Excusable delays: Overview, definition, and example
What are excusable delays?
Excusable delays are delays in the performance or completion of a task or project that are beyond the control of the party responsible for the work. These delays are typically considered valid under the terms of a contract and do not result in penalties or breaches. Excusable delays are often caused by unforeseen or unavoidable circumstances, such as natural disasters, extreme weather, labor strikes, supply chain disruptions, or regulatory changes. The party experiencing the delay is generally required to notify the other party and may be given additional time to complete the work.
For example, if a construction project is delayed due to a hurricane, the delay may be excused, and the contractor would not be penalized for missing the original deadline.
Why are excusable delays important?
Excusable delays are important because they provide flexibility and protection for businesses when things outside of their control cause delays. They prevent the party responsible for the work from being unfairly penalized for circumstances that could not have been predicted or prevented. By clearly defining excusable delays in contracts, businesses can ensure that both parties understand what situations will lead to extensions or adjustments to deadlines.
For SMBs, having provisions for excusable delays in contracts can help protect the business in case of disruptions and ensure that customers or partners are aware of potential delays without risking a breach of contract.
Understanding excusable delays through an example
Imagine your small business has a contract to deliver 1,000 units of a product to a customer by a specific date. However, a key supplier faces a sudden strike, delaying their ability to ship the required materials. The delay in the supply chain is beyond your control, and because it qualifies as an excusable delay, you may notify your customer about the situation and request an extension to the delivery deadline without facing penalties.
In another example, if your business is involved in a project to build a new office space and a severe storm causes a delay in the construction timeline, the construction company may be granted an excusable delay for the storm’s impact, as long as they provide proper notice and documentation of the situation.
An example of excusable delays in action
Here’s how excusable delays might be referenced in a contract or agreement:
“The contractor shall not be held liable for any delays caused by factors beyond their reasonable control, including but not limited to natural disasters, strikes, or delays in the supply chain. In the event of an excusable delay, the contractor shall notify the client and agree upon an extension to the completion date.”
Conclusion
Excusable delays are delays in work or projects caused by circumstances outside the control of the responsible party, and they are typically acknowledged in contracts to protect both parties. For SMBs, including clauses that define excusable delays in contracts ensures that businesses are not penalized for situations like weather, labor strikes, or supply issues that are beyond their control. This allows for more flexibility in meeting deadlines and prevents unfair penalties for unforeseen events.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.