THE BOTTOM LINE
- Client delays don’t create a blank check: A client causing project delays doesn’t automatically make them liable for all extra costs if the contractor’s own supply chain issues were the real bottleneck preventing progress.
- Silence can be costly: Contractors who agree to a delayed project start date without formally reserving their right to claim damages may be deemed to have waived that right.
- Substantiate or fail: Claims for additional costs due to inefficiency or price hikes require robust, verifiable proof. Relying on high-level calculations without detailed underlying data will likely lead to the claim being dismissed.
THE DETAILS
A recent ruling from the District Court of Amsterdam offers a stark reminder about risk allocation in complex construction projects. The case involved a contractor, Infra Bouw, who sued the Municipality of Amsterdam for over €450,000 in damages. The contractor claimed that a delayed project award and a phased, late handover of the construction site by the municipality caused the project to overrun by 19 weeks, leading to significant financial losses from inefficiency, extended overheads, and increased material costs.
The court, however, dismissed the contractor’s claims entirely. While it acknowledged that the municipality had indeed made the site available later than originally planned, it accepted the city’s crucial defense: this delay was not the operative cause of the project’s extended timeline. The municipality successfully demonstrated that the true bottleneck was the contractor’s inability to secure the timely delivery of critical natural stone materials. Evidence from construction meeting minutes, the contractor’s own frequently revised schedules, and communication from the supplier all pointed to the stone delivery as the primary source of stagnation, a risk that falls squarely on the contractor.
Furthermore, the court rejected the claim for damages related to the initial late start of the project. It noted that the contractor had agreed to extend the validity of its bid and later accepted the revised start date without protest or reserving its rights to claim associated costs. This lack of a timely objection was interpreted as an acceptance of the new timeline under the original terms. The court also found that the contractor had contributed to this initial delay by being slow to provide a required bank guarantee and by initially presenting an incorrect sample of the required stone. The ruling underscores the critical importance for businesses to formally and immediately document objections and reserve their rights when project parameters shift.
SOURCE
Source: Rechtbank Amsterdam
