COVID-19 slump exposes contractor liability
March 24, 2020
Residential and commercial construction will slow in the face of the COVID-19 crisis and the Council of Ontario Construction Association (COCA) warns this could leave builders on the hook.
“We need legislation to protect contractors and subcontractors from liability for project delays to the extent that they are caused directly or indirectly by the pandemic and pandemic response measures,” COCA stated in a March 17 letter to the Ontario government.
COCA noted contractors are typically bound by contract to complete work according to fixed deadlines. Missing a contractual deadline usually results in legal liabilities with financial damages for contractors and subcontractors. Owners can claim compensation for lost rent, the cost of alternative accommodations for tenants, lost profit, increased financing costs, increased insurance and other damages.
“Delay claims against contractors and by contractors against subcontractors usually exceed the price of the contract or subcontract in issue. These losses are typically uninsured,” stated COCA president Ian Cunningham.
