【Haichuan EPC】It is essential to thoroughly understand the project delay clauses.

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Project delays are likely to occur due to factors such as design changes and force majeure, and the determination of their legality must be based on legal provisions. The Civil Code specifies that delays in the contractor’s work can be compensated for in cases such as the employer’s failure to provide construction conditions in a timely manner or delays in the inspection of concealed works; relevant judicial interpretations issued by the Supreme People’s Court further detail the rules for determining such situations. Analyzing these legal bases is a fundamental prerequisite for clarifying the rights and obligations of the contracting parties and resolving disputes over project timelines. There are legal grounds for project delays, but these grounds usually do not specify exactly how many days the delay is permitted; instead, they outline under what circumstances the contractor’s liability resulting from the delay can be waived or reduced, as well as how disputes arising therefrom should be handled. Core legal basis 1: Force majeure. According to the law, as stipulated in Articles 180 and 590 of the Civil Code, those who are unable to fulfill their civil obligations due to force majeure shall not bear civil liability. Where otherwise provided by law, such provisions shall apply. Force majeure refers to objective circumstances that are unforeseeable, unavoidable, and insurmountable. Application in engineering: This is the most common statutory reason for extension. Typical force majeure events include: natural disasters such as earthquakes, typhoons, floods, and abnormally severe weather conditions. Social disturbances: such as wars, strikes, riots, etc. Government actions: such as taxation, expropriation, and epidemic lockdowns. Legal consequences: If the project timeline is delayed due to force majeure, the contractor is usually exempt from liability and entitled to request an extension of the deadline. It should be noted, however, that the parties to the contract can specify in the contract the exact scope and consequences of force majeure, which may be more detailed than what is stipulated by law. 2. Change of circumstances: According to the law, Article 533 of the Civil Code stipulates that after a contract is established, if there occur significant changes in the basic conditions of the contract that were unforeseeable by the parties at the time of contracting and that do not fall within the scope of commercial risks, and if continuing to perform the contract would be clearly unfair to one of the parties, then the party affected adversely may negotiate with the other party again ； If no agreement can be reached within a reasonable period through negotiation, the parties may request a people’s court or an arbitration institution to modify or terminate the contract. Applications in engineering: This applies to significant changes caused by factors other than force majeure, which go beyond normal business risks. **Sudden policy changes forced the adoption of new, more expensive environmental standards or technical specifications. Legal consequences: The contractor cannot directly claim exemption due to delays; instead, they must first negotiate with the employer to adjust the contract price or deadline. If no agreement can be reached, an application can be made to a court or arbitration institution for a ruling. Compared to force majeure, the applicable conditions for a change in circumstances are stricter, and courts are very cautious when making such determinations. 3. Employer’s breach of contract: According to the law, Article 788 of the Civil Code stipulates that a construction contract is a contract whereby the contractor carries out the construction work, while the employer pays the corresponding fee. If the employer fails to fulfill its contractual obligations, the contractor’s performance may be affected. Applications in engineering: The following actions by the employer are common causes of delays ； The construction conditions were not provided on time, the payment for the work was not made in a timely manner, frequent or significant design changes disrupted the original construction plan, and the subcontractors or material suppliers designated by the employer failed to fulfill their obligations on time. Legal consequences: If the project timeline is delayed due to reasons on the part of the employer, the contractor has the right to request an extension of the deadline, as well as the right to claim compensation for losses and actual expenses incurred as a result of suspension of work, idling of workers, relocation of machinery and equipment, and accumulation of materials and components. Contract Basis 1: Clear circumstances for extension of the construction period. Article 7.5.1 details various situations in which delays in the construction period occur due to reasons on the part of the employer, and the contractor has the right to request an extension of the deadline. Article 17.3, the clause on force majeure, stipulates the rules for extending the project timeline and sharing costs in the event of force majeure. 2. Strict claim procedures: Contracts usually stipulate strict time limits and procedures for filing claims. For example, the contractor shall submit a notice of intention to claim to the supervisor within 28 days after becoming aware or should have become aware of the occurrence of the claim event; otherwise, such claim shall be deemed waived. Failing to apply for an extension of the deadline may also be considered as a refusal to request such an extension. Practical advice: Notifications should be issued promptly; once an event that may cause delays occurs, it is necessary to notify the employer and the supervisor in writing immediately, in accordance with the methods and time limits specified in the contract. Continuous evidence collection: The chain of evidence should be complete and clear, including but not limited to ； Evidence of schedule delays, proof of the causes of the delays, evidence of losses incurred, and processing of schedule extensions. Key advice for the contractor: Before starting work, it is essential to thoroughly understand all the clauses in the contract regarding project duration, delays, and claims. Strictly adhere to the notification and claim procedures stipulated in the contract to avoid losing substantive rights due to procedural deficiencies. From the first day the incident occurred, all relevant evidence was systematically and continuously collected and organized. Actively communicate with the employer and supervisor to strive for a resolution through negotiation regarding the extension of the project timeline.