Negative Effects caused by COVID-19 on Critical Path of Construction Projects

¹ Faculty of Management of the Comenius University, Odbojárov 10, 820 05 Bratislava 25, Slovakia
² Department of Corporate Finance, Faculty of Business Management, University of Economics in Bratislava, Dolnozemská cesta 1/b, 852 35 Bratislava, Slovakia

^* Corresponding author: haas9@uniba.sk

Abstract

Begun in 2020 COVID-19 disease spread all over the globe and negatively affected all areas of human activities and societies inclusive engineering and construction projects. This paper analyses how COVID-19 implications can be used as a general excuse by a construction company to relief from contractual obligations, e.g., liquidated damages. To answer this question, we compared existing case law, previous court decision and project management literature with potential global and force majeure arguments based on COVID-19 cases. Our results showed that a general “free out of jail” card using COVID-19 argument is not applicable and COVID-19 cannot be seen per se as a force majeure in general and for every situation. However, if the effects from COVID-19 implications are beyond the parties’ control and evidence shows that the contractor is actually disrupted and severely delayed the contractor is entitled for an extension of time or a delayed delivery of his performances. The paper concludes among other details that a COVID-19 argument can only be based on existing contractual provisions, accurate records of the as-built situation, proper notices of all kind of impacts and cause-and-effect considerations. Despite of any warning and if a contractor decides to rely on a global COVID-19 argument only it is a very risky endeavor and may backfire on him later on.