate as it
has been held that it will not cover delays caused by the employer giving late possession or late
information2 and therefore will not protect against all acts of prevention.
Conclusion
If time becomes at large under a construction contract as a result of an employer's act of prevention,
this is likely to cause problems for the contractor as well as the employer. A well-drafted extension
of time clause will benefit both parties by:

Maintaining a contractual time for completion;

Preserving the employer's right to liquidated damages (and therefore giving the contractor
certainty as to its financial exposure in the event of delays); and
Giving the contractor relief from its strict duty to complete the works on time in the event
that delays are caused by specified neutral events.
In next month's Construction Dispute Avoidance Newsletter we will look at whether a contractor can
rely on the prevention principle to avoid paying liquidated damages where it has lost the right to
claim an extension of time by failing to comply with the contractual notice requirements.
Extension of time Time of the
Essence & Time at Large
Time of the Essence & Time at Large

These two expressions are familiar to many. But in a contractual sense what do they mean and are they
truly the opposites that they first appear to be?

Time of the Essence To understand the importance of this term we first must remind ourselves that
English law groups breaches of contract under two headings1, namely those where the term breached is
said to go to the root of the contract that is its breach deprives the innocent party substantially of the
whole benefit of the contract (sometimes termed conditions) and the remainder (sometimes termed
warranties). Breach of the former allows the wronged party to elect to terminate the contract and claim
damages, breach of the latter to claim damages only. If time is of the essence in the contract then that
time requirement is a condition and a failure to deliver/complete will allow the innocent party to treat the
contract as terminated.

Where a written contract states that time is of the essence then that is clearly so. Time can still be of the
essence where those clear words are not used but can be implied from other words used or sometimes
from the nature of the contract (for example the supply of perishable goods). The fixing of a delivery or
completion date is not of itself sufficient to make time of the essence.

A quick note concerning something dear to us all payment. Stipulations as to time of payment, unless a
different intention appears from the terms of the contract, are not of the essence of the contract2. Failure
to make payment on time does not therefore allow, without more substance, the contract to be treated as
terminated.

But what if time is not of the essence. If a delivery / completion date is specified then damages will still be
recoverable by the innocent party in the event of a failure to deliver / complete, in other words although
time is not of the essence it is not immaterial.

If there is no specified or agreed date then the law implies a reasonable time3.

But the law does allow a party to a contract, where time is not of the essence, to make time of the
essence in certain circumstances. This is an unusual departure from the general rule that a contract can
only be varied by agreement of all parties. Where one party has been guilty of undue delay, the innocent
party can give the guilty party notice requiring performance within a certain period and thus making time
of the essence. However this process may not be straightforward and should only be undertaken with
proper advice. In particular the person giving notice must be without culpability themselves and be acting
reasonably.

Time at Large Whilst time of the essence is a term of the contract, time at large is usually used to
explain a situation where the terms of the contract as to time become invalid. That is to say, the supplier
or contractor is no longer bound by the contract provision that he has to deliver or complete the Works by
a certain date or extended date.
The most common situation where this is alleged to occur is when the one party obstructs the other in
performance of their time performance obligation4. It is to avoid that occurring that the standard forms of
contract include provision for extensions of time for completion. Alternatively, time can become at large
where there is adequate provision for extensions of time to be given but the machinery fails due to the
employer or his administrators default so that its purpose is not achieved and is either no longer capable
of being achieved or is not likely to be achieved5.

Where time becomes at large, in common with time not being of the essence, there is still an obligation
to complete within a reasonable time6. And what is a reasonable time? That very much depends on the
circumstances and is a subject in its own right.

So to avoid time becoming at large contracts incorporate provisions to adjust the completion date upon
the happening of certain events. That tends to be termed the giving of an extension of time, which has its
own rules and problems and is the focus of a separate article.

1 This neat arrangement was changed by the 1962 Court of Appeal Judgment in Hong Kong Fir Shipping
v. Kawasaki Kisen Kaisha so that a term can also be either, depending upon their actual effect. These are
called innominate or intermediate terms. However the principal of the different effect of a breach of a
condition and a warranty is still correct.

2 s. 10 of the Sale of Goods Act 1979.

