Compensable and Non-compensable Delays

Posted on April 23, 2010 by

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Larry has hired a local carpenter named Peter to build a barn for his herd of llamas. Although Peter told Larry that he’d have the project completed in three months, when the barn was almost complete a tornado came near and ripped off the roof. Because he has to put on a new roof, Peter will not be able to complete the barn within three months. This is an Excusable Delay since the abnormally severe weather was not Peter’s fault. (See “Excusable and Non-Excusable Delays”) Excusable Delays may be either Compensable or Non-compensable. This refers to whether or not Peter (the contractor) is entitled to compensation for the additional expenses associated with the delay. If the delay is neither Larry nor Peter’s fault, Peter can expect to be allowed more time to finish the job, but no extra compensation. In this case, the tornado was not the fault of either party so it is a Non-compensable Delay. If the delay is Larry’s (the buyer) fault, then it is a Compensable Delay. For example, Larry is inspecting the almost-completed barn and realizes that he should have a cria  pen (baby llama) built in the corner. It is not Peter’s fault that Larry changed his mind about the interior pen, so Peter is entitled to additional compensation and more time to complete the barn project.