3 s. 14 of the Supply of Goods and Services Act 1982 and s. 29 of the Sale of Goods Act 1979 as
applicable.

4 It is well settled that in building contracts and in other contracts too when there is a stipulation for
work to be done in a limited time, if one party by his conduct it may be quite legitimate conduct, such as
ordering extra work renders it impossible or impracticable for the other party to do his work within the
stipulated time, then the one whose conduct caused the trouble can no longer insist upon strict
adherence to the time stated. He cannot claim any penalties or liquidated damages for non-completion in
that time. Lord Denning MR in Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board
[1973].

5 Bernhards Rugby Landscapes Ltd v Stockley Park Consortium (No 2) [1998]

6 In the field of construction law, one consequence of the prevention principle is that the employer
cannot hold the contractor to a specified completion date, if the employer has by act or omission
prevented the contractor from completing by that date. Instead, time becomes at large and the obligation
to complete by the specified date is replaced by an implied obligation to complete within a reasonable
time. Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No 2) [2007] EWHC 447 (TCC)

UK: "Time at large" and termination of contracts for

delay
When companies agree with each other to carry out work, they usually stipulate a time for
completion of the work.

Where the contract is subsequently varied, the contract may not contain a mechanism to adjust
the time to take account of the variations. In cases such as this, time is said to become "at
large". As there is no fixed time or date for completion, the obligation becomes one to complete
within a reasonable time. A recent case in the Court of Appeal serves as a reminder that the
"time at large" concept is still alive and well. It also looks at the circumstances when a right to
terminate a contract for delay arises.

The relevant facts

The case was between Shawton Engineering Limited ("S") and DGP International Limited ("D").
It first came before the Technology and Construction Court. The Court of Appeal was then
asked by S to review the earlier TCC decision.

The facts of the case were:

1. S was employed to design and manufacture a number of packages to be used in the

construction of a nuclear waste plant at Sellafield.
2. S subcontracted some of the design work to D
3. Ds packages originally each had fixed completion dates.
4. More work was instructed after the original agreement but the parties did not expressly
revise the completion dates.
5. D did not complete their packages. However, they did supply S with 374 drawings from
which they were able to manufacture a significant proportion of the work that they were
contracted to carry out.
6. S tried to terminate Ds contract for delay.
7. D disputed this on the basis that time was at large and a reasonable time had not
expired at the time of the purported termination.

The relevant law

Because there was no contractual mechanism for awarding extensions of time, time became at
large and D only had to complete within a reasonable time. It was held by the TCC that it was
for S to prove on the balance of probabilities (i.e. that an allegation is more probable than not)
that D had failed to complete their work within a reasonable time. The Court of Appeal agreed.
The TCC said that where time was at large a right to lawfully terminate would only arise if:

- S could show that D was in default because they had failed to meet the contractual
deadlines and whilst D was in default S had given them notice to complete making time
of the essence (i.e. informing D that completion by a certain date was now critical) and D
then failed to meet the deadline/s contained within the notice; or- S could demonstrate
that Ds failure to complete within a reasonable time was a breach of such gravity so as
to deprive them of substantially the whole benefit which the parties intended would be
obtained from the contract.

The Court of Appeal agreed with the TCCs interpretation of the Relevant law, although it
suggested that the second circumstance outlined above in which a right to terminate may arise
was more of a theoretical possibility as it is very unlikely to arise where the party alleged to be in
delay is making some effort to complete.

The decision

S had failed, the court said, to establish that it was entitled to serve notice making time of the
essence or indeed that it had made time of the essence. Accordingly, Ds obligation remained to
complete the works within a reasonable time.
The TCCs decision had been that S had failed to put forward any evidence as to what a
reasonable time to complete would have been. Ss submission that a reasonable time should be
ascertained by reference to the original contract periods as extended only by the agreed periods
for variations was rejected by the TCC.

The Court of Appeal said that what was a reasonable time had to be judged as at the time when
the question arises in the light of all relevant circumstances. It agreed with the TCCs decision
and said in the circumstances "the original completion dates, and, indeed the original
completion periods had ceased to be of any relevance." The evidence suggested that D had
made an effort to complete the works on time.

Accordingly, D was not in repudiatory breach of contract by reason of delay and S had not been
entitled to terminate the contract.
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